Cap Table
Cap table writing: option pools, dilution, SAFEs vs priced, and keeping founders on the right side of the waterfall.
26 articles
What is a Cap Table? Complete Guide for Startup Founders
A capitalization table tracks ownership, dilution, and shareholder rights in your startup. Every founder, investor, and advisor needs a clear cap table before raising capital. It…
Should I Take On Investors? A Decision Framework for Profitable Small Businesses
Most fundraising advice assumes you should raise. Seven questions to determine whether equity funding is right for your profitable business. Covers what you give up, alternatives…
Down Rounds, Washout Rounds, and Navigating Startup Financial Distress
Model distress scenarios before they happen. Options include down rounds, washout rounds, debt restructuring, and acquihires. Cap table implications matter more than valuation…
Alternative Financing: Revenue-Based Financing, Grants, and When Not to Raise Venture Capital
Revenue-based financing means no dilution, no board seats, no covenants. Payments flex with revenue. VC is one option on a financing menu, not the default. When alternatives make…
The PE Rollover: How the Second Bite Can Double Your Exit Returns
PE acquisitions involve retaining 20-40% equity for the second exit. Lower cash at close but potentially higher total returns over 3-5 years.
Strategic vs Financial Buyers: How to Choose and What Each One Means for Your Exit
Strategic acquirers offer 90-100% cash at close. PE firms offer 60-80% with rollover equity. The second bite can double total returns.
Multi-Round Dilution Tracker: How Founder Ownership Erodes from Seed to Series B
Cumulative dilution across Seed, Series A, and Series B with real numbers. Option pool refreshes, anti-dilution, and what founders actually own at exit.
Founder Dilution: How Much Equity You Lose Each Funding Round
Dilution math per round (15-25% at seed), option pool mechanics, founder ownership trajectory from 100% to 35%, and how to negotiate better terms.
Post-Acquisition Finance: What Happens to Your Cap Table, Escrowed Funds, and Earnouts
Most acquisitions include escrow and earnouts. These create cash flow timing issues and tax complexity for shareholders.
Equity Packages That Actually Work: 409A Valuations, Strike Prices, and Vesting
409A valuations determine tax treatment. Strike price is the option exercise price. Vesting is typically 4 years with 1-year cliff.
The Option Pool Game: How to Plan for Dilution Before It Is Too Late
An option pool is shares reserved for employees. Typically 10-15 percent depending on hiring plans.
Pro Rata Rights, Board Seats, and Anti-Dilution: What You Are Actually Negotiating
Pro rata rights let investors maintain ownership. Board seats give voting power. Anti-dilution protects investors in down rounds.
Multiple SAFE Tranches: Building Your Seed Round Incrementally
Master the strategy of raising SAFEs in tranches: timing, caps, investor cohesion, and cap table impact. Learn how to scale from $100K to $1M+ without losing founder control.
SAFE Conversion: How It Triggers and What Happens Next
SAFE conversion is triggered by equity financing, acquisition, or other events. We explain conversion mechanics, edge cases, and how to navigate conversion successfully.
Multiple Convertible Notes: Managing Complexity with Serial Raises
Most startups raise multiple convertible notes from different investors before Series A. We explain cap table complexity, dilution stacking, and how to manage organizational…
Interest Rate on Convertible Notes: Impact on Eventual Equity
Convertible note interest rates typically range from 0-8% and accrue until conversion. We explain how interest impacts the total amount converted, its actual dilution effect, and…
Convertible Note Conversion Mechanics: When Does It Become Stock
Convertible notes convert into stock when specific triggers fire. Understanding when and how conversion happens is critical to managing your cap table. Conversion can be…
What Is a Convertible Note and Why It Is Not Really Debt
Founders often treat convertible notes as debt: money that needs to be repaid with interest. This is a mistake. Convertible notes are equity instruments that typically convert…
Convertible Note Impact on Cap Table: Conversion Mechanics Decoded
Convertible notes convert to equity at Series A using a discount and cap. Discount (20-30%) and cap ($2-10M for seed) determine conversion price. Fully diluted cap table must…
Seed Round Cap Table: Modeling Founder Dilution Step by Step
Seed rounds typically dilute founders 15-25%, reducing ownership from 100% to 75-85% post-money. Understanding dilution mechanicsoption pool creation, investor share issuance,…
The Cap Table: What Every Founder Must Understand Before Taking a Single Dollar
The cap table is the ledger of who owns what percentage of your company. Every round you raise changes it. Most founders do not understand how dilution works until they have…
Reading Your Own Cap Table: Equity Options and Liquidation Preferences
Understanding equity options, vesting mechanics, and liquidation preferences transforms cap table from confusing document to strategic tool. These structures directly affect your…
What Is a Capitalization Table and Why It Matters for Founders
A capitalization table documents all equity ownership in your company, including founder shares, employee options, and investor holdings. Understanding your cap table is…
Pre-Seed Fundraising: How Much to Raise and From Whom
Master pre-seed fundraising: raise $300K-$1M from angel investors, corporate venture, and founder friends-and-family. Pre-seed strategy determines Series A positioning, cap table…
Dilution Explained: How Funding Rounds Affect Founder Equity
Dilution occurs when new investors receive equity, reducing your ownership percentage. Each funding roundseed, Series A, Series Bdilutes founder equity, but growing company…
Venture Debt: The Startup Financing Tool Nobody Explains Properly
Venture debt is a loan product designed for venture-backed startups. It is not equity and does not dilute founders, but it comes with covenants, warrants, and a maturity date…