This website has been designed and built to help you work through the venture capital financing process. While venture capital isn’t necessarily overly complicated, successive rounds of financing, the use of both equity and convertible debt, and features such as anti-dilution can make it tricky calculate share prices and to understand exactly who gets paid what on an exit. We’ve integrated the levers available to a venture capital investor in an easy to use web application, so that the user can model out various financing scenarios accurately and consistently. We've also recently added AI chat functionality, so you can access all your company's information and broader information on venture capital by simply asking a question. Our approach to this from the outset was such that if we couldn’t build this to be professional grade, it wasn’t worth building at all.
Interest and/or dividends are based on a 365-day year. For partial periods, the interest and/or dividends are pro-rated for the period.
On each financing round, we will calculate the number of options required to reach the specified postmoney option percentage of the overall capitalization. You can then allocate options with various strike prices, vesting schedules, expiration dates, etc. and in the money options will be exercised and paid out on exit. If no options are allocated, the entire option pool will be considered common shares for the purposes of exit calculations.
You can model out the effects of the three primary types of anti-dilution protection out there. Full ratchet anti-dilution protection effectively undoes the last round of finance and reprices that round at the current price, and broad-based and narrow-based weighted average anti-dilution protection are less punitive as they take into consideration the existing capitalization of the company. The effects of anti-dilution protection are seen as a multiplier on the affected shares, rather than the issuance of new shares, and these multipliers are included in the calculation of the share price in the “down round” (i.e. as if the shares are issued into the premoney). Invetics follows the methodology outlined here, and the broad-based weighted average calculation includes both allocated and unallocated options.
When an investment results in the issuance of a fraction of a share, the number of shares is rounded up to the nearest whole share. This may make it look as if your capitalization table is off by a share or two, but typically you would not issue investors a partial share.
Yes. On the bottom right of your company home page go to More -> Capitalization Edits. Here you can manually enter equity rounds and share prices, etc. and we will derive premoney values, as opposed to entering premoney values to derive share prices.
To accomplish this, you’ll likely want to refer to your first financing as an A1 or something similar. To do an extension that includes a different mix of investors or at a different price, simply set up your subsequent financing as an A2 that is pari passu to the A1 round and has the same share characteristics. Alternately, add a tranche to an existing financing and customize the amounts and dates for each investor.
At its core, a Simple Agreement for Future Equity (SAFE) is essentially a convertible debt instrument for financial modeling purposes, but without all the features associated with debt. For example, a SAFE typically will not have an expiration date or bear interest, but the principal amount will convert into equity at some point in the future, potentially at a discount to the next round, and this conversion may be capped at a specific valuation. To model a SAFE, simply add a debt financing with 0% interest and the features outlined in the deal. For more on the accounting treatment of SAFEs (i.e. equity vs. debt), this guide is excellent.