Hello, I'm Dima, the founder of Pitchbob, one he co-pilot for entrepreneursand euquity.com- an EU-centered Net capital management platform. We help the founder create their startup narratives and materials, preparing them to attract investment and properly raise their lid table.

When building a start, the founders often focus on the development of the product, the collection of funds and the scaling of their business. However, a critical factor that can quietly undermine even the most promising venture is broken table. This term refers to a situation where a company's capital structure is misinformed, leaving the founder with a low dangerous percentage of ownership.

Let's consider what a broken lid table means, why it happens and how to avoid it as we emphasize the usual mistakes and active solutions.

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1. Excessive dilution of the founders of the founders

A CAP table, short for the capitalization chart, is a detailed division of who owns what percentage of your company. It is an essential document to understand the distribution of net capital between founders, investors, employees and other stakeholders. A broken lid chart occurs when the ownership of the founders falls to unstable levels, usually below 20-30% of the B or C series funding rounds.

For example, in phaseThe properties of founders that fall below 50% can signal the onset of dilution problems. According to Serie A, the founder of the founder below 40% is considered dangerous, and from series B or later, ownership below 20% is a clear sign of a broken lid table. These thresholds highlight when the founders lose significant control and impact, which can hinder future investors and limit the ability of a start to succeed in later funding rounds.

2. Demotivation of founders

A broken lid table is not just a problem of numbers-and has extensive consequences for your start. When the founders' ownership is very diluted, their motivation to advance the business decreases. MEANING equity shares are vital to ensure long -term engagement and strategic decision -making. Investors also seek the founders motivated by significant actions in their companies. If the founders' capital drops below 20-30%, it signals possible mismanagement and reduces confidence in the team's ability to stay fully invested in enterprises.

3. Investor hesitation

A broken lid table can scare new investors. They may hesitate to invest if they see that the existing net capital structure is unstable or highly diluted. By providing competitive capital to Attract and keep the high talent It also becomes challenging when the lid table is already stretched out thinner. This can severely affect your ability to build a strong, dedicated team. Moreover, early equilibrium investors can exercise disproportionate control, leading to governance problems and limiting your strategic flexibility.

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4. Inability to attract high talent

Some factors can lead to a broken table table. Acceptance of many funds in the early stages often results in excessive capital gifts before the company has a significant increase in rating. Poorly negotiated conditions with investors, such as high Liquidation preferences or anti-distribution clauses, can disproportionately damage the equality of the founders.

Failure to get its capital needs for future rounds and employee stock options can lead to heavy thinning over time. While having many co -founders can be an asset, capital allocation very detail can initially cause issues in later rounds of funding. An inappropriate or poorly planned pool of employee stocks leaves little space to stimulate employees effectively.

5. Problems of government

To avoid a broken lid chart, the founders must plan the distribution of net capital strategically. Working with financial advisers or lawyers to create a long -term capital allocation plan is essential. Reserving plenty of shares for future funding rounds and Employee stock options pools is essential. The founders should also avoid excessive growth in the early stages and focus on increasing the quantities associated with their current points and growth forecasts.

Talking wisely is just as important. Founders should be careful about the conditions of investors that can lead to excessive thinning and should seek professional advice to understand the implications of sheets in terms. Can even consider the beginnings of the early phase instruments as convertible notes or simple arrangements for future capital (safe) to postpone rating discussions to later stages, reducing immediate thinning.

6. The disproportionate impact of the Dead Capital

If a lid table is already broken, there are steps that can be taken to repair it. Capital restructuring is an approach, where the founders negotiate with existing investors to regulate the terms or to dilute interested parties. Deduction of future rounds and focus on collecting smaller quantities in later rounds of financing can also help limit further dilution. Allowing founders to sell some of their shares in secondary sales can provide liquidity and balance stimuli. Working with strategic investors that understand the need to correct the inequalities of the lid table and are ready to structure agreements accordingly is another applicable option.

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7. Logistics and inefficient challenges

One of the most common mistakes that begin to begin with is to give up a lot of equality too early. For example, if the first investors hold more than 50% capital in the early stages, it signals a loss of control for the founders. To address this, the founders can explore non -cash financing options, use convertible notes, or negotiate future stock reductions. Similarly, in deep technology spinoutsUniversities often receive ownership shares that exceed 25%, especially outside Europe. This level of ownership can limit growth potential. Founders must negotiate these actions and explore other forms of return to university, such as licensing agreements or revenue sharing models.

A broken table table can be the silent killer even of the most innovative beginnings. By maintaining the founders' sustainable ownership through each stage of funding, beginnings can ensure their long -term sustainability. Strategically planning, negotiating wisely and alert attitude are essential for capital protection and promotion of growth. Remember, your lids table is more than a Spreadsheet – is the foundation of your company's financial health and future potential.