In this episode, we talked about why and how you can manage the ownership of your company. We have Andy Choi, a former VC and current CEO at Quotabook to talk about how you can actively manage your Cap table.
Webcast Ep18 - Equity Matters: Why you need to keep track of your Cap table
Andy Choi Started his career as a software engineer, and has started to work as a VC in Korea. He could work with lots of founders in Korea and the US. He could get to know about different industries and learned about how the founders and VCs work together and manage their equity.
While doing that, he saw many inefficient processes managing the cap table even though there was some online software helping that. Also, people in Korea and many parts of Asia still tend to manage the cap table through excel sheets, and that’s how he started his business, Quotabook to try to change the habit of equity management systems to become more sophisticated and efficient.
What exactly is a Cap table?
Most of the people think that Cap table is a listing up who has how many shares. However, a well-managed cap table can be great to show you the overall status of the companies present and future. It has to be able to tell more about stakeholders, the terms following different types of issued shares, and from that, the potential shareholders should be included. This all can affect the future decisions of the company.
What are some important terms that you really need to keep track of that can be troublesome?
You need to keep track of things regarding ownership. It is very important to know that depending on the types of shares have been issued, and the terms and rights hooked up to those different type of shares, the worth and ownership can be different. For example, 50% of preferred shares might be worth more than the 50% of common shares.
Why excel sheet is not a good option to manage the cap table?
Excel sheet is not built for collaboration. It’s hard to keep the cap table up-to-date for all the stakeholders and make them to be able to access or automate the whole process. Also, the founders need to take charge to keep the numbers accurate.
You can contact to Andy Choi to ask more about managing cap table and equity. If you want to know more about the Quotabook, visit their website. https://quotabook.com/
We are also providing for the Lighthouse subscribers free basic of Quotabook.
Recommend to read - Noam Wasserman's "The founder’s dilemmas"