When it comes to raising capital, most of us focus on the numbers - the pre-money valuation, the size of the round, the size of the option pool - but we often don't understand how these numbers affect our dilution, especially when there is convertible debt with discounts and valuation caps, liquidation preferences, et al.
These concepts are hard to understand and entrepreneurs are often surprised when they see what their Term Sheets actually do to their ownership positions.
I created a spreadsheet to fix most of that. It includes the ability to:
- Create various funding rounds showing the effects of dilution (i.e., Series A, B, C).
- Enter Convertible Notes with conversion discounts and valuation caps.
- Create post-money option pools and pool refreshes.
- Show how much each Founder and each investor receives at different exit levels, factoring in liquidation preferences and participation.
Download the free Google Spreadsheet here. 1,300+ downloads since January 1, 2013.
I'm going to update it from time to time based on the feedback that I get from users so let me know how you like it and how you'd like to see it evolve over time.