Impact track:

Impact & Public Funding, Regulated Markets &

their stakeholders
Utilizing the Cap Table as a planning instrument – a concept

Gregor A. Erkel
28.11.22

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 Welcome

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 Cap Table – a definition
Key Functions

In many ways, the capitalization table is akin to the balance sheet in the sense that it
represents the company’s position as of a certain point in time. The balance sheet shows
the company’s assets and liabilities. The cap table shows the company’s ownership and
accompanying economic and voting rights. The cap table includes factors such as
shareholder information, ownership position, rights to purchase additional equity in the
future, vesting schedules, voting percentages and purchase price.
à https://techcrunch.com, 6-considerations-for-managing-your-cap-table/

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 Cap Table - getting started
… if this is your first startup:

1. Familiarize yourself with its basic elements and formats

2. Recognize the importance of executive alignment

3. Evaluate and implement tools to help you manage it

4. Determine and delegate ownership of the cap table

5. Decide how much information to share with investors

6. Choose how much to share with employees

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 Cap Table - Investor ready?
Why should you use your cap table as a planning tool?

In order to be ”Investor ready” a startup needs several things:

- Pitch deck (presentation)
- Business Plan (text)
- Business Case (numbers)
- Schedule (à what do you do next Monday & why)
Here’s the big challenge: how do you identify the most important and evaluation driving
activity?

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 Cap Table - Dynamic Elements
Strategic gaming – the elements “to play with”

- Funding requirements
- Number of shares to sell (à as few as possible)
- Share price (à as high as possible)
- Number of rounds until break-even (à simulate)
- Number of shares to remain with the founders (à +50%?)
- Potential KPIs to target, incl. resources required.

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 Cap Table - another view
Why is this future oriented concept useful?

• Company history until today AND the startups targeted future

• Static view, a record of what is AND a dynamic perspective of
how the future is planned and how to achieve this future.

Experience shows, that it is important to have a clear picture of your funding

requirements and your capabilities to keep your ownership strategy alive.

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 Cap Table - planning ahead
Get proactive with your cap table

Starting from the current ownership and evaluation of your company,

You need to plan the next (and following) investment round(s).
Create the future structure of the cap table the way you want it to develop:
- how much of your remaining shares are you willing to sell,
- at what evaluation – what would be your target share price / company evaluation

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 Cap Table - planning ahead
Get proactive with your cap table

Understand your investor

- what criteria (à type and volume of KPIs) do they expect you to deliver
- to agree on your desired evaluation.
Translate these findings
- into operable actions (à schedule) and
- monitor your progress achieving the required KPIs.

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 Cap Table - for example
Decisions startups faced

What is most/more important:

- Acquiring new users vs. converging users to customers – at what cost,
- Expanding the offering vs. increasing usage of existing features?
How much of it:
- Do you need 150 partners or will 15 deliver the required proof/value,
- Number of deals closed?
à What is the investors view / your industries typical unit economics?

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 Cap Table - for example
Play book for alternative scenarios

1. Business Case bottom line (Income – Cost) = amount of investment required over time
2. Current burn rate + development = when you need the next round (vary volume)
3. Amount you want to raise in the next round ./. by number of shares, you are willing to sell
(consider rounds until break-even) =
Company evaluation on which you must agree is set.
4. Given your available resources in between rounds,
which KPIs can you achieve to get to the targeted evaluation?
5. Vary the number and volume of rounds, shares, share price, potential KPIs …
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 Thank you!

Gregor A. Erkel
Managing Director

be ventures Berlin GmbH

Herwarthstrasse 12 12207 Berlin Germany
+49 160 897 4082 ge@beventures.berlin www.linkedin.com/in/gerkel

All content presented herein is for informational purposes only. Nothing should be construed as
legal advice. Transmission and receipt of this information is not intended to create, and does not
constitute, an attorney-client relationship. with be ventures Berlin GmbH.
Do not act upon any information presented without seeking professional counsel.

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