The cap table sheet

This is the 7th part of the Pro Cap Table training course on the cap table sheet. In this series, we cover essential basics and then delve into each worksheet, guiding you to craft an outstanding cap table.

Overview

The “Cap Table” sheet consolidates all your cap tables into a single view.

Why do I say cap tables? Surely you only have one cap table?

Very observant of you. I have 10 cap tables in one sheet, but why? There are a few reasons:

1. Overview: You can see everything in one place
2. Progression over time: Observe the cap table’s evolution at each funding round. If an investor wants to clearly see what happened at every round, they can very easily see so which is pretty nifty
3. You can run scenarios quickly: This model was not designed to be a scenario planning tool (I could make one a lot faster and simply!) but I considered how to allow you to do so. So you can relatively simply test to see the effect of raising different rounds of capital in future and how it will impact you which isn’t a feature any other model offers
4. Error checking: Because each sheet is set out, you can quickly scan and see if “anything looks weird?”

 

The super thing about this sheet is that it is automated to the max possible! I spent considerable time to ensure it is user-friendly and will help you to avoid making issues.

There are very few inputs you have to make in this sheet. There are a maximum of three, and only one is mandatory!

The Pro Cap Table is a fully integrated system, ensuring seamless connectivity. Accurate inputs lead to amazing results.

How to use the cap table sheet

Let’s dive into how to effectively use the cap table sheet.

Sheet setup

The first thing to do is just to look at the sheet. You can see that there are ten sections.

Every section is almost identical other than the Common sheet which is missing a few columns (since the extra columns are for investors). The other difference you will see is for each round there is one additional column to add for the new rounds. So the Series-I sheet is the widest.

Consistent row design allows for easy addition of numerous shareholders by simply inserting more rows.

Once you understand how one cap table works, you’ll know how the other ones work.

Adding shareholders

Since cap tables revolve around shareholders, our first step is adding them.

Can you see the orange boxes in the below image of the Common Sheet? I have consistent formatting in my models and orange signifies it is a drop-down. The drop-down is linked to the Shareholders sheet.

Assuming you input the names of your shareholders, you don’t have to type! Click and you will see the name of each shareholder and you select them from the list.

You can see that 8 are added here. You can also see what class of stock each investor owns, as well as the totals.

Add shareholder names as required at each round. If you encounter an error or can’t find a shareholder, verify their presence in the Shareholder sheet.

Adding shareholders at Series A

Let’s go back to the future. You do a fundraise for your series-a class of stock and now you want to add new investors.

The first thing to do is to copy and paste the shareholders from the Common cap table to the Series-A cap table (you can repeat this for future rounds now too if you like).

Now we add the S-A shareholders. These are your 2 convertible holders, your warrant holder, and your S-A investor. Add the three new names using the drop-down (Remember to add their names to the Shareholder sheet first!).

You’re now done for this round! Sort of.

Do your investors possess major investor rights? If yes, simply select ‘Yes’ in the drop-down menu.

Imagine we’re at Series B. Here, you’ll determine if investors will exercise their major rights to ‘Participate,’ indicating their desire to maintain their pro rata share.

Click Yes on the fellas and you are done.

Cap tables for Series B-I

What about S-B, C, D… I?

Same thing. That’s all you need to do. I spent a lot of time to make this simple for you.

But let’s have a look at your S-I. There are more shareholders and more rows and columns… but still one set of inputs. A whole lot of outputs with little inputs.

Each column shows the shares held per class of stock. These all add up to the total.

You need to know the ownership by class of stock where there are voting decisions, but ultimately the relative ownership position is what matters. This shows this.

Details of the Cap Table sheet

I’m going to explain some extra details if you are still with me!

Each cap table includes checks at the bottom. An ‘OK’ across-the-board signals everything is in order!

Now to look at more of the details:

• At the top of each sheet is the date of the transaction closing
• Under the orange boxes are ‘plugs.’ These illustrate if there are any errors or rounding errors. They are also used when you want to forecast a scenario. You can see the rounds G, H and I have shares in the plugs. If you want to get rid of those rounds, all you need to do is remove them from the assumptions page
• After the Series-I are options and warrants. Though not yet shares, they’re important for calculations. Total outstanding shares include both common and preferred shares, while fully diluted shares also encompass options and warrants, assuming an ‘as converted’ basis.
• After the plugs you have a subtotal. This adds up each column
• You then have reserved options. The number displayed represents the total issued options minus the total number of options, adjusted for exercise, cancellation, and expiration as of the day before the transaction date.

Note the model’s time dependency: each change is dated and accounted for. Changes are represented up to the day before a transaction. For instance, if a shareholder’s status changes (like being fired and their shares clawed back) the day before a transaction, this is reflected in the ESOP pool.

If you don’t have the model yet, get it here.

There we go. Let’s get moving to the next episode.

Read next step

14 parts in this guide

You can jump to a section if you prefer:

1. What is a cap table and other important questions
2. Cap table dilution step-by-step example
3. Cap table dilution math
4. Starting the cap table (The drop-down menus we need)
5. Shareholders sheet
6. Deal calculations
7. The cap table sheet
8. The assumptions sheet
9. Individual shareholder returns sheet
10. Returns waterfall calculation
11. The ESOP sheet
12. The Common sheet
13. The convertible notes and warrants sheet
14. The preference shares sheets (From Series A to I)