Hi there and welcome to the first edition of our newsletter that will give you your regular dose of legal know-how to make your life as a startupist easier. Today, we’ll start with the very first step in any investment process - the cap table.
What's a cap table?
A cap table is a table that summarizes company ownership (who owns how much at what valuation). It also keeps track of the company's valuation.
Here is an example of how a cap table can look like:
Why does this matter?
Having a cap table is crucial for both investors and founders. It helps them in making informed decisions about the company's future. As an ancient proverb says, anything in business can be fixed, except for the cap table.
Dos and don'ts
Here are the top tips and mistakes to avoid we learned from years of experience.
Up-to-date cap table
Single cap table version
Enough equity for founders
Similar rights for small investors
Out-of-date cap table
Multiple cap table versions
Equity in hands of inactive shareholders
Different rights for small investor
That's all for today! If you need help with managing your cap table, don't hesitate to reach out to us. Follow us on LinkedIn to stay tuned for our next newsletter!
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