Author: James D. Price
Product Type: Note
Product #: 1-428-874
Publication Date:08/2009
Length: 10
Keywords: Strategic Management; Strategy; Management; Entrepreneurship; Startup; Venture Capital; Cap Table; Capitalization; Invest; Investor; Investment;
| Discipline: | Strategic Management
Entrepreneurship |
| Industry: | Not Specified |
| Region: | Not Specified |
| Topic: | Entrepreneurship
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As entrepreneurs map out the future of a startup business, just as important as preparing financial forecasts is the preparation of capital forecasts: that is, thinking through how much money you’ll need to raise, and when, in order to grow the business to the point where it’s cash-positive and self-sustaining. This paper explains how to calculate the amount of startup capital required and when, and how to build a capitalization planning table. Readers learn how startup capital needs are often raised in multiple rounds and why, how and why those rounds are priced differently, and how shareholder dilution works. The cap planning table provides readers with a powerful scenario planning tool for trying out various money-raising, pricing, and shareholder dilution scenarios.
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