OpenUp: Interplay Between Cap Table, Valuation, and Financial Planning
Cap table tracks equity distribution across shareholders. However, startups raise on SAFEs, NOTEs, and potentially have warrants sitting on the sideline pending conversion. These instruments can have liquidation preferences, pro-rata, and anti-dilution clauses. Additionally, a priced round will likely require a pre-money option pool with complex terms around them.
Valuation determines the value of shareholder equity, be it preferred, warrant, common, or option holders. Depending on the stage and industry, there are numerous ways to arrive at a company valuation. A startup can punt a priced round with a convertible instrument that uses a valuation cap, discount, and interest. The terms in these instruments can further impact the true valuation of the startup.
Financial planning is simply a projection for how the startup’s P&L, Cash Flow, and Balance Sheet will look over the next several years. These projections give a lot of clarity regarding revenue profile, top-middle-bottom funnel, growth planning, the free cash flow, when the company needs to raise next, and what the valuation might be at the time of future raising.
WHAT TO EXPECT:
Rajesh Gopi will examine the interplay between cap table, valuation, and financial planning. A founder’s mastery of these concepts for their startup will best position them for optimum success for all their shareholders.
This is a presentation with questions answered by Rajesh throughout.
DATE / TIME:
March 15, 2022 from 9am – 10am MST
Hosted virtually through Zoom
Meet The Experts:
Rajesh is passionate about building tech to solve founder challenges around managing, modeling, and preserving equity. Despite previous startup exits, understanding the nuances of impact to equity from investment terms was always a challenge for Rajesh. He started TWO12 to solve this problem for founders with a suite of related equity management applications, including cap table, fundraise valuation, and financial modeling. In addition, he mentors founders at multiple accelerators and runs a pre-accelerator program. Rajesh holds an MBA from UT Austin.
Tara Spalding, MD of BoomStartup
will be moderating the webinar and encouraging participants to ask questions to Rajesh.