Définitions pour termes relatifs aux cap tables, levées de fonds et questions juridiques pour startups.

Anti-dilution provisions

Anti-dilution provisions protect investors in a “down-round” by adjusting the price at which preferred stock converts into common stock, otherwise the down-round would reduce the value of the preferred investors’ shares.

Cap table

A capitalization table is a list that determines how many shares investors received for their investment. It also provides the whole company’s percentages of ownership, equity dilution and value of equity in each round for founders, investors and other owners.

Classes (types) of shares

Common shares: A unit of equity ownership. The majority of the stock is issued in this form. Common shares come with voting rights (e.g. to appoint a board of directors) and have the lowest priority, if it comes to distributing proceeds between shareholders.

Non-voting common shares: The main difference is that these shares don’t get voting rights and consequently have limited information rights about the decisions made.

Super-voting common shares: These shares get multiple votes per share, often 10 times more, which allows founders to retain control of the company even after significant dilution. In the event of a distribution, they have the same priority as common shares. They are rarely used, companies with dual-class shares are, for example, Google and Facebook.

Options: Options give you the right (not obligation) to buy a specific number of shares in the future before the expiration date and at a fixed price (also called grant/exercise/strike price).

Preferred shares: In public markets, the preferred share is granted a preference when the company pays out dividends and is paid out before any dividend to common shares. In the private markets (VCs) preferred shares come with:

  • a right to return of capital, when it comes to a distribution event, or converting to common and participating equally with everyone else
  • a right to a board seat, financial controls, voting right
  • possibility of dividends

Participating preferred shares: Owners of these shares, in the event of a distribution, receive their money back AND then share equally with the other share types. This is called double dipping and is unfavorable to the other shareholders.

Multiple liquidation preferred shares: The investor with these shares gets a MULTIPLE of his investment back before anyone else gets any money out. (They can either participate with their common shares or invoke the liquidation preference, whichever results in a higher payout for them) Participating multiple liquidation preferred shares: The investor will get back a MULTIPLE of their investment AND additional proceeds in proportion to their ownership. Founders should avoid this.

Note: All of the above share classes can have dividends. Usually the dividend is not paid out, instead the value accrues and is added to the investment amount.

Warrants: Similar to options, warrants are a right to purchase shares (most often common shares) sometime in the future at a set price. The difference is that options have already been issued and are in a pool waiting to be exercised. Warrants on the other hand will be issued at the time of exercise and will dilute current shareholders. Warrants are usually given to investors to “sweeten the deal” and stock options are given to employees, as compensation. Warrants don’t have a vesting schedule as opposed to options.

Convertible loan

A convertible loan is a short-term debt that converts into equity. The investor provides a loan with interest, maturity date and the right to convert the loan into equity at some point in the future. Usually investors negotiate for a conversion discount or conversion cap and debt converts at the next financing round.


Dilution happens when a stockholder’s ownership percentage decreases because of an increase in outstanding shares. Investor A owns 100,00 shares out of total 1m shares (10%). If the company issues 1m more shares to new investors, investor A now owns the same amount of shares but smaller percentage (100,000 / 2,000,000=5%).


A dividend is a payment by a company to its shareholders. When a company earns a profit, the majority will be kept within the company, but the rest can be distributed to shareholders as a dividend. Startups usually don’t offer regular dividends because of insufficient funds.

Fully-diluted cap table

A fully-diluted cap table shows everything a cap table shows, all outstanding shares and additionally the employee stock pool and outstanding warrants.

How much is a share worth?

Shares have a nominal value and a market value:

  • The nominal value is also referred to as par value or face value. It’s usually 1 CHF/EUR/DOLLAR/POUND, and that’s the price of one share when it was issued.
  • The market value is determined when it’s sold/traded and it’s usually different from nominal value.
Liquidation preference

Liquidation preference determines how the proceeds will be distributed to stockholders if the company is liquidated or sold (usually a merger, acquisition but sometimes it includes other terms)

Liquidity Event

A liquidity event is a sale of the company or the majority of the company's assets. That can result in either investors or debt holders to receive cash from the company, either through acquisition, merger, IPO or a sale of assets resulting from bankruptcy. Clauses from the term sheet determine order and amount of payout.

Outstanding shares

Shares of common stock currently owned by founders and investors. Shares are outstanding if they were issued and are held by shareholders.

Vesting schedule

Is a schedule that determines when you’ll be fully vested aka acquire full ownership of certain assets (e.g. stock options). There are three basic types: immediate, cliff and graded.