Series B investors will put in $5M on a $20M post-money valuation.
Existing founders & management have 15M shares; Series A Investors have 10M shares.
What will the full cap table look like after the investment?
Process Steps | |
1 | Set up table, including all players. |
2 | Enter known information. |
3a | Calculate ownership percentage for new investors. |
3b | Allocate pre-money value. |
4 | Calculate price per share. |
5 | Calculate number of shares for new investors. |
6 | Add up the total number of shares. |
7 | Calculate ownership percentages. |
Use a consistent layout for all cap tables. We recommend the following:
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | ||||
Series A Investors | ||||
Series B Investors | ||||
Series C Investors | ||||
Total |
From the question prompt, fill out the following data points:
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | ||||
Series A Investors | ||||
Series B Investors | ||||
Series C Investors | ||||
Total |
From the question prompt, fill out the following data points:
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
|||
Series A Investors | 10,000,000 |
|||
Series B Investors | $5,000,000 |
|||
Series C Investors | ||||
Total | 100.0% |
$20,000,000 |
At this point, you can fill in two different sections of the table:
a) Use investment divided by post-money valuation to solve for percentage of ownership for new investors.
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
|||
Series A Investors | 10,000,000 |
|||
Series B Investors | $5,000,000 |
|||
Series C Investors | ||||
Total | 100.0% |
$20,000,000 |
At this point, you can fill in two different sections of the table:
a) Use investment divided by post-money valuation to solve for percentage of ownership for new investors.
Investing $5M at a $20M post-money valuation would give new investors 25% of the company ($5M/$20M)
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
|||
Series A Investors | 10,000,000 |
|||
Series B Investors | 25.0% |
$5,000,000 |
||
Series C Investors | ||||
Total | 100.0% |
$20,000,000 |
At this point, you can fill in two different sections of the table:
a) Use investment divided by post-money valuation to solve for percentage of ownership for new investors.
Investing $5M at a $20M post-money valuation would give new investors 25% of the company ($5M/$20M).
b) Use the original share counts (Founders & Mgmt and Series A) to allocate pre-money valuation.
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
|||
Series A Investors | 10,000,000 |
|||
Series B Investors | 25.0% |
$5,000,000 |
||
Series C Investors | ||||
Total | 100.0% |
$20,000,000 |
At this point, you can fill in two different sections of the table:
a) Use investment divided by post-money valuation to solve for percentage of ownership for new investors.
Investing $5M at a $20M post-money valuation would give new investors 25% of the company ($5M/$20M).
b) Use the original share counts (Founders & Mgmt and Series A) to allocate pre-money valuation.
The pre-money value is $15M ($20M post-money less the $5M invested in this round).
That amount is split between Founders & Mgmt and Series A according to their share count.
Thus, Founders & Mgmt own $9M ([15M out of 25M pre-money shares] * [$15M pre-money value]) and Series A
investors own $6M ([10M out of 25M pre-money shares] * [$15M pre-money value]).
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
$9,000,000 |
||
Series A Investors | 10,000,000 |
$6,000,000 |
||
Series B Investors | 25.0% |
$5,000,000 |
||
Series C Investors | ||||
Total | 100.0% |
$20,000,000 |
Now that we know both the share count and share value for Founders & Mgmt and Series A investors, we can calculate the price per share.
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
$9,000,000 |
||
Series A Investors | 10,000,000 |
$6,000,000 |
||
Series B Investors | 25.0% |
$5,000,000 |
||
Series C Investors | ||||
Total | 100.0% |
$20,000,000 |
Now that we know both the share count and share value for Founders & Mgmt and Series A investors, we can calculate the price per share.
Founders & Mgmt hold $9M of value in 15M shares, implying a $0.60 price per share.
Series A investors hold $6M of value in 10M shares, implying a $0.60 price per share.
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
$0.60 |
$9,000,000 |
|
Series A Investors | 10,000,000 |
$0.60 |
$6,000,000 |
|
Series B Investors | 25.0% |
$5,000,000 |
||
Series C Investors | ||||
Total | 100.0% |
$20,000,000 |
Now that we know both the share count and share value for Founders & Mgmt and Series A investors, we can calculate the price per share.
Founders & Mgmt hold $9M of value in 15M shares, implying a $0.60 price per share.
Series A investors hold $6M of value in 10M shares, implying a $0.60 price per share.
NOTE: If these values are not equivalent, then something is wrong!
The price per share must be the same for all shareholders.
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
$0.60 |
$9,000,000 |
|
Series A Investors | 10,000,000 |
$0.60 |
$6,000,000 |
|
Series B Investors | 25.0% |
$0.60 |
$5,000,000 |
|
Series C Investors | ||||
Total | 100.0% |
$0.60 |
$20,000,000 |
From the $ value of the investment and the price per share, we can calculate how many shares new investors would purchase.
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
$0.60 |
$9,000,000 |
|
Series A Investors | 10,000,000 |
$0.60 |
$6,000,000 |
|
Series B Investors | 25.0% |
$0.60 |
$5,000,000 |
|
Series C Investors | ||||
Total | 100.0% |
$0.60 |
$20,000,000 |
From the $ value of the investment and the price per share, we can calculate how many shares new investors would purchase.
At $0.60 per share, a $5M investment would purchase 8,333,333 shares ($5M / $0.60).
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
$0.60 |
$9,000,000 |
|
Series A Investors | 10,000,000 |
$0.60 |
$6,000,000 |
|
Series B Investors | 8,333,333 |
25.0% |
$0.60 |
$5,000,000 |
Series C Investors | ||||
Total | 100.0% |
$0.60 |
$20,000,000 |
Add all shares to get the total share count.
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
$0.60 |
$9,000,000 |
|
Series A Investors | 10,000,000 |
$0.60 |
$6,000,000 |
|
Series B Investors | 8,333,333 |
25.0% |
$0.60 |
$5,000,000 |
Series C Investors | ||||
Total | 33,333,333 |
100.0% |
$0.60 |
$20,000,000 |
Finally, divide share counts by the total number of shares to get the percentage of ownership for each shareholder group.
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
45.0% |
$0.60 |
$9,000,000 |
Series A Investors | 10,000,000 |
30.0% |
$0.60 |
$6,000,000 |
Series B Investors | 8,333,333 |
25.0% |
$0.60 |
$5,000,000 |
Series C Investors | ||||
Total | 33,333,333 |
100.0% |
$0.60 |
$20,000,000 |
Congratulations! Look back at step 2b and see how far you've come.
With nothing more than simple arithmetic, you have completed the entire cap table.
Like solving Su Doku puzzles, there is no complex math to be done.
The trick is stepping through the puzzle in a logical sequence, filling in one box at a time.
# of Shares | % Ownership | Price per Share | $ Value | |
Founders & Mgmt | 15,000,000 |
45.0% |
$0.60 |
$9,000,000 |
Series A Investors | 10,000,000 |
30.0% |
$0.60 |
$6,000,000 |
Series B Investors | 8,333,333 |
25.0% |
$0.60 |
$5,000,000 |
Series C Investors | ||||
Total | 33,333,333 |
100.0% |
$0.60 |
$20,000,000 |
Building a full cap table from a limited amount of information can seem daunting.
But the process of building a cap table is very similar to solving a Su Doku puzzle.
You have a grid of data points (numbers) to fill in, and you are given a few numbers to start with.
From the information you have, think about what data point(s) you can fill in next.
Continue, filling in one box at a time until all boxes are full.