Tue, 18 May 2021
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
It’s important for investors to see your cap table in its fully diluted form.
The total number of shares issued or outstanding will determine the value of each share from which the shareholder can determine their percent ownership.
For startups, issued shares and outstanding shares are the same thing.
Authorized shares do not apply.
In addition to the outstanding shares, you’ll need to add options, convertible notes, restricted stock, and warrants.
Options granted to employees must be counted.
You’ll need to include those that have been exercised and those that have not yet been exercised.
Some unexercised options may never turn into shares as the granted options expired unused.
Expired options unused will require an update to the cap table.
Next, you’ll need to convert the convertible notes into shares.
Conversion to equity happens either on a follow-on fundraise, or at the maturity of the note.
Here the convertible note will increase the number of shares on the cap table based on the investment and valuation cap of the note.
You’ll need to add restricted stock which is often used instead of options for its tax benefits.
Finally, you’ll need to add the warrants. These are options to buy stock at a specified price during a specified period.
Just like options, not all warrants may end up being used, but in a fully diluted cap table show them as if they were exercised.
Once the warrant expires unused, then it comes off the cap table.
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Music courtesy of Bensound
Tue, 18 May 2021
In this episode, Hall welcomes Tom Byrnes, Founder and CEO of ThreatSTOP.
Headquartered in Carlsbad, California, ThreatSTOP uses real-time curated threat intelligence to block threats at firewalls, routers and DNS servers, which isn’t new, but until now has required large security teams, expensive threat intel feeds, and significant manual effort. ThreatSTOP’s cloud platform uses security automation to make it possible for companies of any size to defend their networks with real-time threat intelligence.
ThreatSTOP’s world-class security team curates the latest threat information from more than 50 public and proprietary sources including trust groups and law enforcement, and dynamically updates your policy as the threat landscape changes.
Tom is a long-standing member of the global cybersecurity community, serving in the U.S. Army for 13 years and ultimately joining the seminal tactical networking group. In the private sector, Tom’s work started with designing large-scale global networks and providing technical advice and leadership for a number of successful startups that all resulted in successful acquisitions. Tom holds two patents in network security using DNS and is credited as the inventor on two additional patent applications. An active member of the IEEE, ISSA, and Infragard, Tom speaks regularly at conferences on the topic of security. Ever the adventurer, Tom is an off-road racing enthusiast and was part of the JCR/Honda team that won seven Baja 1000 races in a row from 2007 to 2014. When not on the road securing the world or seeking the unknown, he lives in North San Diego County with his wife, two sons, and their rescue dog.
Tom shares how and why ThreatSTOP was formed. He advises entrepreneurs and investors and shares how he sees the cybersecurity industry evolving.
Music courtesy of Bensound.