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WHY CAP TABLE WITH MULTIPLE INVESTORS IS NOT AN ISSUE?

March 15, 2022

In early-stage fundraising, you are more likely to get multiple smaller checks than a bigger one from one single investor. This often results in a cap table with multiple investors. There is a myth this represents an issue for further round. We at FRC certainly don’t see it that way. Any decent CEO will put together a simple dashboard first for himself then as Information rights are pretty equal and standard to all investors it will just cost him one email address to add to keep your early-stage investors updated. As the company grows into subsequent rounds, it adds a little bit of work on the legal side to collect documentation but that is probably as bad as it will get. Lastly, as you move into series C, D, etc, the bigger investors will have an appetite to consolidate your cap table and are likely to propose to buy out early-stage investors anyway. So, if you put this in perspective of getting funded early in your journey,  it is probably worth it!

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