Cap Table with Derivative Instruments, Investor Returns and Charts
Originally published: 22/03/2021 08:12
Publication number: ELQ-32315-1
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Cap Table with Derivative Instruments, Investor Returns and Charts

Advanced multiple round startup cap table

Most startups are initially financed by their founders. They contribute relatively small amounts of money for the company to make its first steps. If the business idea proves feasible, there will be the first real funding round (“seed” funding) when the company receives financing from external parties (often referred to as “angel investors”).

If, following this round, the company performs well, there can be further drawdowns of external financing to keep the business growing. In most real-life examples there will be up to three rounds (Series A, Series B and Series C), after which the company can go public or be sold to a strategic investor. At each funding round there will be changes in equity shares held by current shareholders based on the amounts contributed by the new investors and the market value of the company.

This template allows to model up to six investment rounds and full exit for up to 12 common-stock investors. It includes key profitability metrics for each investor (IRR, equity multiple and gross return).

The model also includes calculations for a SAFE (simple agreement for future equity), employee stock options and convertible notes.

You can use this cap table to keep track of your investors or to build it into your financial models and analyze financing alternatives.

The table is accompanied by five professionally designed magazine-quality charts showing:

- changes in company valuation resulting from investor contributions and market value uplifts
- composition of final equity value by investor and overall equity value increase
- a snapshot of each investors contributions, distributions and profitability
- holding period for each investor
- equity share by shareholder and by investing round

This Best Practice includes
1 Excel file

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Further information

Calculate every participant's share in a JV startup at every round, analyze potential dilutive effect of derivative instruments, present the results graphically

You have a startup with several investors joining in multiple rounds

If your JV's capital structure is more complex than what this model includes; contact me if you need help creating a cap table for your situation

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