 of all the company’s shareholders and security holders and the value assigned to this equity. In case it is not clear, cap tables need to be comprehensive. They should include all elements of company stakeholders such as convertible debt, stock options and warrants in addition to common and preferred stock.
Typically built and stored in a spreadsheet, the cap table is one of the most critical documents maintained by the company. I can’t stress enough the importance of accuracy with this document. I highly recommend that an investor spend some time reviewing the company's cap table and making sure their ownership position is fairly represented. If it isn’t, you will need to reach out to the company and make sure any appropriate corrections are made in a timely fashion.
The table above highlights the most basic information in a cap table. For example, if you are Investor One, you own 500,000 shares of Series A Preferred stock. The company has the right to issue up to 4,000,000 shares including the option pool, so on a fully diluted basis (i.e. pretending all the options were granted), your holdings are equivalent to 12.5% of all the shares of the company.
To help you get started modeling a company’s cap table, we’ve provided two examples you can copy and experiment with. These spreadsheets will help you model single round and multi-round financings and include features such as options, liquidation preferences, participating preferred and the resulting waterfall analysis.
What are the key terms used in cap table analysis that every investor must understand?
If you want to be an effective investor, it’s important for you to be able to speak fluently the language found in a cap table. To get you up the curve faster, we’ll break the key terms used in cap tables into three categories: Valuations, Security Types and Share Counts.
Pre-Money Valuation - This is the valuation placed on the company prior to an investment made in the company. This valuation is typically set through a negotiation between the investors and company management. We discuss how this valuation is set in great detail in later articles.
Post-Money Valuation - This is the effective valuation of the company after an investment is made in the company. For example, if the pre-money valuation is $3M and the investors make a $1M investment, the post-money valuation is $4M (the $3M value plus the $1M in liquid cash now on the balance sheet).
Price per Share - This is a calculation based on taking the post-money valuation and dividing it by the number of fully diluted shares. If we have a $8M post-money valuation and we have 4 million shares, the price per share is $2.
Common Stock - The most basic form of equity ownership in a company is called common stock. Each share of common stock represents partial ownership of the company and gives the shareholder certain rights to company profits and voting on corporate matters, all as spelled out in the charter and the law of the state of incorporation.
Preferred Stock - A class or series of stock with special rights and privileges outlined in the company’s charter. By default, preferred stock is typically paid before common (but after debt) in a liquidation or sale situation.
Convertible Preferred Stock - This is preferred stock which has the option to convert to common stock (and be paid at the same time and rate as common) under a specified set of circumstances, including at the holder’s discretion.
Participating Preferred - This is a type of preferred stock which has the right to be paid some multiple of the original purchase price (e.g. 1X) and then also convert to common stock and “participate” in the distribution to common as if it had simply converted in the first place.
Non-participating Preferred - This is a type of preferred stock which has the right to be paid some multiple of the original purchase price (e.g. 1X) OR convert to common stock and “participate” in the distribution to common. The investor will choose the liquidity method that delivers the greatest financial return. This can also be referred to as just “preferred stock” but calling it “non-participating preferred” avoids all doubt about what kind it is.
Warrants - Warrants are nearly the same as options in that they are a contractual right to purchase a specified number of shares for a specified price at a specified future date or dates. Unlike stock options, warrants are typically one-offs and not issued under the terms of the stock option plan, though they may or may not use shares set aside in the option pool. Options are commonly used as compensation for employees and warrants tend to be used more frequently in business transaction contexts.
Restricted Stock - Restricted stock is increasingly used instead of options because of its greater potential tax efficiency. With options, you do not actually own the stock until vesting occurs and you exercise the stock option. Restricted shares are granted up front, but that up-front ownership is subject to restrictions which fall away over time. In other words, options have ownership rights which vest over time, restricted shares have ownership restrictions which lapse over time. The key difference is tax efficiency - restricted shares allow the recipient to make an election under Section 83(b) and pay a small amount of taxes up front in order to access the lower capital gains rate on any future profits.
Authorized Shares - all shares in a company must be properly authorized before they are issued (as in the context of a financing). Authorized shares refer to that number of shares which has been duly authorized by the company’s board for present or future issuance.
Outstanding Shares - This is the total number of shares which have actually been issued. It does not include options which have not been granted, nor does it include granted options which have not been exercised, since the shares are only issued upon exercise.
Fully Diluted Shares - This is a calculated number which models all granted options, restricted stock, warrants and often the remainder of the option pool itself into one single number of shares that represents the theoretical count if all outstanding contingencies were granted and exercised.
For more on understanding early stage capitalization tables, continue on to Part II of Who Owns What - Understanding Early Stage Capitalization Tables.<issue_start><issue_comment>Title: Use Github Actions to run tests
username_0: Just like https://github.com/duffelhq/paginator/pull/90, but instead of CircleCI it's better to use Github Actions.
Github Actions supports matrix builds (unlike Circle CI), and also allows to build really impressive CI/CD pipelines and PR/issues automatization. [Here](https://docs.github.com/en/actions/learn-github-actions/managing-complex-workflows) you can find more details about features.
Projects like [ecto](https://github.com/elixir-ecto/ecto/pull/3118) and [phoenix](https://github.com/phoenixframework/phoenix/pull/3557) are already moved to Github Actions.
<issue_comment>username_0: @username_1 @jbernardo95 @msz What do you think about this PR?
<issue_comment>username_1: I think one other thing which needs to be done before this can be merged is enabling GitHub Actions on this repository and ensuring that at least 2-3 runs of this workflow complete successfully.
<issue_comment>username_1: Note that CircleCI has [supported matrices in their builds](https://circleci.com/blog/circleci-matrix-jobs/) since April 2020. I only became aware of this myself late last year.
<issue_comment>username_0: Thank your for review!

I've added a link to a successfully executed workflow.The standard kilogram is a cylinder of platinum and iridium kept under three glass domes (left) accessible by three separate keys in Sevres, France. But there is a problem; it is losing mass–on a minute, atomic level–but enough to create alarm for the International Bureau of Weights and Measures. Speaking at Hillsdale College, NY Sun founder Seth Lipsky muses why we don’t just let the kg standard float like we do for that of the U.S. dollar.
The dollar was once on a gold and silver standard, but now it has a floating standard somewhat dependent on other currencies and regulated by the Federal Reserve in a way that seems incomprehensible and arbitrary to many.
But consider a standard more critical than that of weights or currency. What if, as many people insist, moral standards floated? On what basis could we claim we had been offended if the offender lived by different standards (a.k.a. “values”)? Even if courts decided the matter, upon whose standards would they (mere men in robes) base their decision? Should a popular majority determine morality? If so, 18th C. slavery in the Western world was moral–but we know that’s not true–but how? Can evolution account for morality? If it can, then morals are like instincts; they determine how we act, not how we ought to act. Pre-determined responses are not the same as morality, which requires choice.
Without a transcendent standard (beyond human “values”), morality is arbitrary–based on ever-changing consensus and/or pre-determined instincts. So if a transcendent moral standard exists, what must it look like? More next time.In a recent speech, President Trump proposed arming teachers in schools to protect students from potential mass shooters. This proposal has been met with mixed reactions and many questions about what it would