Answers to Frequently Asked Questions About Cap Tables

An article we liked from Thought Leader Yin Wu of Pulley:

We’ve built cap tables for 1000+ companies and 200+ YC companies.

Here are the top questions we get asked about equity👇

Pulley has built cap tables for 1000+ companies and 200+ YC companies, and have worked with everyone from seed stage startups to unicorns such as Clubhouse and Fast. Here are the top five question we get asked about equity and cap tables:

Fundraising

What terms should I watch out for in fundraising?

There are many. But if there’s one common term these days that catches most founders off guard later it’s “Pro-rata.” Pro-rata gives investors the right to invest in future rounds regardless of whether they’ve been helpful. Investors pitch pro-rata as a way to make it easier to raise your next round. The downside of pro-rata is it can lead to more dilution and can make it harder to fit in new investors. With large institutional investors you likely will not be able to negotiate this away. For seed investors or angel investors, you should not offer this right.

What is standard for dilution for the seed round? for the series A?

The amount of dilution depends on your industry and capital needs. We typically see...