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by roel_v
5780 days ago
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I'm seriously wondering what is up with the voting the last couple of weeks. This is a genuine question, asking for an explanation of a term that I don't know. Why would anyone vote this down? Is there a 'basic knowledge' rule I violated here? (sorry about asking about downvotes for the second time in two days - I'm just wondering what changes I need to make to my posting to not annoy people so that they don't have to vote me down). |
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So basically the cap table is a spreadsheet of who has what percentages of equity (and numbers of shares) in the company and then for any given dilution event (typically investment) shows how your percentages will change - and being a spreadsheet obviously you can play with the values to understand how things change.
So it lets you model how investment alters your share holding. It lets incoming investors understand the share structure of the company (and who holds power etc) and ours has a couple of columns of what we might earn at given exit values - this is kind of incentivising but its also useful once you start talking about preference shares and multipliers. It is also a useful tool when negotiating on an investment because you can see what the implications are - for example say an investor was asking for 2% more - you might be able to see that it hardly makes any difference and isn't worth arguing about - or it might be absolutely critical.
Investors seem to want to see this as well.