Ithaca VC: Practical Cap Table for Early Stage Entrepreneurs from an Academic Venture Capitalist

A friend of the Academic Entrepreneur has posted up a useful cap table on his blog. It has been posted below. First, some credit is in order.

Zachary Shulman, a lawyer by training, is a Senior Lecturer of Entrepreneurship at Cornell University’s Samuel Curtis Johnson Graduate School of Management and he also teaches at the Cornell Law School.  He is an academic entrepreneur, er, actually a member of a rare species more appropriately called “academic venture capitalists” himself. Zach is the Managing Director of a local Ithaca venture capital fund, the Cayuga Venture Fund, which he joined 10 years ago.  Wait, there is more.  He is also the Director of Entrepreneurship@Cornell as was announced last September.   Synergistically busy, if you will.  The Academic Entrepreneur has been fortunate to have known this individual  for 17 years and first took his “IPO” course as an MBA student. It was well regarded and spanned the law and business silos at the professional school level.  Fortunately for students on the old school on the hill, we see it is still offered and now called “Startup Legal Issues“.


Send me your cap table

As one might expect from an academic venture capitalist,  Zachary has posted a “Model Cap Table” for his students and entrepreneurs. Anyone that has ever pitched to a venture capitalist will tell you that they are always asking after these. Nascent entrepreneurs are usually not prepared with one at the time of asking, and often take months to do this “homework” that is assigned by the venture capitalist, along with other homework that has been given. This tool is thus useful for entrepreneurs who want to be well-prepared and speed the fundraising process. Please feel free to give Zachary or the Academic Entrpreneur feedback on the usefulness of this tool as well. He’s especially interested to know if it has transportability across geographies.

The Academic Entrepreneur thought it would be useful to link to a post from Brad Feld. Its entitled “Introducing the Cap Table in Hiring the CTO“.  A wealth of information here from Brad as well. For those of you who are entrepreneurs and aren’t familiar with Brad’s blog, I would highly recommend that you do so in the near future.  Joel on Software is another that you software and internet entrepreneurs will find a wealth of information through.


From IthacaVC


I thought it might be useful to post up a model cap table (Cap Table Model with Waterfall).  This cap table can be used by a pre-funded startup and then a financing can be layered in.  In other words, it shows both pre-money and post-money very clearly.  It is a simple model and NOT perfect, but it will work very well in most situations for you.  Here are things to note:

1.  Cells that are shaded yellow are input cells.  For example, cell E2 is the spot to put in the negotiated pre-money valuation.

2.  The model includes a simple waterfall analysis using both participating and non-participating preferred (see line 44 and then columns M and O).  The larger the preferred stock liquidation preference the larger the impact of participating preferred. Play with the investment numbers (increase them in column L).

3.  The option strike price in cell J1 is arbitrary.  I just set it at about 1/4th of the calculated Series A price.  But you should ask your accountants and lawyers about strike prices and Section 409A of the tax code.

4.  The green box at row 45 just provides a nice double check on post-money valuation calculations.

5.  Columns I and J are important as they show the % of preferred stock ownership compared only to preferred stock outstanding.  This is important as there are often charter or contractual provisions that require a preferred stock only vote.

6.  You really should try to focus on cell formulas.  They are simple, but critical to understanding how the cap table works and how valuable the cap table can be to your understanding of your stock holdings.

So….enjoy the model.  BTW, when I ask a company for its cap table (which I typically do as soon as I am actually interested in digging in further), I expect to get it in Excel (not PDF) and I expect to get it quickly.  If it takes a week to show up in my inbox I assume that the management team was not well prepared to pitch in the first place.”

Ask any questions in the comments.  Thanks.


Contact and About information from Cornell University’s Samuel Curtis Johnson Graduate School of Management :

Zachary J. Shulman
Senior Lecturer of Management
401B Sage Hall
Samuel Curtis Johnson Graduate School of Management
Cornell University
Ithaca, NY 14853-6201
Phone: 607-255-3012


Zach Shulman teaches courses on venture capital and law for high-growth businesses. Shulman is also currently a managing partner at Cayuga Venture Fund, a venture capital firm located in Ithaca, New York.

Before coming to Johnson in 2002, Shulman served as general counsel and chief investor relations officer of Spike Broadband Systems, where he was responsible for general oversight of Spike’s legal function, including negotiating and closing strategic and business relationships; strategizing, negotiating and closing fund-raising efforts; investor relations; and various human resource matters. While at Spike, Shulman negotiated and closed more $80 million in venture capital financing.

Prior to joining Spike, Shulman was an associate at the law firm of Harris Beach in Ithaca, New York. At Harris Beach, Shulman focused his practice on representing private and public corporations in a wide range of capacities, including equity financing via private placements and venture capital, bank financing, mergers and acquisitions, and the establishment of corporate governance policies, including advising boards of directors and executive management. Before Harris Beach, Shulman was an associate at Ropes & Gray in Boston, Massachusetts, where he represented predominantly public companies in equity and debt offerings, commercial lending, Securities and Exchange Commission compliance, mergers and acquisitions, and executive compensation matters. Shulman participates in the university-wide Entrepreneurship@Cornell (E@C) initiative and serves on numerous advisory boards for groups affiliated with Cornell and the local community. He earned a bachelor of science from the Cornell University School of Industrial and Labor Relations and graduated from Cornell University Law School, magna cum laude.”


Zach Schulman Linkedin


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