Cap Tables

from Formation to Exit

Contents
Introduction........................................................................3 Series A................................................................................16
Term Sheet.................................................................................... 16
Company Formation...........................................................4
Converting the Note.................................................................... 16
Shares and Share Capital.......................................................... 4
Convertible Note Shuffle............................................................ 17
Share Classes and Share Rights.............................................. 4
• The Investor Friendly Approach...................................... 17
Articles of Association and Memorandum of Association.. 5
• The Founder Friendly Approach...................................... 17
Primary Transactions: Issuing Shares.................................... 5
Series A Negotiations................................................................. 18
The Company’s First Cap Table................................................ 5
Series B-G..................................................................................... 19
Seed Round.........................................................................7
The Exit................................................................................21
Valuation Pre-Money and Post-Money.................................... 7
M&A................................................................................................. 21
Option Pool Shuffle..................................................................... 8
IPO.................................................................................................. 21
• The Founder Friendly Approach...................................... 9
A Likely (and Simplified) Exit Scenario.................................... 22
• The Investor Friendly Approach...................................... 9
The Company’s Second Cap Table.......................................... 9 Summary.............................................................................23
Employee Equity Remuneration.......................................10
Stock Options, Warrants and Phantom Shares.................... 10
• Stock Options..................................................................... 10
• Warrants.............................................................................. 11
• Phantom Shares................................................................ 11
Equity and Cash Split.................................................................. 12

Convertible Note.................................................................13
Standard Convertible Notes...................................................... 13
SAFE Note..................................................................................... 13
Advanced Subscription Agreement......................................... 14
When to Use a Convertible Note............................................... 14
The Company’s Fourth Cap Table............................................ 15
The Cap Table – From Company Formation to Exit The Cap Table – From Company Formation to Exit

Introduction
A recurring topic of conversation we have here at Capdesk
is, unsurprisingly, that there’s a need for companies to be
more knowledgeable about the capitalization table, also
known as a ‘cap table’. We see ‘broken’ cap tables all the
time and, more often than not, companies make mistakes in
their shareholder registers or employee share plans because
of that. These mistakes can sometimes cost businesses
millions of pounds. And, for the record, if you’re curious
about what kinds of cap table management errors we see in
the hundreds of companies we help, you can read all about
it here.

Oftentimes, it can be difficult to fully grasp the severity of

consequences we have not personally experienced. That’s
why, unfortunately, many businesses don’t understand
just how important it is to pay huge attention to details of
ownership until they reach a crucial stage in their journey
(such as an acquisition), by which point it’s too late to prevent
the chaos resulting from mistakes in equity reports. The cap
table is the cornerstone of all equity reports and filings, as
well as an important part of any company throughout its life
- from formation to exit. It’s the database in which rights to
the company’s value are listed and, as we will illustrate over
the next few chapters, it’s not always easy to understand how
cap table decisions affect the company stakeholders. In our
exploration of the topic, we will mainly focus on understanding
cap tables for UK companies, but some references will be
made to European norms in general.

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The Cap Table – From Company Formation to Exit
Company
Formation
The first time that a founder will have to make decisions
which will affect the company cap table is when forming
the company. In most jurisdictions, a company entity is
necessary for the founder to provide services without
personal liability and to operate with VAT. To form the
company, the founder has to make several decisions
regarding the company’s shares and share capital, as well as
produce articles of association.
Further reading on company formation:
Crunch gives a summary of reasons why to
start a limited company in the UK.
4
Shares and Share Capital
First, the founder has to decide how many shareholders
will be involved in the business. If the company expects
to receive investment at a later stage, it should consider
issuing plenty of shares already from its formation. This
can solve the need for corporate actions (and the admin
work that comes with it) later on, such as doing a share
split, whereby existing shares are multiplied and share
certificates re-issued.
The number of shares issues per shareholder, as well as the
individual share’s nominal value, will vary from business
to business. Note that shares are issued against capital
investment, which means the founding partners will have
to invest an amount corresponding to the number of
shares multiplied with the nominal share price. In the UK,
shares can be issued at a nominal value of 0.000001 (six
decimals), so a company can be founded with 1,000,000
shares against a capital investment of £1.
The £1 capital requirement in the UK is quite generous to
entrepreneurs. In countries where capital requirements
are higher than £1, it’s worth to remember that the capital
invested in the company formation will be recorded on the
balance sheet and can be used in the company’s operations.
Share Classes and Share Rights
When decisions have been made regarding the number of
shares and capital investment, it’s time to consider share
classes (i.e. types of shares) and the share rights that
come with each of these. From a legislative perspective,
there are no limitations to the number of shares or share
classes a company can issue, but best practice is to keep
things simple and incorporate the company with a single
share class. The company can soon enough have a need
for more share classes, especially if the strategy is to build
the company with venture capital investment. For example,
a venture capitalist (VC) will often insist on a new class of
shares with specific rights when investing (which we will
get back to in chapter Series A negotiations), so it’s smart
to start with as few classes as possible to avoid your equity
structure becoming overly complicated down the road.
Indeed, most companies will incorporate with a single
class of shares, called ‘ordinary shares’ (the name can be
changed later if there is a need for it). An ordinary share will
assign shareholder voting rights and dividend rights, also
known as share rights. Voting rights means the right to vote
at the company’s general assembly, and can be assigned
with any multiple. Some ordinary shares can have one
vote, while others may have 10. Dividend rights mean the
shareholders right to participate in the company’s profits.
 The Cap Table – From Company Formation to Exit

Articles of Association and
Memorandum of Association
In the UK, the thoughts and decisions regarding the number
of shares and share rights should result in two documents
necessary for formalising the company formation - the
articles of association and a memorandum of association.
A company’s articles of association constitute a document
defining its purpose and regulating its operations. Share
classes, share rights, and share capital are defined in
the company’s articles of association as all have an
effect on how different tasks are to be performed within
the organization.
A memorandum of association gives an account of the
subscribers participating in the company’s formation.
More specifically, the document includes the name of the
company, the name of its subscribers, as well as each
subscriber’s signature.
Once these documents are formalised, the company can
officially be formed and start issuing shares.
Primary Transactions:
provided by the company) and return it along with the
relevant payment for the shares they wish to buy.
The company must then host a board meeting, where all
potential shareholders’ applications are reviewed, and
a decision is made about what shares will actually be
allotted and to whom. The meeting’s final decisions must
be formally reported in a document called ‘board resolution’.
The exact contents of this may vary, but as a minimum
it should outline the number and nature of shares issued
and to whom, specify the forms that need to be submitted
to Companies House following the issuance, authorise the
issuance of share certificates to the new shareholders,
and highlight the updates that need to be made to the
company’s register of members and register of allotments.
Following that, a business in the UK will have to issue share
certificates to its new shareholders. This should be done as
soon as possible, and no later than two months after the
share allotment, because a share application usually only
becomes binding once the applicant becomes notified that
his or her application was accepted. Therefore, in theory,
the company could end up issuing shares and have the
applicant withdraw their application shortly after, creating a
bureaucratic headache for management.
two months after its board resolution meeting. The register
of allotments must also be updated to reflect the details
of each individual share issuance - in other words, even
if shares are issued to an existing shareholder within the
company, the business still needs to update its register of
allotments to illustrate the new shares this person received.
As a side note: even though the company doesn’t need to
worry about this right away, it will ultimately have to provide
the details of its new shareholders when filing its Annual
Confirmation Statement (i.e. CS01) to Companies House. To
read more on how to file a confirmation statement, take a
look at our relevant guide .
The Company’s First Cap Table
In the following example, we’ll form a company with two
equal co-founders. Each will receive 100,000 ordinary
shares on a nominal value of £0.01 in exchange for an
investment of £1000. The company will now have two
shareholders, 200,000 shares outstanding (i.e. the total
equity held by the stakeholders), and a share capital
of £2000.
Shareholder Ordinary shares % Ownership £ Value

Founder I 100,000 50% £1000

Issuing Shares
A share issuance, (often used interchangeably with the term
‘share allotment’), is a common way for businesses to raise
funds or otherwise benefit the business (e.g. offer them as
an incentive to recruit key employees). To issue shares to a
new shareholder, the first step is to simply offer them to that
person verbally or, more formally, in writing. The recipient
must then fill out an application for new shares (normally
The next step is filing an SH01 to Companies House, to notify
Founder II 100,000 50% £1000
them about the company’s current capital structure and
any amounts that have potentially not been paid on them.
Finally, the register of members and register of allotments
will have to be updated to reflect all new share issuances.
Technically, new shareholders are officially recognised
as such when they’ve been added to the company’s
shareholder register. Note that, in the UK, the company is
legally obliged to register its new shareholders no later than

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The Cap Table – From Company Formation to Exit

figure 1 - The share issuance process

Make
Make offer
offer to
to Hold Board Meeting
potential shareholder
potential shareholder (Board Resolution)

1 22

Issue Share Certificates

for Shareholders

File SH01 to File an Annual CS01 to

Companies House Companies House

4 5

6

Seed Round
The term ‘seed round’ is used to indicate an early
investment in a startup company which is made before the
company has any revenue and often before there’s even a
product available.
A seed round investment is usually considered to be a
high risk investment. Due to this high risk, investors in
seed companies are often private individuals with good
knowledge of the founding team or by industry experts with
good domain knowledge. Such individuals are commonly
known as business angels or angel investors.
Not every company will need equity investment from an
external investor, but it’s very common in businesses with
high start-up costs, long route to first revenue, and few
tangible assets (such as manufacturing tools) which can be
used as leverage in loan financing.
The company’s cap table will be affected by the seed round
when new shareholders or debt holders are investing in the
company and is central of deal preparation, negotiation
and valuations.
Valuation Pre-Money and
Post-Money
Valuations can be tricky, especially in the early days of a
company’s life where there are few or no tangible assets.
At this stage, a valuation is more art than science and
it’s the result of negotiations between the investing and
issuing parties. Parameters to consider when setting
a company valuation is the valuation of comparable
companies and the future capital requirements of the
The Cap Table – From Company Formation to Exit
business. A company with high capital requirements
should generally be valued higher, in order to account for
further dilution before reaching profitability. In the following
example, we’ll use a £1 million investment into the company
at a £4 million pre-money valuation. Deals like this are
usually agreed on a pre-money basis. Pre-money means
the valuation of the company before any new cash has
been invested. Post-money means the valuation after the
money has been invested. It is important that the parties
are aligned and explicitly agree on the valuation. As this
example shows, the difference between pre and post-money
is quite severe for both parties:
Investment Dilution % - percentage
£1M at £4M pre-money 20%
£1M at £4M post-money 25%
The valuation discussion is important to the founders
whose initial £2000 investment now has a paper value
of £4,000,000. That’s a great return after a couple of
months working on a good idea. It’s therefore crucial to
consider “paper value” - the shares are worth nothing before
materialisation. As we shall see in the following paragraphs,
the initial share value registered on the cap table will go
through numerous stages and changes before the company
reaches an exit.
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The Cap Table – From Company Formation to Exit

Option Pool Shuffle
When negotiating their seed funding, companies often
face the challenge of forming a solid strategy to attract
new talent that will contribute to building and scaling the
business. In a company’s early days, it is often impossible
to compete with established businesses based on salary,
so founders have to approach recruiting in other ways. For
example, they can offer attractive working lifestyles, flexible
working hours, better company culture, or promise share
options and thereby give employees the opportunity to
participate in the company’s value. At this stage, a company
will typically issue 10%-15% of its total share capital to the
option pool - also referred to as an ‘equity pool’ to denote
the inclusion of other equities, such as warrants.
The Investor Friendly approach, which is also called a
‘pre-money pool’, gives the investors a greater share of the
company. In this approach, employee share options are
allocated first, and then the investor is allocated his or her
shares. As a result, the investor share allocation dilutes
the share option pool, and therefore the VC ends up with a
greater percentage of the company.
Figure 2 - Creating a pool pre- and post-money
The Founder Friendly approach, also known as a ‘post-
money pool’, is the opposite way of issuing shares to
investors and ultimately gives them a smaller share of
the company. The investor is allotted shares first, and the
option pool is created subsequently. The effect of this is
that the investor’s shares are diluted by the new pool and
he or she therefore ends up with a smaller percentage of
the company.

The option pool shuffle relates to a question of how many Pre-money shares are allocated to pool and
investor simultaneously. Only existing
shares will be ultimately allocated to investors when the Pool shareholders are diluted.
company also creates an option pool to reserve shares for
employees. In terms of the above, there are two different
approaches to creating an option pool: the Investor Friendly
Approach and the Founder Friendly Approach.

Allocate shares to
Post-money option pool.
Allocates shares to
Pool investor. existing
Existing shareholders
shareholders are
and new investor are
diluted.
both diluted.

Existing share capital

New option pool allocations
New share capital issued

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 The Cap Table – From Company Formation to Exit

In the following section, we will illustrate the difference
between the two approaches. In our example, before
receiving its £1 million investment the company’s total
number of shares is 200,000 with a pre-money valuation
of £4 million. The option pool will be 10%.
The Founder Friendly Approach
Allocating shares based on a founder-friendly approach, the
company is issuing shares to the investor before creating
the employee option pool. To find the number of shares
issued to the investor, we have to first find the share price:
Pre-money valuation £4,000,000 / Shares outstanding
200,000 = £20.00 per share. The number of shares can
now be determined, by dividing the investment amount
£1,000,000 by the share price of £20.00 = 50,000 shares.
Creating the option pool following the allocation will then
result in 27,778 shares (10% of 277,778 shares the new total
number of shares) and dilute the investor’s position to 18%
ownership (50,000 / 277,778 = 18%).
In this scenario, the company will issue shares to the option As the comparison between the two approaches reveals, the
pool and then to the investor. To calculate the allocations, option pool has a significant effect on the founder’s share
we first have to set a share price for the round. The price is value which has dropped from £4,000,000 in the founder
calcula ted as pre-money valuation / (shares outstanding friendly scenario to £3,500,0000 in the investor-friendly
+ options). Since the option pool allocation and the investor scenario. Further, while the investors share value remains
allocation are both linked to the post-money total number of the same in the two scenarios, the number of shares
shares, we’ll have to make assumptions so that the option allotted increase by 7,142 shares. This difference will have a
pool becomes 10% or close to post-funding. In this example, significant effect on the investor’s position later on.
the assumptions lead us to a share division of:
Shareholder Ordinary shares % Ownership
The Company’s Second
Founders 200,000 70% Cap Table
Seed Investor 57,142 20%
Following the seed round, the company will issue new
Option Pool 28,152 10% shares and update the cap table. The option pool will be
Total 285,644 100% included in the cap table’s fully diluted ownership, but will
not have the right to exit proceeds before the option is in the
We can use the allocation to calculate the share price: Share hands of an option holder with the right to exercise. So until
price = pre-money valuation of £4,000,000 / (issued shares the company starts granting options, all capital proceeds
200,000 + option pool shares 28,152) = £17.500033 will be shared between the founders and its investor.

Shareholder Ordinary shares Ownership-% £ Value The price per share can be used to compute the investor’s Shareholder Ordinary shares % Ownership £ Value
real investment size based on £17.500033 * 57,142 shares =
Founder I 100,000 36% £2,000,000 Founders 200,000 70% £3,500,007
£999,987 investment.
Founder II 100,000 36% £2,000,000 Seed Investor 57,142 20% £999,987
Seed Investor 50,000 18% £1,000,000 Shareholder Ordinary shares Ownership-% £ Value Option Pool 28,152 10% £499,993
Option Pool 27,778 10% £555,560
Founders 200,000 70% £3,500,007 Total 285,644 100% £4,999,987
Total 277,778 100% £5,555,560
Seed Investor 57,142 20% £999,987

The Investor Friendly Approach Option Pool 28,571 10% £499,993

Total 285,713 100% £4,999,987

An experienced investor will most likely ask the founders to
take an investor-friendly approach and issue shares to the
option pool before investors so that the option pool will total
10% post-money.

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The Cap Table – From Company Formation to Exit
Employee Equity
Remuneration
After concluding the funding round, our example company
has enough cash to start recruiting employees to help
build the business. It has even made the option pool as
requested by the seed investor, and will actively be using
options to align the team and mitigate some of the salary
competition. But, what kind of securities should it be
issuing and how many? There is a number of securities
that could be considered here, but in this chapter we’ll be
looking closer into stock options, warrants, and phantom
shares in particular.
10
Stock Options, Warrants and
Phantom Shares
Stock Options
A stock option, or share option, is a contract that gives the
recipient (usually an employee) the right to purchase shares
in the company at a specified price (also known as the
“strike price”) by a specific date. The employee is under no
obligation to buy, or “exercise”, any or all of his or her options.
Typically, but not always, options will “vest” over time. In
other words, the employee will not be able to exercise his
or her options straight away, but will have to wait until a
specific point in time whereby some or all of the options
have vested - i.e. have become exercisable. If an employee
leaves the company or is fired, they typically have 90 days
to exercise their unexercised options that have vested or
they implicitly forfeit them. Employees will typically forfeit
any unvested options.
Unlike shares, options aren’t taxed until they are exercised,
so long as they were issued at or above the fair market
value of the underlying shares. Options, though not actually
shares, are typically counted as part of the “fully diluted”
shares of a company.
Companies establish share option programs as part of an
overall employee compensation plan for several key reasons
Notably:
1. Option programs can boost employee morale and help
attract talented, high-skilled workers who are motivated
to help the company improve and succeed.
2. Employees holding options to purchase shares feel
more like owners or partners in the business and are
invested in the company’s success.
3. In addition to being a benefit for employees, share
option plans are cost-effective for companies with the
only significant costs to the company being the lost
opportunities to sell some shares at market value in the
future and the expense of administering the plan.
 The Cap Table – From Company Formation to Exit

Options are a key currency in early stage companies, who Warrants

often make a bargain with staff of below-market/lower cash
compensation in exchange for a share of the company’s A warrant is similar to options - i.e. contractual rights for
future success. It’s a critical incentive to attract talent while investors or other third parties to buy stock in the company
the company is still cash poor. at an agreed price within a set timeframe. However, it
differs from options in that it’s not issued through the
company’s option pool. Nevertheless, the board still has
Figure 3 - The share issuance process to approve allotment of warrants. In some jurisdictions -
mainly continental Europe - warrants are often preferred
Vesting Period over options as a security for employee remuneration, due
The period between the grant issuance and when the grantee’s to tax considerations. In early-stage deals, companies
options are fully vested. After the cliff, options often vest in
equal monthly or yearly tranches. Eg. a schedule could vest 75 can offer warrants as an incentive for investors to invest
options after a cliff of 12 months and then vest 10 options a sooner rather than later, given that warrants allow investors
month for the next 36 months.
the opportunity to ‘top up’ their initial investment at the
same price in the future, thereby reducing the risk of
that investment. This practice is often combined with
the issuance of convertible notes. The combination is
Cliff % particularly attractive to investors because warrants
Describes how large
a portion of the total represent an upside appreciation without any capital
grant forms the commitment, while convertible notes are a loan that often
cliff. Eg. if the total
grant size id 240 carries interest. As a result, investors are protected as debt
options and the cliff holders - i.e. they get cash back before shareholders if the
percentage is 25%,
then 60 options will
company is liquidated or have considerable risk-free upside
vest on the cliff if the company becomes successful. The value of warrants
date. for their holder is the difference between the exercise
Time price (strike price), which is typically set at fair market
Grant Issued Cliff Fully Vested Exercise value on the day of issuance, and the fair market value of
A contractual promise is A pre-agreed date Once options are Usually, option holders exercise the company’s share price on the day of exercising. For
made to the employee upon which the first vested, they can be on “exit”, or when leaving the
that he will be able to portion of the grant’s exercised. company. However, sometimes
example, a warrant with an exercise price of £10.00 which is
exercise a certain options vest. they partially exercise during the exercised at a share price of £100 represents a £90.00 gain.
number of shares for a vesting period (before the grant
fixed price in the future. vests fully), and other times they
can only exercise when certain The warrant holder will look for the share price to exceed
conditions are met. the exercise price before the expiration date to get the
benefit. If the share value has not exceeded the exercise

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The Cap Table – From Company Formation to Exit
price, the warrant is rendered worthless and the holder can
simply allow it to mature without exercising. It’s important
to note that the gain does not necessarily materialise
in the form of cash at the time of exercise, but can also
simply become shares. Most warrants have long expiration
dates - expiration terms of up to 10 years into the future are
common. Investors are not required to exercise warrants
but, as mentioned already, they will become worthless
once they expire unexercised. Companies do not have
any responsibility to remind investors about the warrant
expiration dates, so if you are investing in a company
through warrants it’s a good idea to set a reminder about the
expiration date.
Phantom Shares
Don’t let the name to mislead you - a phantom share
is neither a share nor an option. It is a cash bonus plan
that ‘walks and talks’ like a share option plan. A phantom
share option will never result in the company issuing an
option to the holder, but the amount of the bonus is tied
to the number of vested options and market value of the
company’s shares.
In a phantom share plan, the recipient is granted an option
over a number of shares at a pre-set option price which is
usually - as it is with options and warrants - the company’s
share’s market value at the date of the grant. The option will
vest over time so that the holder’s rights to bonus increase
over time to reflect the fact that he or she has contributed
to the value of the company. Upon exercising the option, the
holder receives a cash bonus equivalent to the difference
12
between the market value of the shares at the time of However, the key word for employees in this discussion is
exercise and the option price. “potential” benefit. There is no guarantee that the options
will ever actually materialise into cash. So how can the
For startups, phantom shares are a flexible way of involving company and employee achieve a good balance between
employees and advisors in the growth of the company with professional and financial benefits?
less legal and tax work compared to options and warrants.
They are widely used in countries such as Germany, where In our example company, the founders are looking for the
tax legislation is strict on equity remuneration. The downside best available talent, quickly realising that the best people
to phantom shares for the recipient is that any resulting already have jobs - well-paying jobs! They receive a lot of
gains will be subject to income tax rather than capital gains interest from candidates who are interested in swapping
tax, which is often a higher tax bracket. their corporate job for a startup lifestyle, but the salary
package can be a limiting factor for some candidates.
Equity and Cash Split The solution for these cases is issuing options. The new
employees can afford a small cut in salary against an
How many options should a company give employees upside in options. By using options the company can sell
and what is the optimal split between cash and options to the entrepreneurial dream, being part of the team and the
ensure employee motivation? The internet is full of advice potential of participating in a big exit someday in the future.
and calculation methods for distributing the optimal number
of share options. In reality, the answer is that there is no
recipe. It’s all up for negotiation between each particular
company and its employees.
From a company’s point of view, options are a great way
of remuneration. The employee has to buy the option at
exercise price and is only compensated for the value they
help create for the company. It’s cheaper than cash, and
simultaneously helps align the team towards one common
goal. For the employee, options represent a potential asset
that can be worth much more than a salary. For example
Facebook’s IPO created more than 1000 new millionaires
and multiple other IPOs have the same for employees.

Convertible Note
In this chapter, we will explain what a convertible note
is, when a company should consider raising money on a
convertible note, and how it affects the cap table.
Standard Convertible Notes
A standard convertible note is a form of short-term debt that
converts into equity, typically in conjunction with a future
financing round. Here’s how it works: the investor loans
money to a company, which can carry interest, although not
always. When paying back the loan’s principal plus interest
(if any), the company can pay the investor back with either
cash or equity, in the form of shares. A convertible note
holder does not
have voting rights in the company before the note has
been converted. A standard convertible note agreement will
usually stipulate terms like:
• Discount Rate: A valuation discount which noteholders
will receive relative to investors in the future financing
round, which compensates the note holder for the risk
of investing earlier.
• Valuation Cap: The highest possible company valuation
at which the note can be converted into equity. It
protects convertible note holders if the company raises
its next round at a valuation that exceeds the valuation
cap.
• Interest rate: Standard convertible notes typically
accrue interest on market terms. It is a compensation
to the investor for the time the note is outstanding.
Accrued interest will be added to the principal and
increase the number of shares issued upon conversion.
The Cap Table – From Company Formation to Exit
• Maturity Date: This denotes the date on which the note
is due, at which time the company needs to either raise
qualified financing or repay the note.
• Qualifying Financing: An amount invested in a future
funding round which will provide the company with a
decent runway and will trigger the conversion of the
note.
SAFE Note
A SAFE (simple agreement for future equity) note can
substitute a convertible note, but is often considered as a
simpler solution in the sense that it takes the form of a five-
page document, where no terms other than the valuation
cap and discount rate are negotiable. SAFE notes were
initiated back in 2013 by the accelerator Y Combinator, with
the aim to simplify the process of raising seed funds for
startups, by removing interest rates and maturity dates from
the agreement.
Although SAFE notes are convertible security (i.e. they
can convert into shares later on), they are different from
convertible notes in that they do not create debt and mount
up interest. Similarly to options, a SAFE note simply offers
its holder the opportunity to buy shares at some point in the
future, typically at a discount.
1. There are four types of SAFE notes:
2. Valuation cap, no discount
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The Cap Table – From Company Formation to Exit
3. Discount, no valuation cap
4. Valuation cap and discount
5. No valuation cap, no discount, most favoured
nation (MFN) clause.
While SAFE notes offer companies and investors a faster,
more affordable way to complete transactions - which
might be a great advantage, especially in the early stages of
a startup - they offer less flexibility and potential for future
negotiations. That’s why opinions vary about whether they
are preferable to convertible notes, and one could argue that
this depends on the interests of the specific investor and/
or company.
Further reading on SAFE notes
If you’d like to dig a little deeper on the topic,
Upcounsel gives some great insights here.
Advanced Subscription
Agreement
An Advanced Subscription Agreement (ASA) is used in
the United Kingdom, and also resembles the convertible
note but this time in terms of being treated as debt on the
balance sheet until a company’s next funding round. Both
documents constitute an equity agreement, however unlike
convertible notes ASAs cannot be paid back in cash, do not
carry interest, and do not need to be repaid within a fixed
period of time. They are simply a way for investors to pre-
pay for shares that will be issued during a future funding
round at a discount.
14
The main benefit to investors is that ASAs can qualify for
SEIS/EIS treatment, giving investors a tax incentive to buy
into the company. In order to qualify for SEIS/EIS the ASA will
convert into ordinary voting shares.
Investors normally receive the shares they are entitled
to during the company’s next funding round, provided
that the company reaches a certain target that has been
predetermined in the ASA. If the company does not reach
this target, then the investor receives his/her shares by a
certain ‘ultimate’ date - formally known as the Long Stop
Date - and the number of shares he/she will be allocated
is determined by a certain fixed price - known as the Long
Stop Price. Both Long Stop Date and Long Stop Price are
agreed upon from the beginning in the ASA. In the event
that the company becomes insolvent before the qualifying
funding round, the investor might be paid back in cash. If
the company is sold before the qualifying funding round,
shares will normally be issued right before the funding round
at the sale valuation or at a discount. In all three scenarios,
the exact way of compensating the investor depends on
what has been predetermined in the terms of the ASA.
When to Use a Convertible Note
A convertible note is used when a company and investors
cannot agree on a valuation for the company. There can be
multiple reasons for this. Typically if a company is at a very
early stage (for example, idea stage), it can be difficult to
agree on a specific valuation and thus smart to postpone
the decision until a later funding round when the company
has matured. It can also be the case that a company has
urgent capital requirements or needs a little extra runway to
achieve the next stage of development. Using our company
as an example again, a likely scenario for a convertible note
could unfold as follows:
Following the Seed Investment, the company had budgeted
with a runway of 18 months to reach Series A. They have
hired the first employees, the product is on the market, and
they have some initial customers. But after 12 months,
it appears that they are falling a little behind targets.
Accepting that they cannot achieve Series A with the
desired metrics and likely not at the desired valuation, they
decide to postpone until the business metrics are in place.
Management thinks they will need an additional 6
months and £1 million to achieve the desired milestone.
This is obviously an issue that has to be addressed. A bank
loan is not feasible with small revenue and large cash burn.
Equity investment would require valuing the business and
could set a benchmark for the upcoming Series A. As a
result, attention falls onto a convertible note.
The same category of investors who showed interest in
the first round will usually have an interest in a convertible
note at this stage. The company has matured a bit and thus
reduced investment risk, but there is still an opportunity
to get in before Series A at a lower valuation. Knowing this,
the company is assisted by its seed round investors with
introductions to potential new investors. They quickly get
a couple of offers from investors who are interested in
investing £1 million through a standard convertible note with
5% annually compounding interest rate on a day model with
365 days/ year. The valuation cap is set at £10 million and a
20% discount rate to the next investment.
 The Cap Table – From Company Formation to Exit

The Company’s Fourth Cap Table

Accepting an offer from a seed extension investor, the
company now has the 4th version of their cap table. Notice
that the convertible note is listed as debt on the balance
sheet and does not yet have any equity ownership. Further,
employees have now vested options which are the options
that have been issued from the option pool and now can be
exercised by employees. The company can choose to issue
more shares to the option pool when all options have been
granted to employees.

Shareholder Ordinary shares % Ownership £ Value

Founders 200,000 70% £3,500,007

Seed Investor 57,142 20% £999,987

Employees
20,000 7% £350,000
vested options
Option Pool 8,571 3% £149,993
Convertible £1,000,000 +
0 0%
note interests
Total 285,713 100% £4,999,987

15
The Cap Table – From Company Formation to Exit

Series A
‘Series A’ refers to a company’s first venture capital
investment round. The term is meant to reflect the first
issuance of preference shares - preferred A shares. In
this chapter, we will take a close look at the Series A term
sheet, negotiations, and preferred shares.
Three VCs are expressing interest to invest; the VC with most
domain knowledge is appointed to be lead investor. The lead
investor will be responsible for negotiating the investment
deal terms with the company on behalf of all the investors.
A VC round is more complex than the angel rounds which
One of the tasks at hand during the term sheet stage is to
present a cap table for the investment round - both pre- and
post-money. To do so, the company first has to make a new
pre-money valuation and convert the outstanding note.

Our company is now performing really well, growing fast,

and sees several venture capital funds showing interest
in investing. The company is generating revenue, but is
not yet cash-flow positive and will need a boost to achieve
ambitious growth plans. The management decides it’s time
for a Series A. The ambition is to raise £15M at a £20M pre-
money valuation to fuel international expansion.
the company has prior experience with and which can be Converting the Note
closed with a simple handshake. VCs are complex entities,
with investors of their own, and have to go through a strict The first step in organising cap table scenarios for the round
selection process before any capital is committed. The is to convert the note from debt to equity. The note has
first step for a company raising VC money is to attract the accrued interest over the last year and the initial loan of
attention of one partner. If the partner likes the business £1,000,000 has grown with £50,280.75 to £1,050,280.75.
and its potential, they will present it to the other managing The updated cap table is looking like this:
partners. The company will often be invited to present the
business in front of the partners, and if all partners agree on
the business they will proceed to the term sheet stage.
Ordinary
Shareholder % Ownership £ Value
shares
Term Sheet Founders 200,000 70% £3,500,007

A term sheet is a nonbinding agreement setting forth the Seed Investor 57,142 20% £999,987
basic terms and conditions under which an investment will Employees vested
20,000 7% £350,000
options
be made. A term sheet serves as a template to develop
more detailed legal documents. The key here is to agree Option Pool 8,571 3% £149,993

that the parties will negotiate and invest legal resources in Convertible note 0 0% £1,050,280.75
a deal. Total 285,713 100% £4,999,987

The company can bring their own term sheet, but most often
The company had agreed a valuation cap of £15,000,000
the VC will bring their term sheet to the deal. The term sheet
with their investor. This is the highest valuation that the
will typically map out a time frame within which the parties
loan can be converted to. It was also agreed to implement a
involved will negotiate between them, and not negotiate with
discount of 20% on all valuations lower than £15,000,000.
any other parties.

16
 The Cap Table – From Company Formation to Exit

The Series A investors will invest in the company at a pre- ways to determine the shares to be allocated and the price Prefer- %
Shareholder Ordinary A £ Value
money valuation of £20,000,000. Alas, the new valuation paid per share. Let’s see what happens to the allocation of ence A Ownership
is higher than the valuation cap for the convertible note shares to our new investors in two different scenarios: Founders 200,000 - 38% £14,000,063
and thus triggering the conversion of the note from debt
Seed Investor 57,142 - 11% £3,999,958
to equity at £15,000,000. The discount would only kick The Investor Friendly Approach
Employees
in at valuations under the cap and is no longer eligible vested 20,000 - 4% £1,400,006
for conversion. The company converts the debt round first, allocating their options
shares using the number of shares outstanding. Then,
Option Pool 8,571 - 2% £599,973
To calculate the number of shares after conversion, we using the revised number of shares outstanding, they
Convertible
allocate the new investor their shares, based on the amount 21,000 - 4% £1,470,007
need to find the pre-money share price. This can be done note
by dividing the valuation cap by the total number of shares: they’ve invested. Series A - 223,469 41% £15,000,000
£15,000,000 / 285,713 = £52.50 per share. Total 520,998 - 100% £36,470,007
We already converted the debt note in a previous chapter,
Knowing the share price, we can now divide the investment which led us to the following cap table:
The Founder Friendly Approach
amount by the price per share: £1,050,280.75/ £52.50 =
20,005 shares after conversion Ordinary
Shareholder % Ownership £ Value The company allocates both the convertible debt and the
shares
new investor shares based on the same amount of shares
Ordinary Founders 200,000 65% £3,500,007
Shareholder
shares
% Ownership £ Value outstanding. To calculate the allocations through this
Seed Investor 57,142 19% £999,987
method we will use the cap table pre-note-conversion.
Founders 200,000 70% £3,500,007 Employees vested
20,000 7% £350,000
options
Seed Investor 57,142 20% £999,987
Option Pool 8,571 3% £149,993 Shareholder Ordinary A % Ownership £ Value
Employees vested
20,000 7% £350,000
options Convertible note 20,005 7% £1,050,281 Founders 200,000 70% £3,500,007
Option Pool 8,571 3% £149,993 Total 305,718 N/A £6,050,268 Seed Investor 57,142 20% £999,987
Convertible note 20,005 0% £1,050,281
Employees vested
20,000 7% £350,000
Total 305,718 100% £6,050,268 The new investment of £15,000,000 at £20,000,0000 pre- options
money will result in: pre-money valuation £20,0000,000 / Option Pool 8,571 3% £149,993
outstanding number of shares 305,718 = £65.21 per share.
Convertible Note Shuffle Convertible note 0 0% 1,050,280.75

The conversion of the note results in a lower price per Total 285,713 100% £4,999,987
We previously explained the option pool shuffle. “Convertible share than if the note had not been converted. Now the Total 520,998 100% £36,470,007
debt shuffle” is a similar phenomenon which can appear in £15M investment is calculated as £15M / £65.21 = 223,469
relation to the conversion of convertible notes. In short, the new shares. The new investment of £15,000,000 at £20,000,0000 pre-
convertible debt shuffle impacts the shares allocated to an money will result in: pre-money valuation of £20,0000,000 /
investor, when a convertible note conversion is triggered by This leads to the following ownership percentage for the outstanding number of shares 285,713 = £70.00 per share.
an investment. Like the option pool shuffle, there are two investor-friendly approach:

17
The Cap Table – From Company Formation to Exit

The Series A investor will convert using the following

formula: £15M / £70 = 214,285 new shares.
Series A Negotiations a look at outcomes in the event of selling the company at
different valuations:
With an understanding of the two methods of debt Exit: £0 - £15,000,000
We also have to convert the outstanding convertible note,
conversion and their impact on ownership, the founders
which is done by using the valuation cap share price of Prefer- %
evaluate the best approach for them. They decide to take Shareholder Ordinary Monies out
£54 and converting the outstanding debt. So £1,102,500 = ence A Ownership
the founder friendly approach and negotiate the deal from
20,400 new shares. Founders 200,000 - 38% £0
that standpoint. So the post-money cap table scenario sent
to the investors is: Seed Investor 57,142 - 11% £0
This leads to the following ownership percentage for the
founder friendly approach: Employees
20,000 - 4% £0
Prefer- % vested options
Shareholder Ordinary A £ Value
ence A Ownership
Option Pool 8,571 - 2% £0
Preference % Founders 200,000 - 38% £14,000,063
Shareholder Ordinary A £ Value
A Ownership Convertible 21,000 - 4% £0
Seed
Founders 200,000 - 38% £14,000,063 57,142 - 11% £3,999,958
Investor Series A - 214,285 41% £0 - £15M
Seed Investor 57,142 - 11% £3,999,958 Employees Total 520,998 - 100% -
vested 20,000 - 4% £1,400,006
Employees options
vested 20,000 - 4% £1,400,006 The worst case is the company going under and having to
options Option Pool 8,571 - 2% £599,973
liquidate. The VC’s will get all proceeds up to £15M. In this
Option Pool 8,571 - 2% £599,973 Convertible
21,000 - 4% £1,470,007 example everybody is losing, but the VC at least has some
note
Convertible
note
21,000 - 4% £1,470,007 Series A - 214,285 41% £15,000,000 downside protection. Nobody wants this.

Series A - 214,285 41% £15,000,000 Total 520,998 - 100% £36,470,007

Bad Case Scenario:
Total 520,998 - 100% £36,470,007
Preference shares are standard in VC deals. VC investing is
about beating the odds and finding the unique investments Exit: £0 - £35,000,000
To sum up: in the VC friendly approach the VC ultimately
received more shares; in the founder friendly approach, the that can pay back 10, 50, or 100 times the initial investment. %
Shareholder Ordinary Preference A Monies out
However, it’s also about protection against bad investment Ownership
VC gets fewer shares. So how does one decide which one to
choose? The answer is that it depends on negotiations and outcomes through provisions, such as liquidation Founders 200,000 - 38% £7,826,621

the investors approach. We’ve listed some different opinions preferences. Seed
57,142 - 11% £2,225,656
Investor
in the section below.
The investors are looking to commit £15 million in the Employees
vested 20,000 - 4% £432,662
company, and insist on a liquidation preference with 1x options
multiple and participation rights. This will ensure that the
Further reading on convertible debt Option Pool 8,571 - 2% £0
investor is paid the first £15 million in the event of exit or
Take a look at AVC’s explanation of the subject. Convertible 21,000 - 4% £1,168,788
winding up of the company.
Series A - 214,285 41% 23,346,273
They will also participate in monies paid out after the first Total 520,998 - 100% £35,000,000
£15 million on an equal basis with other investors. Let’s take
18
 The Cap Table – From Company Formation to Exit

Although this is a better situation than the worst case

scenario, it is still a suboptimal result for VCs - i.e. a company Exit: £0 - £350,000,000
Further reading on liquidation preferences:
where growth stagnates and the value does not increase
post-investment. In this case, the liquidation preference Shareholder
Preference %
Monies out
Brad Feld offers a good overview here .
Ordinary
A Ownership
and participation right secure a small upside for the VCs.
However, this simultaneously puts founders, employees and Founders 200,000 - 38% £128,975,574
For even more detail, you might find
early investors in a financially worse position than before the Christian Knott’s coverage of the topic
Seed
57,142 - 11% £36,676,784 useful too.
investment. Notice that the VC receives a disproportionate Investor
amount back compared to their ownership percentage. Also, Employees
the options granted to employees have the same ownership vested 20,000 - 4% £12,547,557
percentage as convertible note holders, yet receives under half options
the payout. This is because the options have to be exercised Option Pool 8,571 - 2% £0 Series B-G
first, which means the employees have to pay the strike price
Convertible 21,000 - 4% £19,260,567
before getting actual shares. In this case, for reasons of You have probably heard about unicorns, meaning startups
simplicity, the exercise price is set to £17.50 and corresponds Series A - 214,285 41% £152,539,517
with a valuation of more than $1 billion. At first these were few,
to the seed investment. Total 520,998 - 100% £350,000,000 but now they’ve increased in number significantly and several
Before the Series A investment, shareholders only had to share have become decacorns - companies with a valuation of more
the £20 million exit proceeds among founders, seed investors, In a best case scenario, the company meets the VC metrics than $10 billion.
and employees. Now, because the company has not increased and exits at 10x the last valuation. Everybody wins. The VC still
the value beyond the £35 million post-money valuations, takes out the first £15 million, but it’s negligible compared to In recent years, it has become increasingly normal for
the VCs take out the first £15 million corresponding to their the windfall that comes for everyone else too. companies to avoid IPO’s and stay in the private market
investment, and participate in the remaining £20 million on longer. There are many reasons for this, but it’s clear that high
equal terms with other shareholders. This has happened in In the simple scenarios presented here, the takeaway should regulation of listed companies and a robust private equity
reality to many companies and is one of the reasons why
be: liquidation preferences are a downside protection for market are contributing factors. Companies simply do not have
founders are often hesitant towards liquidation preferences.
Nobody is happy about this outcome - founders, employees, VCs, that gives them the first right to the capital paid out of to go through the hassle of public scrutiny to receive large
and early stage investors are disappointed that the cash value the company. Founders should be aware that the liquidation investments anymore. The result is the occurrence of Series
has dropped significantly since the last funding round. The preference will seriously hurt their pay-out if things do not work B-G funding rounds.
VCs are also unhappy, as they have invested in a low growth out as planned. But, if things do work out, everyone can reap
company, spent considerable time on it, and possibly lost out significant benefits. As an example, Uber is one of the companies that have
on other opportunities. operated in the private market until a Series G round, which
they secured in 2016 with Saudi Arabia’s Public Investment

Fund as lead investor. Even later, in 2017 they secured a $10B

Softbank investment, but without a Series label on it.

Just as the term Series A was used for the first time a
company issued preferred shares, the subsequent series
is similarly tagged with a letter to indicate new categories

19
The Cap Table – From Company Formation to Exit

of preferred shares with the later rounds having seniority

over the previous rounds. This means that new liquidation
preferences can have preference over a previously issued
preference. In other words, if a Series B preference share has
liquidity preference, its holders will receive their money first,
then the Series A investors, and finally ordinary shareholders.

Further reading on funding rounds:

Startups.com have written extensively
on this topic

20

The Exit
This is the dream scenario for a large number of startup
entrepreneurs, as well as what receives the majority of
press coverage in the field. The exit is the point at which all
shareholders - founders, investors, and employees - can
sell their shares to materialise their gains (or losses). For
venture-backed startups, there are two ways an exit can
happen: M&A or IPO.
M&A
This is by far the most frequent way for startups to exit. CB
Insights estimated that 97% of startup exits in 2016 where
though M&A . Also, 44% of startups exits are companies that
have not made it past their Series A.
When a company is sold as part of an M&A transaction it is
usually bought by a corporate, meaning a bigger industry
player or competitor. Mark Suster, managing partner at
Upfront Ventures has listed a number of reasons why a
corporate would buy a startup:
1. Talent hire ($1 million/developer as a rule of thumb —
location matters)
2. Product gap
3. Revenue driver
4. Strategic threat (avoid or delay disruption)
5. Defensive move (can’t afford a competitor to own it)
M&A transactions can be done with cash, stock of the
acquiring company, or a combination of both. Investors
will typically be bought out at this stage, but the founders’
journey often continues even after the exit. At times, the
founders and key employees will be part of the deal, having
to agree to a lock-up period with the acquirer in which
they will continue working for the company for a specific
The Cap Table – From Company Formation to Exit
duration of time. This is put in place from the acquirers’
side, to ensure a smooth integration of the companies and
that the acquired team will continue to bring value after
the transaction .
IPO
IPO stands for ‘Initial Public Offering’, and refers to the first
time the company will offer shares to the public by listing on
a stock exchange. A company can IPO as part of a funding
strategy and seek to raise capital this way. Companies such
as Tesla, Facebook and Uber all raised money when listing
on the exchange. Others, like Spotify , listed on the stock
exchange as a direct listing without raising any money, but
with liquidity for shareholders being their sole motivation.
This is an unconventional method, but Spotify might have
started a trend that other tech companies will follow.
As we saw in the stats from CB Insights, only 3% of exits
happen this way and the number of IPOs has declined
steadily for the last 30 years. So chances are slim that a
company will make it here and choose IPO.
For the venture backed companies that do chose an IPO,
there are several things to consider in preparation for
the event.
First, the valuation game: how can the company achieve a
high, yet reasonable, listing price? An interesting example of
this has been Uber versus Lyft, both set to IPO in 2019 with
comparable business models. The first to IPO could set a
21
The Cap Table – From Company Formation to Exit
market expectation for the second listing. It’s basically the
company fighting to keep the expectations high and then
meet the markets expectations to secure the share price.
Second, founders and existing shareholders have to
consider a lock-up period (typically six months) where they
are not allowed to sell their shares. During this time they’ll
be at the mercy of the market and can only spectate as the
share price is going up and down. Often, if the company fails
to deliver on expectations the first two quarters, pre-IPO
shareholders will have seen their price go-down.
Thirdly, but most importantly: publicly listed companies
are subject to public and regulatory scrutiny. They have
to publish earnings and share their expectations on the
development of the business with investors as well as
competitors. As a result, the administrative burden of
choosing the IPO route becomes huge on any company. This
is arguably the single reason why many companies chose to
stay private for longer.
For a more detailed account of what to consider when doing
an IPO, you can get a legal perspective from international
law firm Fladgate LLP, experts in assisting companies in
raising new equity, by reading the three-part guide they
wrote for Capdesk readers.
A Likely (and Simplified)
Exit Scenario
The spirits are high in the company following its impressive
Series A round. The round has spun off a lot of positive
press. The improved recognition has helped the company
acquire more customers and attract employees. All things
are pointing in the right direction and the whispers around
22
the water cooler have started throwing around guesses dismantled and shut down. The negotiations in this phase
about when the company will reach unicorn status. can give the founders and employees a better position in
the new company after the acquisition. As the bidders tire
As the company continues to grow, corporations are starting out and conclude their bidding, the company evaluates
to notice customers using the new company’s services. the offers.
After a while, the CEO hears about a corporation following
the company and he arranges a meeting to find out what The best offer is made by the initially interested corporate,
their interest is. During the meeting, it becomes clear that offering £175 million for the company, and requiring the
the corporation has been looking at the company’s market founders to vest their shares for 4 years after the exit to
for a while, acknowledging that the service would be a secure the transition and integration of services. The vesting
good value addition to its existing offerings, but deeming is conditioned on the company achieving high revenue
the opportunity too small to act on. They explain that they targets and bringing the product to a new market. Founders
are impressed with the company’s approach to the market believe the plans are viable, but also know that they’ll will
and achievements so far, that they are not ready to act on be challenging to achieve. During the negotiation, founders
an acquisition at this moment, but could be interested in a get through that they will be paid 20% of the exit fee upfront,
future investment round. and vest the remaining sum later on. Let’s see how funds
are paid out to shareholders:
Walking away from the meeting, the CEO maintains the
impression that the corporate has intentions of buying Shareholder Ordinary
Preference %
Monies out
A Ownership
despite talking down their interest. After discussions with
the board and management team, the team decides to act Founders 200,000 - 38% £12,198,757
on the corporate interest by approaching other potential Seed Investor 57,142 - 11% £36,676,784
bidders - the corporates competitors. Convertible
21,000 - 4% £9,108,507
note
With this move, the company is following Mark Suster’s Series A - 214,285 41%% £80,043,736
advice we discussed in the M&A chapter, and assumes a Employees 27,500 - 6% £7,509,170
defensive stance rather than positioning itself as a revenue
Total 520,998 - 100% £175,000,000
driver. The leveraging power of this move lies in the fact that
it is more expensive for a corporate to lose market share to
a competitor than gaining a revenue from a startup in an
Most noticeable in the exit scenario is the founders slim
pay-out of £12 million compared to the investors pay-out
immature market.
due to the lockup provision. There is still £48,795,027 for
In the end, there are two potential buyers left and the the founders to earn, but the founders struggle is not over
company is now trying to get the highest price and the until the company has successfully integrated with the
best terms on the deal. Many entrepreneurs have sold to acquirer. Agreements like this can take several different
a corporate only to see their work buried in bureaucracy, forms, but is typically based on milestones, period of time or
a combination.

The pay-out to employees in this example is calculated on two
exercise values 20,000 options at £17.5 and 7,500 options at
£70.33. In other words, the employees will receive a payout
calculated on the basis of value of outstanding options -
exercise value:
(27,500 x £335.89) - (£17.5 x 20,000 + 7,500 x £70.33). As
we’ve shown in earlier examples, the exercise price reduce the
actual payout to employees.
The option pool shuffle. Remember the Seed Investor
receiving 7,142 shares more due to his understanding of the
option pool shuffle? At exit those shares are worth £2.4M.
What in the beginning seemed to be a negligible ownership
percentage ended up as a lot of money.
Finally the Series A VC is taking the largest payout of all
shareholders. They hold the most shares and have liquidation
preferences. Adding more categories of preferred shares
in a company will severely skew the payouts for existing
shareholders. Companies should be aware of this when raising
funds and run scenarios for how the investments will affect
payout at different exits.
The Cap Table – From Company Formation to Exit
Summary
In our discussion above, we introduced terms and concepts
related to companies cap tables and how decisions made
early on in a company’s life will affect its shareholders
later on. We covered some essential subjects, such as how
instruments such as convertible notes will affect your cap
table, what liquidation preferences mean for exit proceeds,
and how a company can take advantage of options or
warrants to accelerate its growth.
The company example we used is a simplification of how
companies organise their cap tables. As we saw, managing
a company’s equity capital However, the real business world
is complex and equity registers in fast growing companies
are constantly changing. Options are issued on a continuous
basis as employees keep joining the company, and lapse
when they leave again. It is often when these changes occur
that companies lose track of their registers, and why it can
be a good idea to switch from a cap table spreadsheet to an
online cap table.
23
The Cap Table – From Company Formation to Exit

Cap Tables
from Formation to Exit
Capdesk is a digital platform enabling businesses to save
thousands in legal and accounting fees, by managing cap
tables and employee share plans efficiently. Capdesk’s
vision is to empower private companies to share equity with
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companies like Nutmeg, Privitar, gohenry, and more than
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With offices in London and Copenhagen, Capdesk was founded

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For more information, visit www.capdesk.com

24