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What happens if your cap table is public? I would imagine if your wooing investors, they will get to see the cap table + more even if they never invest. And V

What happens if your cap table is public? I would imagine if your wooing investors, they will get to see the cap table + more even if they never invest. And VCs talk to each other, so they can probably find out if curious from other VCs. Why all the secrecy?

jiveturkey 8y ago
I've only ever heard of one company with a public cap table. After a bit of googling, I found them again: https://open.buffer.com/buffer-open-equity-formula/ https://open.buffer.com/buffer-open-equity-formula/ . EDIT: lol the same link is in TFA. The problem with a public cap table is that it amounts to a public salary database. Usually companies (and employees) don't want everyone to publicly know everyone else's salary. When people do jobs you don't understand (like marketing, for the tech crowd here), or are perceived as underperforming, removing all doubt about their compensation breeds contempt. Anyway, even buffer doesn't publish enough information as they don't publish the "preference stack". Whether by design or an oversight is hard to say. And you can't really publish it as it will lead to difficulty recruiting as candidates get soured by the prospect that investor's real equity is better than their sweat equity. Sure, VCs talk but (speaking as a not-VC) I doubt they are going to share cap tables and such. They are busy people. If you, as a VC, care, talk to the company yourself. Even if they would share peer-to-peer, you are not a VC so you are not going to be privy to this VC-public info.
- woolvalley 8y ago
  I think not revealing individual employees stocks is probably fine with most employees if the company doesn't have public salaries. You would put that in a summary 'employee stock' category in the cap table. "difficulty recruiting as candidates get soured by the prospect that investor's real equity is better than their sweat equity." So basically looking for useful idiots as they really realize that the startup is definitely not a good deal? They are investors after all, but investors without full disclosures.
- vkou 8y ago
  > Usually companies (and employees) don't want everyone to publicly know everyone else's salary. Actually, employees would love to know everyone else's salaries. This gives them a stronger negotiating position.

jiveturkey 8y ago

I've only ever heard of one company with a public cap table. After a bit of googling, I found them again: https://open.buffer.com/buffer-open-equity-formula/ https://open.buffer.com/buffer-open-equity-formula/ . EDIT: lol the same link is in TFA. The problem with a public cap table is that it amounts to a public salary database. Usually companies (and employees) don't want everyone to publicly know everyone else's salary. When people do jobs you don't understand (like marketing, for the tech crowd here), or are perceived as underperforming, removing all doubt about their compensation breeds contempt. Anyway, even buffer doesn't publish enough information as they don't publish the "preference stack". Whether by design or an oversight is hard to say. And you can't really publish it as it will lead to difficulty recruiting as candidates get soured by the prospect that investor's real equity is better than their sweat equity. Sure, VCs talk but (speaking as a not-VC) I doubt they are going to share cap tables and such. They are busy people. If you, as a VC, care, talk to the company yourself. Even if they would share peer-to-peer, you are not a VC so you are not going to be privy to this VC-public info.

woolvalley 8y ago
I think not revealing individual employees stocks is probably fine with most employees if the company doesn't have public salaries. You would put that in a summary 'employee stock' category in the cap table. "difficulty recruiting as candidates get soured by the prospect that investor's real equity is better than their sweat equity." So basically looking for useful idiots as they really realize that the startup is definitely not a good deal? They are investors after all, but investors without full disclosures.
vkou 8y ago
> Usually companies (and employees) don't want everyone to publicly know everyone else's salary. Actually, employees would love to know everyone else's salaries. This gives them a stronger negotiating position.