Seed Stage spreadsheet Template

If you are an entrepreneur who wants to make use of Excel's spreadsheets to run a business, then you might as well begin by learning how to create a cap table spreadsheet. The cap table is simply an Excel table that lists the total equity that has been raised on a given funding source. The reverse side: who should you get to invest in your cap table, if you are raising capital? When contemplating investments, many of the biggest attention is on entrepreneurs pitching investors on capital.

While the ability to raise money via stock incentives can be extremely profitable, cap tables also offer the entrepreneur an opportunity to use the spreadsheet to determine how much he would need to dilute his investment. Dilution is a necessary part of any successful business and one that entrepreneurs should make use of all the time. A cap table spreadsheet is the ideal way to do this.

The cap table can also be used to determine what percentage of an initial investment is needed to cover the cost of starting up. This can be useful in getting new seed capital, as well. Seed capital is money that an angel investor provides as an owner in return for shares of the company's future profits. In the early days, when there was far less risk involved, a seed investment could be as high as 75% of a company's overall value.

The basic idea behind the cap table is that the higher the percentage that the founder needs to dilute his ownership, the more he can realistically raise from an angel investor. Using this type of calculation can allow you to work out how much money you will need. It can also show you how your costs for starting up, such as equipment and rental space, will fit into your plan. This is especially important if you are going to be using a standard stock instead of an preferred or common stock.

For most businesses, this type of calculation is very simple. A spreadsheet similar to those used by financial professionals such as bankers can be used for calculating the amount of equity needed to finance your business. These simple cap tables can be found free online by just searching the internet for "simple cap tables" or "financial cap tables." You will find that most people who are building their businesses use these types of spreadsheets.

However, you may find that you do not need to use these spreadsheets, especially if you are working with  startups . One thing to keep in mind is that you should calculate the price to earnings, or PEG, of your business many times before you actually file the paperwork with the SEC. By doing so, you can ensure that you never inflate the numbers when applying for the startup funding. If you accidentally inflate the numbers, you could be liable for a number of penalties. And if you were to inflate the price to earnings ratio, which is the key figure most VC funding firms use, then your company would not qualify for a Seed Stage Crunch or seed round at all.

Many  startups   fail because they have not gone through the proper filings with the SEC. Investors who are funding the company must first determine if it is eligible for a Seed Stage or Series A Funding round. After this is determined, then the investor must determine if the company has enough equity and creditworthy customers to launch it into a full-fledged Series B Funding round. These are all factors that must be considered by startup founders when determining if they have the necessary funding, or else they may risk having their business go nowhere.

Many  startups   fail to raise the capital that they need because they do not include one or more of these key pieces of information in their cap table. For example, only the company's revenue and expenses are shown on the income statement. If revenues fall due to poor seasonality, the funding may not be sufficient to keep the company afloat. This is why it is essential to include the balance sheet as well as company news releases with quarterly profits and losses. Having an accountant prepare this yearly financial document is not enough either. Investors must have the entrepreneur fill out a Seedstage Case Study form so that they can have a better understanding of their business' chances of going public.