About These Models
These Cap Tables enable you to model multiple financing rounds for multiple investors or investor groups. Read these short descriptions of the features of each Cap Table and then open the one that best suits your needs.
Standard Cap Table
This is the original Startup Cap Table …
Big Cap Table
Allows up to 5 financing rounds for multiple investors …
Cap Table With Options
Cap table with options for employees or investors …
For each investor you can decide which rounds they participate in and their capital contribution in each round. For each round you also need to specify the pre money valuation that the round is based on. The model then calculates the number of shares issued to each investor for each round, the post money valuation, share ownership, valuation gain over the prior round, and the shareholding percentage.
Finally, the model presents a summary for each investor showing the total amount of capital they have contributed (or will contribute), their ending valuation and shareholding percentage, and their total valuation gain across all rounds.
Here are some simple tips to help you use this model:
- Enter the required inputs into the yellow shaded cells.
- Collapse and expand parts of the model to show only what you are interested in.
- Make changes to the investor types and investor names by overwriting the default descriptions.
- Add additional rows to the investor list by clicking on any row and hitting the Insert key or by clicking on the insert icon.
To save your changes, simply click the SAVE button at the top right of the model. You will then be able to access a full screen version of your model. You’ll need to have a Sumwise account to access this model though. If you don’t already have one, signing up and logging in to Sumwise for the first time only takes a minute! You can login with your usual Google account.
What is a Cap Table?
Capitalization Tables are used to record, track and model ownership of a company. If you have shareholders or plan to raise money in the future, then having a cap table and understanding how it works, is really important.
Although the math behind a cap table is fairly simple, laying one out in a spreadsheet can be quite tricky. Each round of financing dilutes the percentage of the company owned by the existing or incumbent investors.
It is common for startups to raise finance in multiple rounds over multiple years. Each round has its own terms and pricing, and typically introduces new investors to the venture, but it common for existing investors to have the right to invest alongside the new capital.
Capitalization Tables show you who owns what of a company following each financing round. Although the Cap Table shown here is fairly simplistic, Cap Tables can get very complicated with different types of debt, convertible notes, preference shares, and the like.
Capitalization Tables show the stock dilution effect on existing investors following each subsequent round of funding. Cap Tables also show you the increase in value of the shares you own if future funding rounds are at a higher value than the post valuations of prior rounds. Cap Tables built with spreadsheets like Sumwise help you to quickly analyze various alternative scenarios and assist in finding the best time to raise extra finance, or go for an exit.
The post-money valuation (the “Value” columns in the above Sumwise model) is calculated as the pre-money valuation plus the total amount of new investment for the round. For example, if the pre-money valuation is set at $500,000 and $200,000 is being raised in the round, then the post-money valuation is $700,000.
More About Rounds of Financing
Startups often raise their finance in multiple rounds of financing. This allows them to take advantage of increasing pre-money valuations and also to introduce new investors to their business who may have some strategic input at various stages of the startups development. Where later rounds are priced at a lower pre-money valuation than the post-money valuation of earlier rounds, this is known as a “down round” — in that the value of the venture has decreased since the last capital raising. Some investors seek to protect themselves against this loss of value by ratcheting up additional shares.
Rounds of financing often include terminology like “Seed Round”, “Series A”, “Series B”, etc. These are explained briefly below:
Seed Round: this is generally the first capital raising for the venture and provides a small amount of capital to support the initial concept development, building of prototypes, initial market research, and the like. It is also colloquially called the FFF Round – which stands for “Friends, Family, and Fools”. The risk of the venture failing is highest at this point, but the rewards of success are generally greatest for investors at this early stage.
Series A: this is the first institutional round and may include venture capitalists and/or angel investors. Investment in this round is achieved off the back of a successful proof of concept or prototype and some (limited) traction with end users. The quality of the management team is also considered important at this stage, however, there is, as yet, no scientific of quantitative way to assess the value of the venture.
Series B, C, etc: each subsequent round is generally larger, and at a higher value than the preceding round.
This Cap Table is provided as is without any warranties as to its accuracy or completeness. It is designed to help you learn and understand the effects of financing rounds on existing investors, dilution, and paper gains. For real world usage, we strongly suggest you hire a lawyer to help you.
Sumwise is a new type of online spreadsheet designed specifically for financial modeling. Current spreadsheet technologies (like Excel and Google Docs) are powerful and flexible, but they are also unstructured and error prone. And spreadsheets, once built, are not easy to modify or extend.
Sumwise addresses all of these problems with clever features like: user defined row and column names; rows and columns that can be tagged with meaningful keywords; and cell groups that share a common formula and formatting across a range a related cells.
Sumwise was invented and developed by a small dedicated team of software developers and spreadsheet experts in Sydney, Australia. If you’re interested in learning more please visit our website or send us an email.