Multiple funding rounds
Key features of the cap table model
Model key features
An insightful and useful model needs to work for you, not against you.
My models do require thought on inputs, but I walk you step by step with everything you need to do to support you to derive all the outputs that you need without any coding.
Summary of the key features
An introduction to the functionality of the pro cap table model.
- Every sheet, from common to preference series and warrants and options have their own sheet
- You can do as many convertible notes as you want. Once you start doing priced rounds you can track more rounds that wound be needed. There are unique sheets from series
- A to Series I, to illustrate granular insights and total visibility.
- All the ledgers present in the capitalization table sheet have a consistent format. You only need to pick their name from a drop-down list to add new staff/investors.
- There are capitalization tables for common (the starting sheet) up to series-I. I made sure that you will be able to cover as many rounds as possible!
- If you do a series-aa, no worries, it’s just another class of share. The model allows you to have 9 series of preference share, on top of common types. That’s a lot!
Manage all your shareholders from one sheet
- Input each and every investor in one sheet. Keep track of all key details regarding their investment and terms. This will serve to drive the entire model to ensure that the sheets serve as an index to have total consistency across the model
- You can use this sheet to track emails, addresses, and make notes on the investor terms so you can keep on top of who has what without then digging into sheets
Manage convertible notes
- Have multiple convertibles for each class of underlying note
- Set issue and maturity dates. Cancel notes. Set the principal and interest rate, as well as discount and cap.
- See effective discount rates, conversion price, underlying principal shares and interest shares. Comment as you need to track any changes as they happen.
Enable investors to do their pro-rata with a drop down
- A cool thing I built in the model is the ability to press a button and automatically pro-rata investors. This is really handy if you want to run some scenarios about what might be left in a competitive round. Normally, that would involve a load of manual inputs, which would take time to do. In this model it’s as easy as clicking yes or no in a dropdown
- This will automatically feed into each of the cap sheets where calculations are done for you
- Two columns across cap sheets highlight if investors do pro-rata and follow-on investment
- For the next round you can insert whether an investor has ‘majority investor rights‘ and if they ‘participate‘ for their pro-rata.
Deal with your ESOP
- Track each staff member in your ESOP with name, grant date (and add board approval date!), number of options, type of option, exercise price and vesting start date
- Model accounts for three types of ESOP: RS, ISO, and NSO
- Set 3 of the most common vesting schedule with drop-down (4y monthly, 4y, quarterly, and 4y no cliff)
- Set whether options have accelerated vesting at the exit with dropdown
- Track exercise and keep on top of cancellations, repurchases, and expiration
- See the status of outstanding options, current vesting, vested at the acquisition date, and the acceleration calculation (as applicable)
Accommodate different vesting schedules and even accelerated vesting
- The model has built-in three vesting schedules to pick from (you can build your own if you do something weird). I’ve built the three most common options down (4y monthly, 4y, quarterly, and 4y no cliff)
- Acceleration of options can be an important consideration to your staff. The model allows you to control what happens in a change of control. The returns waterfall lets you override the model assumptions with full and no acceleration… just in case an acquirer wants to screw your terms (which happens)
Deal with warrants
- Track each issue number and date as well as expiration date. Know which warrant is linked to each underlying class of stock.
- Set exercise price, shares issues, date of exercise, what is exercised, whether you cancel (and how much) and comment on each transaction.
Detailed to level of warnings for fractional shares
- The math is impeccable to the level of tracking as to whether on a price per share level shares will be purchased on a fractional level (and you can track this is a dashboard)
- Adjust to ensure that the full investment is made in return for equity transference
Designed to be simple to use
- It’s a huge cap table, but I invested a lot of time figuring out how to make it as simple to use as possible and remove any potential for duplicate fields
- Effective use of drop-down menus with a centralised shareholder sheet so you can intuitively use and populate the model and ensure consistency
- Structured so you logically use Excel to copy/paste and make things happen
Individual return analysis
- Select anyone on the cap table in a dropdown and instantly see their exact return profile
- See returns with each class of stock they participated in across a range of values you can define to see all the possible outcome scenarios at exit
- Zoom into the $ returns, the holding for each class of stock, and the total returns to all shareholders
Returns waterfall analysis
- 546 rows of granular waterfall analysis
- Follow the conversion math for each and every round from series-I (as applicable) all the way down to convertible notes and common
- Visualise when liquidation preferences are overcome so common gets paid!
- Define an exit value range with a central value and increments to see 53 potential outcomes scenarios and how they will affect the return profile of each round (with charts)
- Decide whether to vest all unissued options and whether options will accelerate at acquisition with a 2 drop downs
- Set an exit date to see the effect of an outcome on currently vested options and convertible notes
Detailed tracking of dilution over time
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- The calculations continue, giving you a round by round overview or who owns what by class of share on a fully diluted basis. Everything will add up to 100%
- Outputs provided in a table and in charts
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