Do You Trust Your Cap Table Solution?

If you bought a calculator and the output of 5×5 returned 20 you’d probably return it. 

Similarly, with cap table software founders should expect the math to be accurate at all times, under even the most complex of scenarios.

We’ll look at 2 simple scenarios and compare the cap table outcomes on TWO12 compared with Captable.IO & Carta.

Scenario 1: Founders start with 8M fully diluted shares. The company first raises $500K on a Note at $5M cap (0% discount, 0% interest), followed by a priced Series-A at $20M pre-Money with a $5M new investment and a 20% post-round option pool. So, how much equity does a founder own after the Series-A round?

TLDR: We found errors with Captable.IO’s calculation with Notes

Results on captable.io:

Founders: 52%

Note Holder: 8%

Options: 20%

Series-A Investor: 20%

Results on TWO12:

Founders: 54.07%

Note Holder: 7.41%

Options: 20%

Series-A Investor: 18.52%

Scenario 2: Founders start with 8M fully diluted shares. The startup raises $150k on a Post-SAFE with 0% discount that gives the investor 7% preferred shares at a priced round (think YC accelerator). The startup raises a Series-A at $20M pre-money valuation.

TLDR: We found errors with Carta’s calculation with Post-SAFEs

Results on Carta:

Founders: 93%

Post-SAFE Holder: 6.5%

Results on TWO12:

Founders: 93%

Post-SAFE Holder: 7%

So… how do we know our math is correct?

For starters – it’s our job to know. We’ve gone through herculean efforts to ensure that our cap table math is accurate. Not an easy of a task given the vast complexity of cap tables.

And we’ll put our money where our mouth is.

Here’s our guarantee to you: IF YOU FIND A MISTAKE OF .5% OR GREATER IN OUR CAP TABLE MATH WE WILL GIVE YOU 5 YEARS OF OUR SOFTWARE FOR FREE.

Cap table is the epitome of years of hard work and sacrifice for startup founders. Founders win customers and grow their business by instilling trust in their product offerings. They shouldn’t expect less from their cap table solution provider.

Let TWO12 help you accurately track, model, and share your cap table with your investors, employees, law firm, and other service providers. Find us at https://two12.co or email us at hello@two12.co.

(PS > Founders also shouldn’t be forced to stare at user interface that make their eyes-bleed…. we hope you enjoy our clean, easy to understand, and story-driven user interface).