Common mistakes to avoid when managing a cap table

1 points by Akshaya_Sriram 10 hours ago

I’m currently working on the cap table for my early-stage startup and want to make sure we get it right from the start. What are some common mistakes or pitfalls to avoid when structuring and maintaining a cap table? Any tools or best practices that have worked well for others?

t_hinman_esq 8 hours ago

Unfortunately, there isn't an exact science to dilution/valuation in most cases, especially in the very early stages. Ultimately you need to sell as much/as little of the company as is required in order to secure the resources you need to be successful. Owning 100% of something that isn't particularly is always going to be worse than owning 1% of a billion dollar company.

That said, there are generally some norms around percentages for co-founders, and employee option grants can be benchmarked against comp data that you can find in Carta or Pave. And managing your cap table on Carta will help to make things easier in the future for investors/employees/the company to manage the cap table as it grows and changes.

Happy to chat more if that would be helpful!