The mechanics,
explained once.
Equity, cap tables and the way a fund actually keeps its books — written plainly, with the arithmetic shown. Nothing here is a product pitch: it is the reference we wanted when we were learning this ourselves.
What a 409A valuation actually is
A 409A is not what your company is worth. It is a defensible estimate of the fair market value of its common stock, produced so that option grants do not create a tax liability on the day they are issued.
Read in full →Pre-money vs post-money valuation
Pre-money is what the company is agreed to be worth before the new money lands. Post-money is that figure plus the new money. The gap between them is the round.
Read →How to read a cap table
A cap table answers one question — who owns what, and on what terms. Here is how to read one line by line, and the four places the number you are shown is not the number that matters.
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