Scenario

Your cap table is cooked. The terms of your last capital raise weren’t great. Experienced investors have being telling you that you as the founder don’t own enough of your own company and an investor owns way too much (>20%). What do you do?

Solution

If your cap table is "cooked," meaning founder ownership is too low and one investor holds a disproportionate share, here’s what you can do:

1. Cap Table Audit: Review your current cap table’s equity splits and investor terms.
2. Benchmarks: Research and talk to some experienced founders, investors and capital raising experts to find out what the equity splits should be for a company like yours at the stage you are at.
3. Talk to Experienced Startup Lawyer: Have a quick chat with an experienced startup lawyer about your options and steps to remedy the situation. This is more common than you might think!
4. Negotiation: Approach key investors to renegotiate terms and try to find an agreement.
5. Don’t repeat the same mistake!

I strongly urge you not to try to do this on your own! It is complicated, time-consuming and uncomfortable AF!