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A simple cap table is useful and advantageous for:

Providing a complete assessment of your company. Through a simple cap table, you get to have a full-fledged overview of your company’s equity and related risks. Thus, you’ll have a better understanding of how much shares can be sold to interested external parties and/or for additional programs. At the same time, this will help you determine the price/price range of your shares. This is important because it will help you choose the optimal share price range for your specific needs. In other words, through this cap table you will not only get to know your company better but you also have a great tool in doing so.

Making an attractive investment strategy. With the help of a simple cap table, it is now easier than ever to identify attractive investment opportunities with limited risk. As a stock option trader or an equity investor, it is important to carefully determine your investing objectives and risk tolerance. For startups , if you don’t want to put up too much of cash, then it is best to stick to penny stocks or safe investments like treasury bonds. If you are more aggressive in putting your money into more risky bonds, then you may want to think about putting your money into bigger cap stocks. Thus, with startups of a simple cap table you get to choose which among these stock options would be best suited for you.

Determining the appropriate share type for your portfolio. To get the best out of a simple cap table you must first determine the appropriate share type for your portfolio. The table shows you how much cash you could potentially earn from each share in your portfolio divided by the total number of shares. For example, if you have five common stock shares and a dollar amount each, then you can calculate that you would earn two dollars per share using the above illustration. Now, if instead of five common stocks you want to invest ten shares, then you would multiply the amount by the number of shares and determine that you would still earn nine hundred dollars per share. Of course, this calculation is only applicable if you have already chosen a common stock as one of your preferred stock picks.

Determining the proper option pool size. One of the primary purposes of the simple cap table is to keep you from making mistakes when choosing which stocks to put your money in. Each round in the option pool goes to a certain Standard Deviation, otherwise known as the SDV, which is used as basis for determining which shares should stay in your portfolio and which should be moved to the bottom of the list. As you may have noticed, the SDV is calculated with each round going for a smaller value. Thus, calculating the correct SDV is a crucial process that you need to be familiar with.

You may also encounter other interesting pieces of information in your Simple Cap Table Template. For startups , there are numbers that show you how many times your selected shares should be owned during a given period. There are also percentages showing you how much ownership percentage you are to give to your chosen option. Some even include real time information about when the market is closed, just so you would know when to purchase or sell your shares for the day. startups advanced feature of a cap table template is the one that tells you the market depth for every security in the entire portfolio.

This feature enables you to properly diversify your portfolio, making sure that all of your money is not tied up in just a few common stocks. With the help of the cap table and the SDV formula, it would be easy for you to calculate what your portfolio value would actually be once you took all of these factors into consideration. Remember that the Standard deviation and the SDV are both considered to be relatively reliable, but they are not perfect. Using a cap table template will therefore only provide you with an idea on what your portfolio value would be without any of these factors included. Also, this will not be a very good guide if you are still undecided as to what your preferred stock option would be.

The bottom line is that there are many advantages of using cap tables, especially for investors who are new to the market scene. Simple Cap Tables can provide useful information for day traders and investors who want to diversify their portfolios. There is a lot of valuable information that can help investors make better decisions. If you are planning on learning more about waterfall analysis, then all you have to do is look for the relevant resources.