Mastering Cap Table Management: A Startup's Guide To Success

Cap Table News

Mastering Cap Table Management: A Startup's Guide To Success
Venture CapitalFoundersStartups
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Dasha Shunina is the Founder of Women Tech Meetup, a regular monthly event held in San Francisco, Miami, and NYC, bringing together female professionals in the spheres of technology entrepreneurship, innovation, and venture capital.

Maintaining a clean cap table is crucial for startups seeking investment. It provides investors with a clear understanding of the ownership structure, builds trust, and facilitates informed decision-making. Many investors review the cap table and data room during due diligence, assessing not only ownership details but also the founders' ability to manage this information effectively.

“Having a clean cap table helps to instill confidence that the founding team knows what they are doing and is capable of running a tight ship.” “The number of shares allocated to any such employee or advisor should directly correlate to the anticipated value such contributor will provide to the company.”

Kristen recommends startups use Fidelity Private Shares when it comes to raising money, preparing for due diligence, and running a tight ship. “Convertible notes and SAFEs can lead to significant changes in the cap table upon conversion, often diluting existing shareholders. Founders should carefully consider the terms, such as valuation caps and discount rates, and plan for their eventual impact on the equity structure.”

When negotiating cap table terms or investment valuations with investors, it is essential to align mutual interests. Alicia suggests highlighting your startup's strengths and unique track record to demonstrate its potential for success. Investors should recognize that demotivating founders is counterproductive, so don't hesitate to negotiate.

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Venture Capital Founders Startups Fidelity Private Shares Investment Dilution

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