Harel Asaf

What is a Captable? A capitalization table is a table that lists a company's securities, including shares of common stock, preferred stock, bonds, and options. The table also lists the corresponding amount of capital that each security represents. The capitalization table is used to determine a company's financial structure and is an important tool for financial analysis. Your cap table should include the following information: - The names and ownership percentages of all equity holders - The type of each equity instrument (common stock, preferred stock, etc.) - The price per share of each equity instrument - The number of shares of each equity instrument outstanding - The total value of each equity instrument This information can be helpful in several ways. First, it can help you raise money by giving potential investors a clear picture of your company's ownership and value. Second, it can help you understand your company's value for tax purposes. Finally, it can help you make equity-based compensation decisions. Why Do Startups Need Cap Tables? One of the key reasons why startups need cap tables is to keep track of their dilution. Dilution occurs when a startup issues new equity, which can happen when they raise money from investors or when they give equity to employees as part of their compensation. By tracking their dilution, startups can make sure that they're not giving away too much of the company and that they're still incentivized to grow the business. A cap table can help prevent disputes among shareholders by providing a clear and concise record of who owns what. This is especially important if the company is acquired or goes public, as there will be a lot of money at stake. Captable and #due diligence When conducting due diligence on a potential investment, it is important to review the company's capitalization table. To investors, the captable is a key due diligence document providing a snapshot of a company's equity ownership. If the founders' stakes in a startup have been reduced significantly by previous financing rounds, it is likely a red flag. A sizable employee stock option pool will help to motivate employees and keep them committed to the company's success. With a clear understanding of the company's capitalization, decisions like whether to issue new shares or share options can be better analyzed and made in the best interest of the company's future. This information can be used to assess the riskiness of the investment, as well as the potential for future dilution of the investor's ownership stake. It is also important to review the terms of any outstanding options or warrants, as these can have a significant impact on the company's future capitalization.

Founders' Agreement: Essential for Protecting Your Interests If you're starting a company with one or more co-founders, it's important to have a founders' agreement in place. This legally binding contract sets forth the rights and responsibilities of the founders, and can help prevent future disagreements. A founders' agreement defines the roles and responsibilities of each founder, establishes ground rules for decision-making and conflict resolution, and outlines the process for admitting new members to the team. It also sets expectations for equity ownership and compensation, and documents the company's vision and mission. Having a founders' agreement in place can ensure that all founders are on the same page and save a lot of time and energy down the road. It also protects the interests of each founder and ensures that the company is run in a fair and orderly manner. Without a founders' agreement, the founding members of a company would have no legal protections and could be taken advantage of by the other members. While a founders' agreement is not required by law, it is highly recommended by lawyers and business experts. Any startup company should have a founders' agreement in place before moving forward with their business. Creating a Founders' Agreement Creating a founders' agreement may seem daunting, but it's essential to have it in place to avoid problems down the road. Here are some steps to follow: - Define the roles and responsibilities of each founder. - Outline the ownership stakes in the company. - Decide how decisions will be made and how disputes will be resolved. - Discuss what happens if a founder leaves the company. Once you have a draft of the agreement, it's important to have a lawyer review it to ensure that it's legally binding and that all of the key issues are addressed. In conclusion, a founders' agreement is an essential tool for protecting founders' interests and ensuring a startup company's success. It provides a clear set of rules and expectations, and can help prevent misunderstandings and disputes down the road. Make sure to consult with an attorney and have a founders' agreement in place before moving forward with your business. **** It's up to you whether you want to consult with a lawyer, but please consider discussing your founders' agreement with me. I can provide you and your co-founder with a questionnaire to help guide the conversation. #innovation #leadership ##lawandlegislation

An indemnification agreement is a contract in which one party agrees to protect the other party from any losses or damages that may arise in connection with a particular event or situation. In the context of a board of directors, an indemnification agreement can provide important protection for individual board members by agreeing to indemnify them for any losses or damages they may incur as a result of their actions or omissions while serving on the board. Indemnification agreements for board members typically specify the types of losses or damages that will be covered, as well as the specific circumstances under which the indemnification will apply. This can include losses or damages arising from legal proceedings, such as lawsuits or regulatory investigations, as well as other risks associated with serving on a board of directors. One common use of indemnification agreements for board members is to protect them from personal liability for actions taken on behalf of the company. Under corporate law, board members are generally not personally liable for the actions of the company, but they may still be held accountable for their own actions or omissions. An indemnification agreement can provide important protection for board members in these situations, by agreeing to cover any losses or damages they may incur as a result of their actions while serving on the board. Another common use of indemnification agreements for board members is to protect them from the costs associated with defending against legal proceedings. This can include the costs of hiring attorneys and other legal professionals, as well as any judgments or settlements that may be awarded against the board member. An indemnification agreement can provide important protection in these situations, by agreeing to cover these costs and expenses on behalf of the board member. Overall, indemnification agreements for board members can provide valuable protection for individuals serving on a board of directors. By agreeing to indemnify board members for any losses or damages they may incur as a result of their actions or omissions, the company can help to ensure that they are not left to bear the costs of potential risks or liabilities.