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A cap table (aka capitalization table) represents a breakdown of your shareholders’ holdings. When a company first starts out – everything is quite simple – there is usually one or two classes of shares and few shareholders. But quickly enough (let us hope), things get more complex: the company seeks to raise a seed round, and needs to calculate its pre-money and post-money valuations, in order to make a sensible offer to investors
Cap tables play a crucial role in creating wealth for entrepreneurs. You can build a great company worth millions, but if your cap table is a mess, you might encounter problems and disappointments when it’s time to cash out. Of course, as your company matures, the capitalization will increase in complexity with the addition of various preferred and convertible securities. If you don’t know how these instruments work, you might wake up one day and realize you are only entitled to 2% of the cash even though you own 10% of the company.
No Excel sheet has ever been able to capture all of your commitments, obligations, employment agreements and compensation packages as cap table does. Automatically updating your cap tables on an ongoing basis, it allows you to get an accurate snapshot of your company’s current holdings and do all the number crunching you need in order to make the most informed decisions.
Cap tables may seem like a simple document, but they are not. They are significant evidence of the company’s DNA, management style, and ultimately, its history and success rate. Cap tables document every transaction ever made with regard to stocks, options and other capital compensation components. Your cap table gives you a real snapshot of the decisions you have made along the way and your options management. It reflects the cost of those decisions and their outcome. Therefore, keeping real track of them is priceless.
This is where Cap.TAble comes in- an Equity Management Software of the Tel Aviv Stock Exchange. Cap.TAble automates and streamlines the entire tracking and updating process, producing up-to-date, clear and concise cap tables. This software as a service (SaaS) application is a state-of-the-art answer to the old ways of doing things. It automates option management from granting to vesting, and enables users to generate, share and circulate up-to-date automatically-generated cap tables in real time. TASE’s Cap.TAble also enables users to calculate distributions at any given date, run investment scenarios, compare term sheets, receive an accurate snapshot of their option pools, grant and sign options seamlessly – all at the push of a button, and understand the real meaning of any exit offer and scenario.
In short, in today’s fast paced capital market environment, Cap.TAble allows you to keep track of your company’s holdings in a seamless, highly reliable way. It thus frees you up to focus on what really counts and make the right informed decisions regarding financing, exits, and option plans; allowing you to take optimum care of your company, shareholders, employees and yourself.
Yes, you can now grant options automatically and calculate vesting dates easily. We hope yours will vest soon.
Written by: Lior Navon, Product Manager at TASE For Private Companies – Cap.TAble.
What gave you the idea to create RepnUp?
Today, many meaningful events in person’s life such as getting into college, getting a job, keeping a job and finding a life partner, are dependent on what they “look” like on social media. The idea to build Rep’nUp came from reading articles about college admission officers that review applicants’ social media profiles before extending admissions offers. The articles explained what types of content will lead students to get eliminated from the applicant pool. We thought that we can develop a service that will help applicants by detecting this types of content and allow them to deal with that before applying. When we solicit feedback from friends, they indicated that there are two bigger addressable markets for such service, such as users who are looking for jobs and people who engage in online dating.
What advice would you give someone who wants to make a social networking website?
Try to work from day one with multiple social media networks and not only one.
What do you spend all of your hard earned cash on?
We spend most of our budget on two fronts – R&D and M&S.
Do you think that entrepreneurialism is something that is in your blood? Or is it something that can be learned?
Most of my professional life I spent in startups. I co-founded two that were acquired by IBM and McAfee so I think it is in my blood.
Is there anyone that you look up to and model yourself on?
I look up to people like Brian Chesky, co-founder and CEO of AirBNB.com a company that created a market that was not there before and build a fast growing business around it.
What is the best advice you have ever been given?
Execution trump everything else. Eventually you’ll get a product that works more or less as you thought it would but it is all about getting to the market and succeeding in getting sales/users/partners.
What advice would you give to a Young Entrepreneur setting up their first business?
First, get a strong team around you. Investors invest mostly in teams and they are looking for an experienced and capable members.
What are your plans for the future?
We are growing at a fast rate and we need to make sure we continue to grow.
Find out more about RepnUp.
We are opening a new year , those who have not built a budget for 2014 , now is an excellent time to do so!
Here are our top ten rules of Brooks Keret to build a better budget :
1. It is desirable to build a monthly budget based on a quarterly period between one and three years of activity.
2. If you are building your company budget in Shekels, it is best to convert them by the average rate for the period prior to the construction budget to avoid a situation in which a change in the volatility of the exchange rate doesn’t have an impact on the extent of your expenses.
3 . We recommend that you classify the expenses and attribute them according to the company’s operating departments, which include all relevant costs for the departments’ activities.
4. While building the operating expenses , you must take into account all the expenses and distribute them according to categories, such as : insurance, professional expenses, travel, communications and more.
5 . When calculating salary costs , you should consider the overall employer costs, gross wages and social benefits, plus a certain percentage With respect to provisions for vacation and recreation .
6. You must take into account increases of investments in fixed assets, such as: moving offices, office improvements , electronic equipment, laboratory equipment , etc. All the above are on a cash basis.
7 . It is important to plan at least 5 % of operating expenses as unexpected expenses .
8. Assuming that this activity is distributed over several companies / projects, this should be addressed to the overall budget of the group.
9. It is customary to budget funds relative to the number of employees in the company, such as leasing expenses, welfare expenses, work stations, gifts for employees, salary related expenses and the like.
10. When you are building a budget it is important to take into account the opening balance of net cash operating costs, reserves, and capital costs .
The writer is Carmit Oron, VP of Brooks Keret.