Glossary Term Cap Table Docs: 13 terms

A capitalization table (cap table) is a detailed record of a startup’s ownership structure, listing all shareholders, their percentage of ownership, and the types of securities they hold. It is a crucial tool for founders, investors, and employees to understand…

A Convertible Debt Agreement is a financing method used by startups to raise capital while postponing valuation discussions. It allows investors to lend money to a startup with the expectation that the debt will later convert into equity under predefined…

Documents related to equity issuanceDocuments related to equity issuanceDocuments related to equity issuance in a startup are essential for managing ownership, investor agreements, and legal compliance. These documents outline how shares are allocated, transferred, and governed. Key Documents for Equity Issuance in a Startup • Stock Purchase Agreement – Defines the terms under which shares are sold to investors, including price, rights, and obligations. • Shareholder Agreement – Establishes shareholder rights, voting power, transfer restrictions, and dividend policies. • Equity Incentive Plan – Governs stock options and grants for employees, detailing vesting schedules and exercise rights. • Cap Table (Capitalization Table) – Tracks ownership distribution, including founders, investors,... in a startup are essential for managing ownership, investor agreements, and legal compliance. These documents outline how shares are allocated, transferred, and governed. Key Documents for Equity Issuance in a Startup…

A startup’s funding historyA startup’s funding historyA startup's funding history refers to the timeline and details of the financial investments it has received throughout its growth. It provides insight into how the company has been financed, the types of investors involved, and the valuation changes over time. Key Aspects of a Startup's Funding History: • Seed Funding – The initial capital raised, often from angel investors, accelerators, or early-stage venture capital firms. • Series Funding (A, B, C, etc.) – Successive rounds of investment that help the startup scale operations, expand market reach, and develop products. • Convertible Notes & SAFE Notes – Early-stage funding instruments... refers to the timeline and details of the financial investments it has received throughout its growth. It provides insight into how the company has been financed, the types of investors involved, and the…

Historical and projected dilution analysisHistorical and projected dilution analysis refers to the evaluation of how a startup’s ownership structure has changed over time and how it is expected to evolve in future funding rounds. This analysis is crucial for founders…

Investment RoundsInvestment Rounds in a Startup refer to different stages of funding that a company secures as it grows. These rounds help startups raise capital, attract investors, and fuel expansion while adjusting valuations based on business performance and market conditions.…

A list of shareholdersA list of shareholdersA list of shareholders in a startup is a formal record of all individuals and entities that own shares in the company. It is an essential document for tracking ownership structure, investor participation, and equity distribution. Key Components of a Shareholder List: • Shareholder Names – Identifies all individuals or organizations holding shares. • Number of Shares Owned – Specifies the quantity of shares each shareholder possesses. • Share Classes – Differentiates between common stock, preferred stock, or other equity types. • Ownership Percentage – Displays each shareholder’s stake in the company. • Voting Rights – Indicates whether shareholders have... in a startup is a formal record of all individuals and entities that own shares in the company. It is an essential document for tracking ownership structure, investor participation, and equity distribution. Key…

Major financial decisionsMajor financial decisions in a startup revolve around managing resources, securing funding, and ensuring sustainable growth. These decisions shape the company’s financial health and long-term success. Key Financial Decisions for Startups • Funding Strategy – Choosing between bootstrapping,…

Option GrantsOption Grants in a Startup refer to stock options provided to employees, advisors, or investors, giving them the right to purchase company shares at a fixed price in the future. This is a key component of startup compensation, used…

A SAFE noteA SAFE noteA SAFE note (Simple Agreement for Future Equity) is a financial instrument used by startups to raise capital from investors without immediately determining the company's valuation. It was introduced by Y Combinator in 2013 as a simpler alternative to convertible notes. How SAFE Notes Work: • Investor Agreement – An investor provides funding in exchange for the right to receive equity in the future. • Trigger Event – SAFE notes convert into shares when a qualifying event occurs, such as a priced equity round or the sale of the company. • Valuation Cap & Discount Rate – Investors may receive... (Simple Agreement for Future Equity) is a financial instrument used by startups to raise capital from investors without immediately determining the company’s valuation. It was introduced by Y Combinator in 2013 as a simpler alternative…