Cap Table and Exit Waterfall by Foresight.xlsx

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2	CAP TABLE TOOL
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4	by Foresight
5	See more models at https://foresight.is
6	hello@foresight.is - @tdavidson
7	Questions, comments, ideas, email hello@foresight.is
8	Copyright 2020 Unstructured Ventures, LLC
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11	LICENSE	SUPPORT
12	License at https://foresight.is/license	Support independent entrepreneurs.
13	Use of this model signifies acceptance of license	Get updates at https://foresight.is/cap-table
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16	GOAL	HOW TO USE
17	The cap table, exit waterfall, and venture valuation tools are intended to be instructional tools to analyze scenarios and rounds. I created a number of sheets to show how specific aspects of cap tables can be modeled in isolation, particularly because for many people building your own cap table is the right way to do it - not to use a template, but to build your own cap table (and exit waterfall) specific to your situation. The base cap table and exit waterfall can also be used to scenario modeling future rounds and exit distributions to shareholders, and built to be easy to use from an export of a share register from Carta, Capshare, or Captable.io. Once you're running a company, I highly suggest using an online cap table management platform, such as: - Carta (formerly eShares) (https://carta.com/) - Captable (https://captable.io/ ) - Capshare (http://www.capshare.com)	1) Each sheet is independent of each other, and all can be safely deleted to only keep the sheets you want to use. 2) Any number in blue with grey shaded background is an input (i.e. an assumption or data point that can be changed), anything in black is the result of a formula. Change blue at will, change anything in black with caution. 3) All cells and formulas are unlocked - as in all Foresight models - so that you can make edits as needed and completely understand what is going on. 4) All assumptions are illustrative ONLY, do not assume they are market data or standard. 5) As with all templates, feel free to create your own model from scratch, using this as a guide. 6) Note: There are a couple "yes/no" dropdowns for turning on circular references in a couple sheets. Essentially, I build models to not require circulars, but some calculations on cap tables require iterative calculations (i.e. the calculation is based on something referring to the calculation), so to do this you must turn on iterative calculations in Excel / Google Sheets to handle the calcs. The formulas are written so that there is a non-iterative variation, but for some situations you will need to turn on circular references to get the exact calculation. By default, these flags are "no" so that you do not get a note about circular references in the model.
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19	UPDATES	DOCUMENTATION
20	If you download or purchase this through https://foresight.is, updates are distributed automatically through my transaction provider (as long as you do not unsubscribe.) If you purchase through any other website, updates to the model require registration with Foresight; email Taylor at hello@foresight.is with your payment receipt to register.	Visit https://foresight.is/cap-table to get more instructions and videos on how to use the model, including details on each sheet and key components.
21	GUIDE
22	1 - Base Cap Table is the default, fully-featured Cap Table that has the full range of features explained in the instructional sheets already built in. It demonstrates issuing an option pool (in premoney and/or postmoney) and note issuance and conversions, with options for all four note/SAFE conversion methods. This is the model you can use to outline your cap table through a number of rounds and situations.
23	2 - Equity Issuance is an example cap table that demonstrates a simple issuance of a first round of equity
24	2 - Equity Issuance Round 2 is an example cap table that builds on the first issuance to show what happens with a second round of equity
25	3 - Premoney Option Pool demonstrates creating an option pool in the premoney (explanation on the sheet)
26	3 - Postmoney Option Pool demonstrates creating an option pool in the postmoney (explanation on the sheet)
27	3 - Option Pool, 2nd Round demonstrates how an option pool is added to in a second round of financing, and is built to handle both premoney and postmoney option pools
28	4 - Convertible Issuance demonstrates issuing a new convertible note.
29	4 - Conversion, Premoney demonstrates converting a convertible instrument at the next round using the premoney method (v1 of the Cap Table Tool only used this method)
30	4 - Conversion, Postmoney demonstrates converting a postmoney SAFE using the method for calculating the share price under these documents
31	4 - Conversion, % Ownership demonstrates converting a convertible instrument at the next round using the percentage ownership method
32	4 - Conversion, $ Invested demonstrates converting a convertible instrument at the next round using the dollars-invested method
33	5 - Exit Waterfall Distribution shows how the shareholders earn proceeds at different valuations based on a variety of assumptions about the terms of their shareclasses. This is the most detailed and most complex part of the instructional sheets. It is a standalone sheet, and can be easily used with any of the cap table examples or your own model.
34	6 - VC Valuation is a separate tool, not connected to the other instructional sheets, that creates a valuation and returns (proceeds, ROI, IRR) forecast for a given investment. Optionally, this can create probability-weighted values.
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36	A couple simplifying assumptions are built into the model.
37	1) Prorata for existing investors into future rounds is an input, not calculated
38	2) Down rounds or recapitalizations will require some restructuring for the appropriate recap round and any anti-dilution provisions.
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