Startups take on investors. The details of all that equity — who owns what and how much — often starts simply but gets much more complicated. To keep track, entrepreneurs use a capitalization table.
So when Tim Raybould, the CFO at Center City-based online ticketing star TicketLeap, started building a capitalization table management system, he was living the old adage that says if you want something done right you have to do it yourself. But beginning today, startups that want an easier way to manage their cap tables don’t have to figure it out themselves — they can use Capography.
“I’m the CFO of TicketLeap and I maintain our cap table. I wanted a better way to do it versus Excel,” said the Delaware native who now lives in the Philadelphia suburbs with his family. “I searched to see if it existed and didn’t find what I was looking for. So, after a little research, I decided to build it.”
Capography — which Raybould has already tested extensively at Ticketleap — is designed to enhance the cap table that all startups rely on to keep track of investors in their company. The service is intended to improve upon the usual Excel-based cap table in a variety of ways, but Raybould says the real value of Capography can be found in its two key features. This evening, Raybould will demo the product at Philly Tech Meetup.
First, startups can securely share their cap tables with potential investors without compromising private information by sending them out over email.
“By maintaining your cap table in Capography, you are no longer sending your cap table in Excel around to investors or potential investors,” Raybould said. “First, email is not that secure. Second, who knows who it gets forwarded to. With Capography, you have full control over who has access. You can’t un-send an email.”
But more importantly to Raybould, Capography can rapidly generate waterfall reports, complex calculations that should how how shares of a company should be paid out if it is sold. Capography allows users to set parameters — selling price and time of sale — to predict how shares might be split among all the investors in the cap table.
Says Raybould, it is difficult to generate waterfall reports on Excel so startups typically know very little about how shares of a company might be divided until the company is about to be sold.
“Each step along the way [start ups] negotiate terms with investors. It is really hard to see the impact of those terms without evaluating them at every step,” Raybould said. “This can instantly show you how this effects what you get in a sale. You are getting to see the information throughout the life of the company.”
Raybould showed Technically Philly how Capography generates a fictional waterfall report. In the simulation below, this reporter would make almost five million dollars if her fictional startup sold for $50 million next year. Wishful thinking. [No journalists’ ethics were compromised in the making of this demonstration.]
Raybould was inspired to build Capography because he was unsatisfied with the functionality of the cap table he created for TicketLeap in Excel. But to create an online cap table, he first had to learn how to code.
“My background is totally finance,” said Raybould, who worked for Pricewaterhouse Coopers before joining TicketLeap in 2009. “Basically I wanted to learn how to build something myself. I chose this as a project I could get my head around. I was trying to take a tool that I use every day – a cap table – and put it online.”
Using online Ruby on Rails tutorials, internet forums and skilled friends in the Philly tech community, Raybould said he built Capography in about nine months while working full-time at TicketLeap. The service will officially launch at the Philly Tech Meetup.
Subscriptions to Capography will be available for $199 per year, which, Raybould points out, is less than one hour of a lawyers’ time and far easier than trying to do it yourself.
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