Practice Quiz on Cap Tables

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1. Each of the following is common use of a cap table EXCEPT

1 point

who owns what types of shares

how much equity does each founder own

when is the right time to do an IPO

what is the valuation at each funding stage

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2. The face value of a stock stated in the startup's charter is called

1 point

fractional ownership of shares

par value

the option pool

a cap table

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3. Mark Cuban wants Beatbox to create an option pool on a pre-money valuation basis as part of his investment agreement. Beatbox establishes an option pool that represents 15% of the issued shares of stock before Mark invests. Which of these is one of the effects of this act?

1 point

The founders' ownership is diluted before Mark invests

Mark Cuban's investment is diluted because the option pool is created

Justin, Aimy, and Brady each retain 33% in equity ownership.

All Beatbox employees immediately and collectively own 15% of the company

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4. The shares the founders assigned to themselves when they created the startup and charter are considered to be

1 point

founder splits

options

authorized

issued

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5. What is an important assumption for startups when they approach Series A financing?

1 point

how accurately the VC will apply the risk mitigation method to determine post-money valuation

VC firms expect you to adjust the option pool to around 50% or so after they invest

most VC firms expect to get around 20% at this stage

if you don't have all your key positions filled yet you can negotiate a smaller percentage of shares committed to the option pool.

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