14.2 C
London
Saturday, September 18, 2021

Rwanda’s response to COVID-19 brings out the need to prepare and learn from practice

Wash your hands, wear your face mask and practice physical distancing. These COVID-19 safety measures by the World Health Organization (WHO) will probably go down in the World’s history as the most repeated and translated words of the year 2020.  Since December 2019, COVID-19 has imposed itself onto the World forcing everyone to rethink the…
More

    Latest Posts

    Daily Crunch: Apple, Google bow to Russian pressure

    Hello and welcome to Daily Crunch for Friday, September 17th! What a week, ya’ll. It is now just days before Disrupt, which means the TechCrunch hive is buzzing. I’ll leave it by noting that Reid Hoffman is coming, which is going to be a treat. See you next week! — Alex The TechCrunch Top 3…

    Longtime VC, and happy Miami transplant, David Blumberg has a new $225 million fund

    Blumberg Capital, founded in 1991 by investor David Blumberg, has just closed its fifth early-stage venture fund with $225 million, a vehicle that Blumberg says was oversubscribed — he planned to raise $200 million — and that has already been used to invest in 16 startups around the world (the firm has small offices in…

    Inside GitLab’s IPO filing

    Fast growth, sticky losses While the technology and business world worked towards the weekend, developer operations (DevOps) firm GitLab filed to go public. Before we get into our time off, we need to pause, digest the company’s S-1 filing, and come to some early conclusions. GitLab competes with GitHub, which Microsoft purchased for $7.5 billion…

    Cameo launches Cameo Calls, a service for fans to video chat with celebs

    If you really want to video chat tonight with William Hung of retro American Idol fame… got twenty bucks to spare? Yesterday, Cameo launched its Cameo Calls products, which lets fans video chat for up to 15 minutes one-on-one with their favorite influencers and celebrities. The talent sets the duration, time, and price of their…

    Introducing the Open Cap Table Coalition

    Aron Solomon, J.D., is the head of Strategy for Esquire Digital and the editor of Today’s Esquire. He has taught entrepreneurship at McGill University and the University of Pennsylvania, and was the founder of LegalX, a legal technology accelerator.

    More posts by this contributor

    On Tuesday, the Open Cap Table Coalition announced its launch through an inaugural Medium post. The goal of this project is to standardize startup capitalization table data as well as make it far more accessible, transparent and portable.

    For those unfamiliar with a cap table, it’s a list of who owns your company’s securities, which includes your company shares, options and more. A clear and simple cap table should quickly indicate who owns what and how much of it they own. For a variety of reasons (sometimes inexperience or bad advice) too many equity holders often find companies’ capitalization information to be opaque and not easily accessible.

    This is particularly important for the small percentage of startups that survive in the long term, as growth makes for far more complicated cap tables.

    A critical part of good startup hygiene is to always have a clean and updated cap table. Since there is no set format and cap tables are generally not out in the open, they are often siloed rather than collaborative.

    Cap tables are near and dear to me as someone who has advised hundreds of startups over the past two decades as the founder of an accelerator, a venture partner and a senior adviser at a government-funded startup launchpad. I have been on the shareholder side of the equation as well and can assure you that pretty much nothing destroys trust between shareholders and startups quicker than poor communication, especially around issues such as the current status of the cap table.

    A critical part of good startup hygiene is to always have a clean and updated cap table.

    I really like the idea of a cap table being an open corporate record, because the value proposition to the companies is clear. From the time a startup creates a cap table, it’s prone to inaccuracy, friction and mistakes. What this means in practice is that startups may spend money on cap-table-related issues that they should be spending on other things. From a legal process perspective, the law firm that is brought in to help with these issues has to deal with tedious back-end work, so the legal time isn’t high value for either the startup or the law firm.

    The value proposition for equity holders is equally clear. All equity holders have a general and legal interest in a company’s capitalization information. They have the right to this information, which they may need for a variety of reasons (including, if things ever get really bad, an aggrieved shareholder action). So making this information clear and easily accessible is a service to equity holders and can also encourage more investment, especially from less experienced investors.

    When I imagine what this project could become in the next couple of years, I think back to late 2013, when Y Combinator announced the SAFE (simple agreement for future equity). I think the SAFE is a good analogy here, as no one knew what it was and people wondered if this was a nice-to-have rather than a must-have for startups. But the end result was a dramatic improvement in the early-stage capital-raising process.

    While the coalition’s founders include Morgan Stanley’s Shareworks, LTSE Software and Carta, it’s also heavy on Big Law, with Cooley, Goodwin Procter, Wilson Sonsini Goodrich & Rosati, Orrick, Gunderson Dettmer, Latham & Watkins, and Fenwick & West rounding out the group of 10 founding members.

    So what’s the real motivation of seven law firms, which together saw revenue of over $10 billion in 2020 to collaborate on an open cap table product for startups? Deal flow.

    Big Law has been trying for a couple of decades to build relationships with startups at the stage where it makes no sense for a startup to be dealing with a massive and expensive law firm. Their efforts to build startup programs have often fallen short and received mixed reviews. They have also been far too heavy on the self-serve and too light on the “we’re going to give you our regular Big Law level of services at a small fraction of the costs just in case you make it big and can one day pay our regular fees.” So these firms are trying to separate themselves from the rest of the Big Law pack by building this entrepreneur-friendly tech.

    The coalition has already produced its initial version of the open cap table. The real question is whether this is going to be a big deal, as the SAFE was, or whether it’s going to be a vanity solution in search of a real problem. My best guess is that if this coalition gets all the relationships right, doesn’t get greedy and understands that there is a social good component at play here, this could be, reasonably quickly, as impactful as the SAFE was.

    Latest Posts

    Daily Crunch: Apple, Google bow to Russian pressure

    Hello and welcome to Daily Crunch for Friday, September 17th! What a week, ya’ll. It is now just days before Disrupt, which means the TechCrunch hive is buzzing. I’ll leave it by noting that Reid Hoffman is coming, which is going to be a treat. See you next week! — Alex The TechCrunch Top 3…

    Longtime VC, and happy Miami transplant, David Blumberg has a new $225 million fund

    Blumberg Capital, founded in 1991 by investor David Blumberg, has just closed its fifth early-stage venture fund with $225 million, a vehicle that Blumberg says was oversubscribed — he planned to raise $200 million — and that has already been used to invest in 16 startups around the world (the firm has small offices in…

    Inside GitLab’s IPO filing

    Fast growth, sticky losses While the technology and business world worked towards the weekend, developer operations (DevOps) firm GitLab filed to go public. Before we get into our time off, we need to pause, digest the company’s S-1 filing, and come to some early conclusions. GitLab competes with GitHub, which Microsoft purchased for $7.5 billion…

    Cameo launches Cameo Calls, a service for fans to video chat with celebs

    If you really want to video chat tonight with William Hung of retro American Idol fame… got twenty bucks to spare? Yesterday, Cameo launched its Cameo Calls products, which lets fans video chat for up to 15 minutes one-on-one with their favorite influencers and celebrities. The talent sets the duration, time, and price of their…

    Don't Miss

    My Word: The Gilboa prison escape doesn’t rock

    I don’t like violent movies in general but for two reasons I’m pleased I have seen The Shawshank Redemption. Firstly, it is a compelling and thought-provoking movie based on a Stephen King book and secondly, it would be hard to follow the references in the Israeli media in recent days without having seen the film.…

    Shabbat candle-lighting times for Israel and US

    See Shabbat times for your area. Shabbat candles (photo credit: ING IMAGE/ASAP) Friday, September 17, 202111 Tishrei, 5782New YorkLight Candles at: 6:46 p.m. cnxps.cmd.push(function () { cnxps({ playerId: '36af7c51-0caf-4741-9824-2c941fc6c17b' }).render('4c4d856e0e6f4e3d808bbc1715e132f6'); });if(window.location.pathname.indexOf("656089") != -1){document.getElementsByClassName("divConnatix")[0].style.display ="none";}else if(window.location.pathname.indexOf("/israel-news/") != -1){ document.getElementsByClassName("divConnatix")[0].style.display ="none"; var script = document.createElement('script'); script.src = 'https://player.anyclip.com/anyclip-widget/lre-widget/prod/v1/src/lre.js'; script.setAttribute('pubname','jpostcom'); script.setAttribute('widgetname','0011r00001lcD1i_12258'); document.getElementsByClassName('divAnyClip')[0].appendChild(script);}else if(window.location.pathname.indexOf("/health-and-wellness/") != -1){ document.getElementsByClassName("divConnatix")[0].style.display ="none"; var…

    Former neo-Nazi, son of Holocaust survivor share their journeys combating hate

    During the first week of his sabbatical year abroad in Ottawa, Canada in 1984, University of Haifa Prof. Gabriel Weimann watched the trial of Ernst Zündel from his television. After just arriving to spend the year learning about antisemitism in the media, Dr. Weimann recalled, he watched the then-Canadian resident with a strong German accent…

    Getting Americans out is ‘big victory’ for Afghans, Taliban leader tells Trey Yingst

    Anas Haqqani, a leader of one of the Taliban's most dangerous factions, the Haqqani Network — considered to be a ruthless arm of the Taliban that has been blamed for attacks in the country against coalition forces — is speaking out about the U.S. troop withdrawal from Afghanistan. On Thursday, Fox News correspondent Trey Yingst spoke…

    ‘Jeopardy!’ announces Mayim Bialik, Ken Jennings will split hosting duties for the year with no guest hosts

    "Jeopardy!" has abandoned its initial idea to return to a string of guest hosts in the wake of Mike Richards’ ousting, opting instead to let Mayim Bialik and Ken Jennings take over for the remainder of the year.Sony Pictures Television confirmed to Fox News that Bialik will host several weeks of shows starting Monday that…

    Stay in touch

    To be updated with all the latest news, offers and special announcements.

    × Share your content