Cap Table and Exit Waterfall Tool
The base for creating pro forma cap tables and liquidation analyses for venture-funded businesses.
The Cap Table and Exit Waterfall Tool is a spreadsheet financial model template to create a capitalization table through multiple rounds of investments via equity, SAFEs, and convertible notes, and forecast how investment rounds impact ownership, dilution, valuations, and distribution of proceeds to entrepreneurs and investors through a detailed exit waterfall.
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“I continue to use and recommend the Cap Table + Round + Exit model + other tools that [Taylor] provides. Some are free, all are valuable. (Have paid ~$300 and saved so much time and money over years as a Founder CEO, Angel, VC)."
Jesse Robbins, Investor, Heavybit
Walkthrough
Highlights
The cap table and exit waterfall are intended to be instructional tools to analyze how raising investment capital impacts cap tables, ownership, and proceeds at exit to shareholders of a company. Use in Microsoft Excel or Google Sheets; all cells and formulas are unlocked for editing and transparency, add on or edit for your specific situation.
The base cap table is extendable to as many rounds as you need to model - simply highlight the columns for a full round's calcs and paste to the right - and the exit waterfall is similarly extendable.
Model new preferred equity raises, common stock issuances, transfers, and sales, anti-dilution protection, option pools, premoney and postmoney SAFEs, and convertible notes.
You may want to alter the model to fit your desired layout and formatting, or to modify it to fit your specific usecase, and that's great; I highly encourage you to learn how to build your own cap table (and exit waterfall) specific to your situation, and my goal for this template is for it to an educational tool, and not just an executional template. I have spent hundreds of hours working on the structure, design, and terminology used in the model based on using this tool with founders, investors, and lawyers, as well as teaching people the core concepts.
The base cap table and exit waterfall can also be used to scenario modeling future rounds and exit distributions to shareholders, and built to be easy to use from an export of a share register from any of the online cap table management platforms.
Documentation
Each sheet in the model is detailed below, with links to documentation as relevant.
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README
Contact into, overview on model. Safe to delete or hide. Details on the colors and formatting in the model at Model Formatting. -
License
Terms of use of the model. Safe to delete or hide. -
Example Cap Table
Core cap table example, used to model 1+ rounds of issuing equity to investors (new and proratas to existing investors), as well as converting premoney and postmoney SAFEs, convertible notes, issuing option pools, and more. Easy to use for proforma cap table analysis and scenario modeling for evaluating the impact of raising funding on ownership, dilution, and more.- Video: How to add in additional rounds
- Video: Modeling an equity round
- Video: Modeling convertibles
- Video: Modeling options
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Example Cap Table, with Anti Dilution
Core cap table example, adding prebuilt anti-dilution protection for preferred equity investors if the option is selected and if it is applicable based on new share prices. This handles ownership dilution and value dilution, and for situations where the investor is issued new shares as well as the conversion ratio is changed. In addition to the implementation options, the amount of anti-dilution protection can be calculated using full ratchet and weighted average (broad-based and narrow-based) anti-dilution protection, and this is calculated separately for each investor with anti-dilution protection.- Video: Modeling anti-dilution
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Example Cap Table, Issuing Equity
Example cap table, only modeling the issuance of an equity round- Video: Modeling an equity round
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Example Cap Table, Issuing Options
Example cap table, modeling the issuance of an equity round and an option pool- Video: Modeling options
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Example Cap Table, Converting SAFEs and Notes
Example cap table, modeling the issuance of an equity round and converting SAFEs and Convertible Notes- Video: Modeling convertibles
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Example Exit Waterfall
Core exit waterfall example (also called a liquidation waterfall or liquidation analysis), using a pre-distribution cap table and assumptions for exit prices to calculate equity distribution to each class of shareholder, using pari-passu or seniority by shareholder class, based on liquidation preferences, optional participation rights, optional dividends, option and warrant exercise based on strike prices, and more. There are two versions of this, one the base waterfall and another called Exit Waterfall, Extended that adds a couple more shareholder classes.- Video: Modeling exit waterfalls
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Example Exit Waterfall, Simple
The third exit waterfall sheet Exit Waterfall, Simple is a different way to create a waterfall that intentionally does not work for some terms of preferred investments and thus will not work for all cap tables, but is easier to adapt and use for the situations it is built to handle.What this sheet can do:- Easy to extend to many classes of preferred, common, options and warrants at different strike prices
- Nonparticipating preferred liquidation preferences
- Distributions to many classes of shares at different share prices
- Liquidation preference multiple not equal to 1 (input the amount of preferences, reflecting the multiple * amount invested)
- Preference stack of multiple classes of preferred senior to each other, and also classes pari-passu to each other (set the seniority for each row)
- Sub-classes of share classes to account for shares of a class given to investors at different share prices
- Participating preferred with a cap or full participating preferred liquidation preferences. (Only nonparticipating preferred is currently supported with this sheet, all options are covered by default in the standard Exit Waterfall sheet)
- Dividends on preferred investments (default option in standard Exit Waterfall sheet)
- Conversion ratio from Preferred to Common not equal to 1 (default option in standard Exit Waterfall sheet)
- Testing for unconverted convertibles to pay as debt or as equity (contact me for custom solutions for this)
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Resources
Links to other models and resources for modeling venture capital funds and investments, from around the web. Safe to delete or hide. -
Glossary
Glossary of key terminology in the model. Safe to delete or hide. -
Changelog
List of what has been changed in model versions. Safe to delete or hide, although I'd advise to hide (instead of delete) so can always check to see what model version you are using to compare to future changes.
More Tools for Modeling Cap Tables
I am a fan of Angelcalc for analyzing investment rounds, which does a good job of allowing you to model different rounds, different types of investments (equity, convertible notes, premoney and postmoney SAFEs), and seeing how the cap table changes (ownership, dilution, and more) when new rounds happen.
Tactyc's Cap Table Calculator and Carta's Safe and Convertible Note Calculator are two other tools that will automatically take inputs around your cap table and convertible instruments and calculate how they convert in equity rounds.
I do not build my spreadsheet to be a tracking or cap table management tool, which is why it does not handle some specific functions to track options vesting and per-investor details; Alexander Jarvis provides a spreadsheet that is intended to be a cap table tracking tool with more features to support that usecase.
Once you're running a company, I highly suggest using an online cap table management platform, as it will provide more functionality and features to help make sure that all the details are correctly entered and maintained, which is one of the difficult things to handle with spreadsheets. A few to consider:
One-time donation or purchase and free access to updates
Model is one .xlsx Excel file or Google Sheets Workbook and is downloaded or accessed immediately. No macros or VBA used. Can be used in Excel, Google Docs, and many other spreadsheet programs. Email or book a call for support anytime. One time purchase, updates automatically distributed for free.
Download immediately and anytime.
You will have the option to download a Microsoft Excel .xlsx file and copy a Google Sheet file immediately after purchase or submission or your email, and anytime through the link in your email receipt, as well as by logging into my transaction provider at Gumroad and creating an account.
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Use in any recommended spreadsheet program.
Foresight's spreadsheet models can be used in both Excel and Google Sheets interchangeably; simply upload the Microsoft Excel model template from Foresight into Google Sheets, or download the Google Sheets to Excel, and everything will structurally work fine.
The models are originally built in Google Sheets, and the formatting is a bit better in Google Sheets; in Excel you may want to adjust the row spacing, fonts, and chart formatting to get the aesthetics you want.
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