Tue, 11 May 2021
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
As the startup grows it will add new entries to the cap table including new hires, option pools, advisors, as well as new investors.
Here’s a list of potential changes to the cap table to watch for:
New hires and options pools must be added.
Employees who leave before all options are vested will have unvested shares come off the cap table.
Advisors to whom you grant options or give warrants must be added.
Convertible notes are debt instruments but hold the potential of converting to equity so must be added.
New shares issued must be added to the cap table such as common stock.
If there’s a transfer of shares, those changes must be reflected in the cap table.
If you issue dividends you must track these as well.
You must also track liquidation preferences and the existence of anti-dilution clauses as these have a major impact on ownership.
To account for contingencies in the cap table you should run a “fully diluted” cap table.
This shows the impact of all options and warrants being exercised and all convertible notes converting to equity.
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Music courtesy of Bensound
Tue, 11 May 2021
In this episode, Hall welcomes Harlan T. Beverly, Ph.D., Ambassador and Advisor at Disruptive Labs, and author of “Lean Startings: A novel about creating a lean startup and life's interruptions” and “Navigating Your Way to Startup Success”.
Headquartered in Santa Monica, California, Disruptive Labs is a new startup studio making investments in startups by building MVPs and setting up automated sales in exchange for equity. Disruptive Labs helps founders that have proven customer need but cannot build an MVP without investment and cannot get investment without an MVP. They break the cycle by building MVP products for equity and stay on to help scale up sales through sales and marketing automation and partner with ambitious teams to turn complex problems into creative opportunities.
Harlan is a 4-time CEO and 3-time startup founder with a special focus on the consumer technology space. He is currently VP of Engineering at Beneplace, LLC and a lecturer at Texas State University. Harlan has 21 published technology patents and numerous scholarly articles as well as two published books. Previously, Harlan was a lecturer at The University of Texas at Austin where he taught entrepreneurship and helped run the Texas Venture Labs. Harlan specializes in fundraising and growth marketing for consumer, health, and technology companies. He has founded three B2C startups and sold two of them: Bigfoot Networks, Inc. and Karmaback, Inc. Harlan was also CEO of Key Ingredient, Inc which he sold in 2018. He is not actively investing, but has experience as an angel investor and a venture investor and is an active mentor at Capital Factory in Austin, TX. He received his B.S. in Electrical Engineering from Ohio Northern University, an M.B.A. from The University of Texas at Austin, and his Ph.D. in Business from Oklahoma State University.
Harlan discusses what’s next for Disruptive Labs, and speaks about crowdfunding platforms and the state of the investing industry. He shares with Hall the inspiration behind his latest book “Lean Startings: A novel about creating a lean startup and life's interruptions”, and what surprised him the most whilst writing it.
You can visit Harlan’s website at www.fastai.com and purchase his books at https://amzn.to/377aR3b. Harlan can be contacted via email at email@example.com, via LinkedIn at www.linkedin.com/in/hbombers/, and via Twitter at www.twitter.com/harlanbeverly.
Music courtesy of Bensound.