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Cap table spreadsheets are extremely useful for tracking investment activity in any company. This is usually reflected on cap tables on a separate tab in your spreadsheet which displays the current debt total as well as some type of fundamental interest calculation based on the cap size you selected. In recent times, investors have encountered many potential new startup candidates and recently hired employees who simply have no concept of what their overall equity is. This can cause many problems when it comes time to discuss an exit strategy with your most valued customers or clients.Most investors will prefer to have a good idea of their individual and institutional cap sizes prior to advising investors. Unfortunately, most fund managers have never had to deal with this situation so they don't understand how critical it is to provide good investor education. By providing them with a cap table spreadsheet, you can give them an idea of your firm's current funding levels and how it is currently being managed so they will be better able to advise you as needed.The first thing you should consider is how to present the cap table to your investor. Most investors want something more sophisticated than a simple cap table tracking the current and long term debts of the company. In fact, you should think about including some sort of rolling cash valuation on each sheet. These simple cap tables can be easily updated using any investment management software, and many firms are even offering a ready-made rollover method that allows an investor to sell their shares without needing to sell all of their existing shares first. For investors who do not wish to use this method, there are also investment managers available who may be willing to provide this type of advanced information to their clients.One of the options that many investors are now considering is raising money in a nontraditional capital raising. This method typically involves companies issuing preferred or common stock, which is less expensive than raising money in the conventional way, and allows you to have greater control over the decision making process. Some common types of nontraditional capital raising include an initial public offering (or IPO), a development company, venture capital, and a reverse merger or acquisition between two companies.Of course, in some cases, you will need to raise money from angel investors, or "private equity" investors, which does require a significant amount of trust in the company's management team. This form of capital raising is referred to as a "hand-out" or "contingent sale." Hand-out sales involve the sale of a portion of the company to a private investor for immediate cash. On the other hand, contingent sale and warrant sales refer to the company selling its shares to a third party on the basis of future payments based upon the value of the shares at a future date. In most cases, the value of the shares will be based upon their acquisition by the acquiring investor.There are a number of reasons why companies resort to fundraising and they range from wanting to preserve the existing relationship with their existing customers, to providing seed money to start up ventures, and to obtain working capital for later stages of growth and development. However, many entrepreneurs fail to realize that they can also use the equity of their firm to attract new partners, clients, and funding. The equity that your company creates through equity sales can be used as a source of referral fees and can help to attract new executives. For example, if you offer to sell 20% of your firm's equity to a private investor, you can expect to get that person as a partner. If you create an All Capped Staff Jobs program, you can use future equity sales from the startup to create annual funding for the business. This means that you will be able to pay for the payroll and other operating costs of your company while retaining a portion of the equity.When you use the cap tables to calculate the value of the equity you are offering to investors, you can compare it against similar businesses in the same sector. You can also compare the expected return on investment of the private funding that you are creating. This allows you to identify whether the proceeds of your investment will be directly used for your company or will go to other priorities. If the latter is the case, then it is an excellent option to pursue, because the cap table spreadsheet can tell you exactly how much you can expect to make in one year after you sell your shares in the startup.If you have decided to use equity financing, you must take into account the conversion fees that you will have to pay when you sell your shares in the startup to raise the funds. However, you can reduce these fees by offering convertible notes. Convertible notes allow you to convert your convertible note into shares of the startup at a future date at a much lower cost than it would be to raise the funds the traditional way. The Cap Table Spreadbook can provide you with information about convertible note conversions and can help you to determine whether a convertible note is right for your company.