Understanding Equity Ownership with Cap Tables
Learn how companies keep track of shareholder equity using cap tables. In this course we walk you through building a cap table for a startup, editing it for multiple rounds of financing and forecasting potential payout scenarios for all shareholders.
Meet Your Instructor
Cofounder & CPO, Pareto Labs
Nic Barnhart is a cofounder and Chief Product Officer at Pareto Labs. Prior to that he was in finance and analytics at ZipRecruiter and head of operations at a health tech startup acquired by Aetna. Earlier in his career, Nic started a business to teach kids basic finance concepts and founded a nonprofit organization to fund efforts to combat human trafficking. He earned a B.S. from the United States Air Force Academy and an MBA from The Wharton School at the University of Pennsylvania.
Understand what cap tables are and why they are important.
02 Cap Table Components
Learn cap table basics as we take you on a tour of a standard cap table.
03 Founders’ Round & Initial Employees
Begin building a cap table from scratch with the first step, establishing the founders’ equity.
04 Seed Round & Employee Option Pools
Learn how to edit the cap table when the first round of venture capital is raised.
05 Raising a “Series A” Round
Learn how to edit the cap table when adding a second round of venture capital financing and see how dilution impacts all existing shareholders.
06 Liquidation Analysis and Waterfall
Gain an understanding of the importance of liquidation preferences, which establishes which shareholders get paid out first when a company is sold, and learn how to model different potential payout scenarios for all shareholders.