{"id":124060,"date":"2020-03-31T00:00:00","date_gmt":"2020-03-30T23:00:00","guid":{"rendered":"https:\/\/gs:8890\/academy\/what-is-round-modelling\/"},"modified":"2020-03-31T00:00:00","modified_gmt":"2020-03-31T00:00:00","slug":"what-is-round-modelling","status":"publish","type":"post","link":"https:\/\/www.jpmorganworkplacesolutions.com\/hk\/insights\/what-is-round-modelling\/","title":{"rendered":"Round modelling – why it’s important"},"content":{"rendered":"

Your cap table is the most important part of your growing company.<\/em><\/p>\n

If you\u2019re a founder or CEO or even a CFO, you\u2019ve probably heard this a million times. (At least, hopefully, you have.) There\u2019s a reason that this is repeated like a mantra.<\/p>\n

It\u2019s simple, and it\u2019s true.<\/p>\n

It bears explaining this, because if you haven\u2019t heard this before, or even if you have but you\u2019re just not convinced, it\u2019s the first thing you need to understand. Many people might instinctively think\u00a0the idea <\/em>is most important. Others might think their\u00a0leadership abilities <\/em>are the real driver of their business. <\/em>And these are important parts, for sure, but they don’t compare to the cap table.<\/p>\n

So, before we get into the incredible things that you can do with a great cap table \u2013 first let\u2019s take a look at why cap tables are so important.<\/p>\n

Why are cap tables so important?<\/h2>\n

A cap table is a document that shows the owners and the breakdown of ownership in a company.<\/p>\n

An investor looks to make an investment in your company, in return for an ownership stake. Simply put, they give you money, and you give them shares.<\/p>\n

So, it\u2019s critically important for the investors to know how much those shares are worth. That depends on two things. How much the company is worth or will be worth. And how many shares have already been distributed, and the structure of the distribution.<\/p>\n

It\u2019s very hard to know how much a company will be worth \u2013 the world changes so quickly and is filled with plenty of great ideas. But with a single glance at a well-built cap table, they can see exactly what their investment is worth.<\/p>\n

If you have a great idea, but your cap table is poorly constructed or is incomprehensible then the investor is more than likely going to pass. Because if your cap table is poorly designed, there is a much greater chance that you have made a serious mistake, or missed something in your ownership. You can have the best idea in the world, but if an investor can’t trust your cap table (or even read it), then you won’t get funded.<\/p>\n

Investors also need to understand how diluted the company is. If they\u2019re receiving 10,000 shares, is that 10% of the company or .01%? It directly impacts their return on investment, and therefore their decision making.<\/p>\n

Now that you know why it\u2019s so important to have a great cap table, hopefully, you are ready to upgrade to a dynamic and comprehensive cap table. Once you do, you\u2019re ready to transform this essential tool into a valuable asset \u2013 one that can help you make the best decisions for your company.<\/p>\n

Round modelling<\/h2>\n

Imagine your fundraising round with investors went great. So great in fact that you have an incredible amount of term sheets, offers and terms of investment. The choices you make in investors can directly impact the sustainability and success of your company and even having a choice of two or three can be overwhelming.<\/p>\n

Our Cap Table round modelling feature can help facilitate your fundraising needs by letting you run, name, duplicate, and save multiple scenarios simultaneously. You can break up proposed investments among new and existing investors and use it to display the percentage changes in equity ownership across each shareholder line.\u00a0Basically it allows you to model potential scenarios.<\/p>\n

When it comes to making such major decisions you won\u2019t want to leave anything to chance, but you\u2019ll want to make the decision making process as quick and easy as possible too. With Global Shares\u2019 cap table management software you can make sure that your cap table is presentable, accurate and makes a great first impression to investors \u2013 and then when they\u2019re impressed that same software can be used to help you decide on choosing the best offer.<\/p>\n

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Your cap table is the most important part of your growing company. If you\u2019re a founder or CEO or even a CFO, you\u2019ve probably heard this a million times. (At least, hopefully, you have.) There\u2019s a reason that this is repeated like a mantra. It\u2019s simple, and it\u2019s true. It bears explaining this, because if […]<\/p>\n","protected":false},"author":3,"featured_media":124061,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[605,607],"tags":[654,666,674],"class_list":["post-124060","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cap-table-management-hk","category-ceos-founders-hk","tag-see-all-hk","tag-funding-round-hk","tag-series-a-hk"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/hk\/wp-json\/wp\/v2\/posts\/124060","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/hk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/hk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/hk\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/hk\/wp-json\/wp\/v2\/comments?post=124060"}],"version-history":[{"count":0,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/hk\/wp-json\/wp\/v2\/posts\/124060\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/hk\/wp-json\/wp\/v2\/media\/124061"}],"wp:attachment":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/hk\/wp-json\/wp\/v2\/media?parent=124060"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/hk\/wp-json\/wp\/v2\/categories?post=124060"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/hk\/wp-json\/wp\/v2\/tags?post=124060"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}