Most founders have little clue about how cap tables work when they start their first startup. Keeping accurate records of your cap table is essential for startup founders if they plan on raising capital from VCs or selling the company.
Startups typically issue common shares to founders, employees, advisors and consultants; they issue preferred shares to investors as part of venture financing rounds The preferred class of stock in a startup is typically subdivided into series, each representing a different round of financing, like Series A, Series B, and so on.
Just getting your startup incorporated? Find out how to price your company's common shares and learn how the fair market value (FMV) of common shares changes as your company grows.