Overview

Most startups are initially financed by their founders. They contribute relatively small amounts of money for the company to make its first steps. If the business idea proves feasible, there will be the first real funding round (“seed” funding) when the company receives financing from external parties (often referred to as “angel investors”).

If, following this round, the company performs well, there can be further drawdowns of external financing to keep the business growing. In most real-life examples there will be up to three rounds (Series A, Series B and Series C), after which the company can go public or be sold to a strategic investor. At each funding round there will be changes in equity shares held by current shareholders based on the amounts contributed by the new investors and the market value of the company.

This template allows to model up to five investment rounds and full exit for up to 10 common-stock investors. It includes key profitability metrics for each investor (IRR, equity multiple and gross return).

You can use this cap table to keep track of your investors or to build it into your financial models and analyze financing alternatives.

The table is accompanied by five professionally designed magazine-quality charts showing:

  • changes in company valuation resulting from investor contributions and market value uplifts
  • composition of final equity value by investor and overall equity value increase
  • a snapshot of each investors contributions, distributions and profitability
  • holding period for each investor
  • equity share changes by round and by investor

Excel challenges:

  • The XIRR function does not work if cash flows in first period(s) are zero. This is the case for investors joining at the second round and thereafter. I am giving a smart escape from this limitation.

There is a capitalization chart depicting investor contributions at each round and a steady equity appreciation in a time scale. This chart is somewhat unusual – but I will show you the trick!

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