This best practice allows you to calculate the capitalization (cap table) of your company after several successive funding rounds with the possibility to include 1) SAFE (simple agreement for future equity) and SAFE conversion, 2) Pro rata rights given to SAFE holders 3) the creation of a Management pool option.
This model will allows you to assess and understand the dilutive impact of SAFE conversion and Stock Options conversion and of multiple rounds of fundraising.
This is a more advanced version of the previous Cap Table model that I have built. This version of the model allows you to compare 4 different structures :
In all these structures the Management Pool is created before SAFE conversion and before the new round of funding.
- In Case 1 SAFE are converted into equity before Seed round ( ie. New investors are not diluted)
- In Case 2 SAFE are converted at Seed round ( ie. New investors are diluted)
- Case 3 is an Hybrid solution where only discounted shares of SAFE holders convert at Seed round ( ie. "hybrid" solution)
- In Case 4, the Management pool dilutes SAFE shareholders and SAFE convert before Seed round ( ie. New investors are not diluted)
These 4 cases are real examples that I have encountered during real Seed round / Series A term sheet negotiations and I highly recommend you to assess these different structures to make sure you understand the dilutive implications and maximise your share value as an entrepreneur or as an investor.
The model also assumes that at time of exit all shares from the Management Option Pool have been allocated.
This model allows you to simulate
- 1 SAFE round,
- 1 Seed round with the creation of an option Management pool
- 1 Series A round
- 1 Series B round
For Seed, Series A and Series B rounds, you have the possibility to model both capital raise and shares bought out / sold between existing shareholders. The model ends with a recap of cash flow by shareholders and gives return on investment metrics (IRR and Investment Multiples)
All the input of the model are colored in grey. All the other cells not colored in grey are automatically calculated. "Check" cells throughout the model should all be equal to 0.
I have also included notes throughout the whole model where I thought useful to give indication / explanation to the user of the model.
Please note that you are purchasing a fully unlock version of the model and will be free to make all the changes you would like.