Your start-up’s capitalization table (who owns what amount of different types of stock) is an important reporting tool for company execs, the board and investors. Having a clean, easy-to-maintain cap table makes reporting to all audiences much easier.
This quick post covers start-up cap table creation, maintenance and reporting using a Google Docs spreadsheet and two slides. This is a prelude to the updated, 2012 board meeting example discussion that will hopefully be done in the next few weeks.
If you look at the spreadsheet, there are two sheets / tabs: the cap table summary and the cap table itself. Reading through the summary, it’s clear that this fictional company has raised two rounds of funding (Series A and Series B Preferred) from a total of 3 VC firms and one individual investor. There are two founders and one early employee that had common stock at the point of the preferred investment; this common stock is listed separately from issued options and the available stock option pool.
NOTE: There is only one input cell on the summary sheet: the number of shares in the option pool (C25); every other value is input or derived from the cap table sheet.
The two columns on the summary sheet to the left of the number of shares show different percentages. The number of “outstanding shares” are all the existing common shares PLUS all the preferred shares PLUS the issued options, whether or not the options are exercised. The number of “fully diluted outstanding shares” is the number of outstanding shares PLUS the unissued option pool. The reason to delineate between these two versions of share numbers is because, in certain situations (such as an acquisition of NewCo), the unissued option pool will be canceled and the percentage ownership will be equal to the percentage outstanding. With a large option pool, the difference between the two resulting ownership percentages can be significant.
On the summary sheet:
On the cap table itself:
I believe the rest is pretty self explanatory; if you have questions, please ask.