Category: Dilution

  • 02 SAFEs and convertible notes

    TL;DR: If you’re thinking about a seed round involving SAFEs or convertible notes, you can use Excel to model their effect on your common stock. No matter how simple the documents may seem, never just “sign and close” without thinking through the effects of dilution. Download the open-source cap table and the example spreadsheet. *…

  • 03 First preferred equity financing and pool expansion

    TL;DR: Once you’re ready to raise a “real” equity round, such as Series Seed or Series A, use Excel to consider the effects of an option pool increase and the conversion of your SAFEs and convertible notes. Download the open-source cap table and the example spreadsheet. * * * As I discussed in the previous…

  • 06 Anti-dilution protection in a down round

    TL;DR: If a tight fundraising market might mean a down round for your startup, you might be in for a painful squeeze. But at least Excel can help sort out the potential dilution. Download the open-source cap table and the example spreadsheet. * * * Unfortunately, although your blockchain-based frozen-banana delivery app is crushing it,…