Start Here

Founders - The Impact of a Disorganized Cap Table 🚩

Jun 06, 2024

Founders - The Impact of a Disorganized Cap Table 🚩

Managing your cap table is a crucial but often overlooked aspect of being a founder. Proper bookkeeping here is essential. Common issues with poorly managed cap tables include:

🚫 𝗗𝗲𝗮𝗱 𝗘𝗾𝘂𝗶𝘁𝘆: Previous founders who have left but still retain equity, despite no longer contributing to the company.

🚫 𝗡𝗼𝗻-𝗣𝗲𝗿𝗳𝗼𝗿𝗺𝗶𝗻𝗴 𝗦𝘁𝗮𝗸𝗲𝗵𝗼𝗹𝗱𝗲𝗿𝘀: Organizations, advisors, or 'non-capital participating' angels granted significant equity without vesting schedules or performance requirements. Often, these arrangements are based on verbal agreements.

🚫 𝗘𝘅𝗰𝗲𝘀𝘀𝗶𝘃𝗲 𝗙𝗼𝘂𝗻𝗱𝗲𝗿 𝗗𝗶𝗹𝘂𝘁𝗶𝗼𝗻: Founders diluted by a prior 'lead' investor, typically an angel, who set the round's valuation without adequate market references and cannot provide follow-on capital.

Venture Capital is a game where details matter. A clean, well-structured cap table builds investor confidence. 

For cap table management, consider using software like Carta.

Need help? Reach out.  

- Gerald 


PS ... Join our weekly virtual gathering on zoom, every Thursday at 10a MST. We call it Church for Entrepreneurs, go to our website for an invite.

Get Our Daily Newsletter

For Faith Driven Founders & Investors

Unsubscribe at any time.