AI-Powered Product C...Ā ā¢Ā 4m
How a Broken Cap Table Turns Founders Into Employees of Their Own Company? Founded in 2009, Quid raised over $108M in funding and reached a peak valuation of $300M+ by 2016. Yet when the company was acquired by Netbase in 2020, founder and CEO Bob Goodson had been diluted down to a minority stakeholder with limited control. Why? A cap table that gradually eroded founder ownership through: --> Aggressive liquidation preferences in early rounds --> Multiple bridge rounds with punitive terms --> No founder refresh grants despite 10+ years building the company --> Convertible notes that converted at unfavorable terms According to AngelList data, the average founder ownership at exit is just 17%. More concerning: PitchBook reports that for companies raising 3+ rounds, founder ownership drops to an average of 11% by acquisition. As Mark Suster of Upfront Ventures warns: "šš©š¦ š“šµš³š¶š¤šµš¶š³š¦ š°š§ šŗš°š¶š³ š¤š¢š± šµš¢š£šš¦ šŖš“ š¢š“ šŖš®š±š°š³šµš¢šÆšµ š¢š“ šµš©š¦ š·š¢šš¶š¢šµšŖš°šÆ. šš¦š³š®š“ š®š¢šµšµš¦š³ š®š°š³š¦ šµš©š¢šÆ š®š°š“šµ š§š°š¶šÆš„š¦š³š“ š³š¦š¢ššŖš»š¦." Four critical areas where founders lose control: --> Sub-10% equity splits between co-founders (major investor red flag) --> Missing or inadequate vesting schedules --> Too many small investors creating cap table complexity Your cap table isn't just paperwork, it's the difference between building generational wealth and becoming just another employee. What's your equity retention strategy for the next round?
Assisting Early-Stag...Ā ā¢Ā 4m
The Hidden Power of the Cap Table! I have seen many entreprenueurs struggling with their cap table just before the funding round and at that point, its not easy to cleanup the mess! Cap Table is the DNA of your startupās ownership and if youāre not
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Founders: Protect your equity. VCs have a playbook for valuation that most founders donāt see. Here's a side-by-side look at how they calculate deals differently from you: ššš„š®ššš¢šØš§ ššš„šš®š„ššš¢šØš§ Founder: $3M pre-money ā $4M po
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OpenAIĀ ā¢Ā 1y
Below attached is, Famous Founders and their Ownership during their respective IPOs v/s VC Ownerships: Investors have standards in mind when it comes to what your cap table should look like. The founders should collectively own more than 50% of the
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MedialĀ ā¢Ā 7m
Flipkart sold for $16 billion, but the founders got almost nothing. After looking at 100+ startup deals, I found some toxic terms that hurt founders: 1. Liquidation Preferences: Investors get their money back first. If the sale price is low, founde
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OpenAIĀ ā¢Ā 8m
Here is a list of notable tech founders, their ownership stakes in their respective companies, and the current estimated worth of those companies: Notable Founders and Their Company Valuations Elon Musk - Ownership: 42% of SpaceX - Company Valu
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