Valuation Exercise - Building a Cap Table

    Buildin" rel="nofollow">ing a full cap table from a limited amount of in" rel="nofollow">information can seem dauntin" rel="nofollow">ing- But the process of buildin" rel="nofollow">ing a cap table is very similar to solvin" rel="nofollow">ing a SuDoku puzzle- You have a grid of data poin" rel="nofollow">ints (numbers) to flll in" rel="nofollow">in, and you are given a few numbers to start with- From the in" rel="nofollow">information you have, thin" rel="nofollow">ink about what data poin" rel="nofollow">int(s) you can flll in" rel="nofollow">in next- Contin" rel="nofollow">inue, fillin" rel="nofollow">ing in" rel="nofollow">in one box at a time until all boxes are full- Usin" rel="nofollow">ing the logic from the precedin" rel="nofollow">ing paragraph, develop a cap table on the followin" rel="nofollow">ing assumptions - A Series B in" rel="nofollow">investor will in" rel="nofollow">invest $5 million on a $20 million post-money valuation- Existin" rel="nofollow">ing founders & management have 15 million shares; Series A Investors have 10 million shares-What will the full cap table look like after the Series B in" rel="nofollow">investment? In developin" rel="nofollow">ing your cap table, use the followin" rel="nofollow">ing process: 1) Create a worksheet with the column headin" rel="nofollow">ings shown below and list all of the "players" down the left side, 2) enter all known in" rel="nofollow">information, 3) calculate ownership % for new in" rel="nofollow">investors, 4) allocate pre-money value to existin" rel="nofollow">ing in" rel="nofollow">investors, 5) calculate the price per share (if the price is not the same for all shareholders, somethin" rel="nofollow">ing is amiss), 6) calculate the number of shares for the new in" rel="nofollow">investor, 7) add the total shares for all in" rel="nofollow">investors, 8) calculate the ownership % for existin" rel="nofollow">ing in" rel="nofollow">investors- Be sure to show all your work to the extent possible to enable you to not be penalized for errors that may carry through the model-