The mechanics,
explained once.
Equity, cap tables and the way a fund actually keeps its books — written plainly, with the arithmetic shown. Nothing here is a product pitch: it is the reference we wanted when we were learning this ourselves.
How a capital call is allocated across LPs
Pro rata by commitment, with the arithmetic shown: what call 3 of 6 at 12.5% means for a $120.0M fund, for one LP's notice, and for the last cent of rounding.
Read in full →What a 409A valuation actually is
A 409A is not what your company is worth. It is a defensible estimate of the fair market value of its common stock, produced so that option grants do not create a tax liability on the day they are issued.
Read →Pre-money vs post-money valuation
Pre-money is what the company is agreed to be worth before the new money lands. Post-money is that figure plus the new money. The gap between them is the round.
Read →How to read a cap table
A cap table answers one question — who owns what, and on what terms. Here is how to read one line by line, and the four places the number you are shown is not the number that matters.
Read →No guides yet.
We are writing them. In the meantime, is here.
The terms in term sheets and LP letters.
Short entries, one idea each, with a worked number wherever a number helps. The letters below are the ones with published entries.
The software that does this arithmetic for you.
Nothing published yet in a category? The blog has our writing in the meantime.