The Fundraising Cap Table
In my previous post, I talked about how you can use modeling courses to prepare yourself for applying for cap table modeling jobs. In this one, I'll talk about one more reason why it's a good idea to use modeling classes and how they can help you land that dream job. Specifically, we'll discuss the cap table interview and how you should prepare before taking your first shot at modeling. By startups done reading this article, you'll know how to get ready for the interview in the best way possible.
If startups are modeling for the first time, it is highly likely that you will be nervous. Even the people who have done this type of thing hundreds of times won't be as nervous as you will be. Fortunately, with this cap table modeling template, you can quickly model out what questions you might be asked during the actual rounds. There's a useful Youtube video linked below, where professional model walk through all of the key aspects of this modeling template. So pay close attention.
One common question that you will be asked during modeling courses is "Who are you?" This is actually quite difficult to answer given that most people do not have a full name. startups of the company will be asked at the same time. To give yourself a helping hand, include their full names, dates of birth, and a simple email address. You can also use their phone numbers if you think they might ask you to call them back later. startups is important because it tells the judges that you were a part of this particular company for twelve consecutive months before the interview.
The next set of questions you will likely be asked are "What type of investor are you? Commercial or private?" Investors in general are going to look for steady investors that have the capital to invest with. For cap table modeling investors will more than likely be looking for steady investors.
Once all of your information has been compiled you will be asked to complete a short term sheet. This sheet will give the judges an idea of your past performance based on the types of investments you have completed. You should highlight any key achievements relative to the investment. You should also provide information on your personal investment strategies as well as the key objectives behind your investments. These should all be clearly outlined on your short term sheet.
When it comes to cap table modeling, you must come up with a unique presentation and marketing strategy for each of your individual investments. For example, if you are investing in small cap stocks, your marketing strategy should include a presentation on the strengths of small cap stocks, your expectations for the future of small cap stocks, and how you will make investments in those stocks. If startups are an aggressive investor you should outline how you intend to capitalize on a particular company's growth. Each of these presentations should be well thought out and should be supported by your personal investments.
As an alternative to cap tables, many companies offer convertible debt or promissory notes as a means of obtaining financing from their existing investors. Convertible debt is offered to investors at a discount as a means of obtaining additional capital for the company. The discount can be as much as 20% of the face value of the note.
Many investors make the mistake of going with only one investment. This can lead to the situation where one or more slices of the pie get left unappreciated. In this case, the investor ends up making little or no profit because he did not allocate enough funds to the other slices. The cap table allows you to allocate funds based on your investment goals and helps in ensuring that all investors are profiting from their investments.