Capitalization Tables, Terms, and Acquisition Payouts

The ins and outs of a capitalization table can be a bit messy. In order to make this mess a bit more manageable, we are working on a teaching note that will offer a play-by-play construction of a capitalization table, across multiple rounds of funding and various sorts of preferred share terms.

In the meantime, we have developed a couple (hopefully) simple Google Sheets to highlight certain of the most common ins and outs. Via these Sheets, you can change the final Acquisition price of a venture to see the way in which Liquidation multiple and preferences (e.g., non-participating versus participating),  dividends, and other terms impact the payouts from that acquisition. Have fun!

This Sheet provides a capitalization table with payouts (opens in a new window/tab) for a venture under two different types of preferred share terms:

  • Non-Participating Liquidation Preference
  • Participating Liquidation Preference

This Sheet provides a capitalization table with acquisition payouts (opens in a new window/tab) for a venture that has multiple rounds of investment, and a mix of liquidation preferences:

  • Initial Founding of the venture, via common shares;
  • Seed round of funding, via common shares;
  • Series A round of funding, via non-participating preferred shares;
  • Series B round of funding, via full participating preferred shares.