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Finance of Startups for Dummies: Cap Table

The capitalization table (cap table) is referred to the agreement of shares and ownership of a company. It sits at the intersection of shareholder, number of shares, and company valuation. I realized that I’ve never touched on this in previous Finance of Startups posts, so I’ll cover that ground here.
A few examples of cap tables…
Lois and Clark want to cofound a venture to provide virtual tours into the unknown – called The Great Digital Explore. Lois will be the CEO while Clark will be the CTO. Given their differing skill sets and being friends, they’ve decided to split ownership in half – 50-50. They’ve also decided to set aside 20% of the company for future employees. They value the company initially at $20,000. Par value is $0.002 as they “create” an initial pool of 10,00,000 shares (pretty standard).
The cap table for The Great Digital Explore would look like this:
Shareholder Equity Position Number of Shares Price per Share Value Lois 40% 4,000,000 $0.002 $8,000 Clark 40% 4,000,00…
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