The Art of the Cap Table

Abstract

This article provides an overview of the impact of raising capital on the equity ownership structure of a biotechnology company. The equity ownership structure as captured in a table of capitalization determines how the fruits of success will be divided between founders, management and investors at an exit event such as an acquisition or initial public offering. The evolution of the Cap Table is captured and described through multiple financing events and scenarios and illustrates how value is allocated to the various parties involved in the transactions as the company grows and develops.