Using Startup Cap Table Templates to Estimate Stake Size
A Startup Cap Table template is a simple spreadsheet, usually utilized by early stage venture or start-ups, which clearly identifies the ownership structure of the business. This is used to calculate the value of shares that the investors have in the business. The startup cap table normally depicts who owns what, the number of shares owned by each person and what their value is. It also shows what the investors are entitled to as compensation and what their responsibilities are as well.
The Startup Cap Table template calculates the total number of shares available to each founder before any investment is made. A " valued share " means a fraction (how much is deducted) of an actual share. For instance, a founders equity can be calculated as x% of a total number of shares. In this case, it would be necessary for the founders to sign an agreement stating that they will not sell all of their valued shares.
Another thing that the startup cap table template is used for is calculating the amount of money required to run the business. The calculation is done by dividing the current value of all shares by the total number of shares owned. This will give a rough idea as to how much money is needed to run the business.
The Startup Cap Table template can be used for calculating the amount of startup fees required as well as the amount of money needed for each year during which the business will be operated. These details are needed so that investors can determine if the business is worth investing in. The Excel sheet also has a worksheet that allows the founders to add up all the individual values of their shares. When they have all their figures, they simply copy the data to their personal Excel file so that they can make any necessary changes.
The Startup Cap Table template can also be used for the purpose of determining the total number of shares held by each shareholder. It uses the value of each share to calculate the value of each shareholder. Then it divides the shareholders into five categories and adds up the numbers for the total number of shares held by each category.
The Startup Cap Table template can also calculate the annual returns that will be paid out to the owners of the business. This depends on the assumption that the business will earn a pre-determined amount per year. Then it deducts the cost of starting the business from the value of the equity. This is done according to the assumption that there will be no revenues at the start of the enterprise. The values are then added up to determine the annual dividend payments that will be made out to shareholders. Finally, the formula is used to determine the value of equity.
Startup Cap Table templates were designed by entrepreneurs to aid them in doing the calculation of equity ownership. The templates were not meant to replace the need of professional financial advisors, but they could be used as a supplement to such advisers. In fact, many small businesses have been able to increase their revenues by following this method of computation. Many entrepreneurs find that using startup cap tables is more accurate than using other methods of computation of equity ownership.
The startup capitalization tables available online have helped a lot of startups get their business off the ground. There are a huge number of startups emerging every day, making it extremely difficult to accurately determine the ownership stakes of individual startups. The use of startup cap table templates is a great way for companies to improve their process of determination of stake sizes.