Financing Fundamentals: Plan Your Company’s Stock Financing Like a Pro!

All Companies Need to Get Funding in Order to Start & Grow

Your company is no exception. If you plan to raise money by selling shares of stock to investors, then it is important to understand how the proposed equity financing will affect your company’s equity capitalization table and resulting stock ownership after the financing is completed.

Numbers don’t lie, so we have prepared an Excel financing model for you to download below and use to plan your company’s upcoming equity financing.

Key financing fundamentals covered in the financing model include:

1. The existing fully-diluted capitalization of your company, plus related fully-diluted ownership percentages for the various items of the current equity capitalization;
2. A check to determine that your company has sufficient Authorized Shares to cover the issuance of shares of stock in the proposed financing;
3. The estimated “pre-money” valuation of your company, the estimated total investment and the resulting “post-money” valuation of your company;
4. Calculation of the number of shares of stock to be sold, and the related price per share of stock, in the financing;
5. The fully-diluted capitalization of your company after the proposed financing, plus related fully-diluted ownership percentages for the various items of the “post-money” equity capitalization; and
6. Resulting equity dilution resulting from the equity financing.

If you are going to raise money from investors, then you need to make the right financing decisions for you and your company.  This financing model will allow you to “test drive” various financing scenarios, so that you can analyze how the “pre-money” valuation and size of the financing round will affect your company’s equity capitalization table and your resulting stock ownership position.

Raise money like a pro by entering your name and email address below to access the financing model:

We want the financing model to help you raise money for your company, so please let us know if you have any questions (or comments to make the spreadsheet more useful for you and other entrepreneurs).