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Cap tables are generally pretty closely-guarded, and most startups would not let you see the full cap table. That said, things you could ask for could be: the

Cap tables are generally pretty closely-guarded, and most startups would not let you see the full cap table. That said, things you could ask for could be: the number of fully-diluted shares (to calculate your ownership), whether they have any convertible notes and what the terms are, what their last valuation was (pre or post-money), how much runway they have at current burn, whether existing investors have any liquidity preference, etc. They may not answer all of those, but they should be able to give you enough to know where you stand.

sokoloff 4y ago
Agreed. You could also ask who their major investors are, but the exact and fully-enumerated cap table is, bluntly, none of your business. (Knowing what fraction of the company your proposed grant is, of course.)
908B64B197 4y ago
You can always ask. Their level of secrecy should tell you how serious they are. If they are too opaque, my advice would be to switch to a mostly cash comp.
- s1k3 4y ago
  The cap table can have sensitive information on it that might compromise employees and or investors or the founders themselves. I don’t think being secretive about the exact details of the cap table is indicative of anything. They should be able to tell you broadly how many shares there are and how valuable your equity grant is tho.
  - atdrummond 4y ago
    This is silly. You can literal export a high level view and change VC names to “VC #1” and employees to “Individual #1” and still easily relay the info that the employee needs. I don’t buy the privacy or security arguments.
    - mcculley 4y ago
      The degree of secrecy also tells you how much of an owner you would be.
      - surgical_fire 4y ago
        Honestly, it's easier to just avoid startups entirely. The vast majority of them fail anyway, and it's a long shot to ask me to trust them not to fuck me over with equity based compensation.
        actionfromafar 4y ago
        100% Working in a startup can easily turn into a rough ride - for not much benefit. So you might just as well start a company of your own.
        deleted 4y ago
        [deleted]
    - s1k3 4y ago
      The range in equity grants can still cause problems. The reality is exposing this information only works against you and limits your ability to negotiate with employees if you know it will be exposed to others. I disagree completely. That being said I believe company’s and founders should be as transparent as possible but sometimes that can come at a price and so it’s not ideal to be completely forthcoming.
    - sokoloff 4y ago
      It sounds like you agree with some degree of secrecy and privacy in sharing the details of the cap table with an outsider (the not-yet-employee).
  - Kiro 4y ago
    In my country cap tables are public information and I've never heard of a case where someone was compromised or otherwise hurt by this.
- timr 4y ago
  In fact, you should ask, especially if you think they'll say no. Don't be an ass, just ask the question professionally and politely, and be a little insistent about it (i.e. don't just roll over when they say no the first time. It's OK to ask again, and explain why it's important to you!) How an employer responds to a difficult question that they don't want to say "yes" to will tell you volumes about their skill and demeanor. And if they gladly answer this question, keep pushing until you find one they won't answer. If someone revokes your offer because you asked a question, you just dodged a HUGE bullet.
  - htag 4y ago
    > If someone revokes your offer because you asked a question, you just dodged a HUGE bullet. I was once in the compensation negotiation phase of an interview. I asked all the root comment questions about equity. They refused to answer any. I was insistent. Their tone changed. They pulled out of negotiation, citing "cultural fit" which I took to mean I was savvy enough to not be suckered.
Xcelerate 4y ago
> the number of fully-diluted shares (to calculate your ownership) This is something I've always been confused about. Suppose there are 100M fully diluted shares and you as an employee are granted (and vest) 20,000 shares, so you have 0.02% of the total shares. And suppose the company has a private post-money valuation of $10B and then IPOs to a stable $10B market cap. So you would think (0.02%)×($10B) = $2M payout. But! This doesn't include the fact that during an IPO, the company creates additional shares, right? And none of these new shares are sold directly to the public; they are first sold to banks or other prioritized buyers, and only then is the public able to purchase shares from anyone who owns them. Would this not decrease the employee payout? Assume the company creates 100M new shares for the IPO at a price of $50 per share. Now the banks pay the company (100M)×($50) = $5B for those shares, and then they sell them the next day on the open market. The final share price for the day would now have to be $10B/200M = $50 to have a market cap that is equivalent to the private valuation of $10B. But that means the employee's payout is actually $1M, not $2M. Is my understanding of this correct, or am I missing something? It seems like you can't just take your percentage of private shares and multiply it by the private valuation to estimate your IPO payout.
- paulddraper 4y ago
  The IPO is simply a funding round. Like any funding round, there is dilution. The value of your equity is premoney_percentage x premoney_valuation or postmoney_percentage x postmoney_valuation. As you say, don't make the mistake of premoney_percentage x postmoney_valuation.
- andruby 4y ago
  > the company has a private post-money valuation of $10B and then IPOs to a stable $10B market cap. If that’s the case, and they issue 100M new shares on IPO, then the IPO is effectively a serious “down round” that halves the value of all shareholders pre-IPO. More realistically would be that the post-money valuation after IPO is $20B or more.
- jpm_sd 4y ago
  Definitely not. There's also lock-up periods to consider. https://www.investopedia.com/terms/i/ipolockup.asp https://www.investopedia.com/terms/i/ipolockup.asp Not to mention, you probably don't hold shares, you hold options, unless you were clever/daring/solvent enough to exercise early. Substantial dollar amounts involved, and big tax implications. So really it's a question of what the share price is when you're eventually allowed to sell shares, minus the cost of options exercise.
voisin 4y ago
> Cap tables are generally pretty closely-guarded Why is this?
- sulam 4y ago
  Because it’s like salary transparency for investors. Not popular.

sokoloff 4y ago

Agreed. You could also ask who their major investors are, but the exact and fully-enumerated cap table is, bluntly, none of your business. (Knowing what fraction of the company your proposed grant is, of course.)

908B64B197 4y ago

You can always ask. Their level of secrecy should tell you how serious they are. If they are too opaque, my advice would be to switch to a mostly cash comp.

s1k3 4y ago
The cap table can have sensitive information on it that might compromise employees and or investors or the founders themselves. I don’t think being secretive about the exact details of the cap table is indicative of anything. They should be able to tell you broadly how many shares there are and how valuable your equity grant is tho.
- atdrummond 4y ago
  This is silly. You can literal export a high level view and change VC names to “VC #1” and employees to “Individual #1” and still easily relay the info that the employee needs. I don’t buy the privacy or security arguments.
  - mcculley 4y ago
    The degree of secrecy also tells you how much of an owner you would be.
    - surgical_fire 4y ago
      Honestly, it's easier to just avoid startups entirely. The vast majority of them fail anyway, and it's a long shot to ask me to trust them not to fuck me over with equity based compensation.
      - actionfromafar 4y ago
        100% Working in a startup can easily turn into a rough ride - for not much benefit. So you might just as well start a company of your own.
        deleted 4y ago
        [deleted]
  - s1k3 4y ago
    The range in equity grants can still cause problems. The reality is exposing this information only works against you and limits your ability to negotiate with employees if you know it will be exposed to others. I disagree completely. That being said I believe company’s and founders should be as transparent as possible but sometimes that can come at a price and so it’s not ideal to be completely forthcoming.
  - sokoloff 4y ago
    It sounds like you agree with some degree of secrecy and privacy in sharing the details of the cap table with an outsider (the not-yet-employee).
- Kiro 4y ago
  In my country cap tables are public information and I've never heard of a case where someone was compromised or otherwise hurt by this.
timr 4y ago
In fact, you should ask, especially if you think they'll say no. Don't be an ass, just ask the question professionally and politely, and be a little insistent about it (i.e. don't just roll over when they say no the first time. It's OK to ask again, and explain why it's important to you!) How an employer responds to a difficult question that they don't want to say "yes" to will tell you volumes about their skill and demeanor. And if they gladly answer this question, keep pushing until you find one they won't answer. If someone revokes your offer because you asked a question, you just dodged a HUGE bullet.
- htag 4y ago
  > If someone revokes your offer because you asked a question, you just dodged a HUGE bullet. I was once in the compensation negotiation phase of an interview. I asked all the root comment questions about equity. They refused to answer any. I was insistent. Their tone changed. They pulled out of negotiation, citing "cultural fit" which I took to mean I was savvy enough to not be suckered.

Xcelerate 4y ago

> the number of fully-diluted shares (to calculate your ownership) This is something I've always been confused about. Suppose there are 100M fully diluted shares and you as an employee are granted (and vest) 20,000 shares, so you have 0.02% of the total shares. And suppose the company has a private post-money valuation of $10B and then IPOs to a stable $10B market cap. So you would think (0.02%)×($10B) = $2M payout. But! This doesn't include the fact that during an IPO, the company creates additional shares, right? And none of these new shares are sold directly to the public; they are first sold to banks or other prioritized buyers, and only then is the public able to purchase shares from anyone who owns them. Would this not decrease the employee payout? Assume the company creates 100M new shares for the IPO at a price of $50 per share. Now the banks pay the company (100M)×($50) = $5B for those shares, and then they sell them the next day on the open market. The final share price for the day would now have to be $10B/200M = $50 to have a market cap that is equivalent to the private valuation of $10B. But that means the employee's payout is actually $1M, not $2M. Is my understanding of this correct, or am I missing something? It seems like you can't just take your percentage of private shares and multiply it by the private valuation to estimate your IPO payout.

paulddraper 4y ago
The IPO is simply a funding round. Like any funding round, there is dilution. The value of your equity is premoney_percentage x premoney_valuation or postmoney_percentage x postmoney_valuation. As you say, don't make the mistake of premoney_percentage x postmoney_valuation.
andruby 4y ago
> the company has a private post-money valuation of $10B and then IPOs to a stable $10B market cap. If that’s the case, and they issue 100M new shares on IPO, then the IPO is effectively a serious “down round” that halves the value of all shareholders pre-IPO. More realistically would be that the post-money valuation after IPO is $20B or more.
jpm_sd 4y ago
Definitely not. There's also lock-up periods to consider. https://www.investopedia.com/terms/i/ipolockup.asp https://www.investopedia.com/terms/i/ipolockup.asp Not to mention, you probably don't hold shares, you hold options, unless you were clever/daring/solvent enough to exercise early. Substantial dollar amounts involved, and big tax implications. So really it's a question of what the share price is when you're eventually allowed to sell shares, minus the cost of options exercise.

voisin 4y ago

> Cap tables are generally pretty closely-guarded Why is this?

sulam 4y ago
Because it’s like salary transparency for investors. Not popular.