Wall Street Prep
Demystifying VC Term Sheets & Cap Tables

Demystifying VC Term Sheets & Cap Tables

Understand the analysis that’s done and the jargon used by venture capital professionals in early-stage investing in this recording of a training delivered by Wall Street Prep to Venture Capital professionals. While no prior experience is required,  this course moves at a very fast pace.

Understand Venture Capital Valuation, Term Sheets and Cap Tables

How do venture capital (VC) professionals determine the size and ownership stake of their investments? How do they construct term sheets to optimize their chances of generating high investment returns? And how do they construct cap tables to address challenges including option pools, convertible debt and multiple investors?

The 2-hour course will demystify the analysis that’s done and the jargon that's used in early stage investing

What You'll Learn

Part 1: The VC Process and Term Sheet
  • The early stage investing landscape
  • A typical VC deal process and timeline
  • VC return economics – why they need to hit home runs
  • VC Valuation – back-solving into a pre-money / post-money valuation
  • Understanding VC term sheets
Part 2: VC Math and Cap Tables
  • Cap Table Math: Dilution and price per share after new round
  • Calculating Impact of Option Pool
  • Calculating Impact of Multiple Investors
  • Calculating impact of Convertible Debt
  • Constructing a Cap Table
  • Flow of Funds and Distribution Waterfall

Course Samples

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Term Sheets
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Warm Up: Option Pool
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Convertible Debt

Course Extras

  • Taught by bankers

    Our instructors are former investment bankers who give lessons real-world context by connecting it to their experience on the desk.

  • Used on the Street

    This is the same comprehensive course our corporate clients use to prepare their analysts and associates.

  • Macabacus Excel Plugin

    6-month free access to the full version of Macabacus — an all-in-one suite of time-saving tools designed for people who build financial models in Excel.

  • Free Unlimited Access to the WSP Support Center

    Receive answers to questions, free downloads, and more from our staff of experienced investment bankers

Prerequisites

This course does not assume a prior background in VC term sheets or cap tables. However, this course is taught at a fast pace and those who enroll should have an introductory knowledge of accounting (e.g. interaction of balance sheet, cash flow, and income statement) and proficiency in Excel. Students with no prior background in Accounting should enroll in the Accounting Crash Course. Students with limited experience using Excel should enroll in the Excel Crash Course.

Course Syllabus

The VC Process and Term Sheet
1 Venture Capital Term Sheet Intro 1:20
2 Example Deal 3:16
3 Sources of Capital 5:37
4 Stages of Capital 1:43
5 Process/Timeline 3:28
6 VC vs Entrepreneur 1:46
7 Law of Returns 2:42
8 Valuation Drivers 2:44
9 Exercise 1: Return Economics 7:35
10 Valuation 9:08
11 Exercise 2: Valuation Decisions 8:23
12 Term Sheets 25:07
13 Exercise 3: Term Sheet 5:23
VC Math and Cap Tables
14 VC Term Sheet Recap and Agenda 1:51
15 VC Cap Table Intro 4:25
16 Warm Up - Simple New Investment Calculations 5:59
17 Warm Up - Option Pool 6:53
18 The Impact of Multiple Investors 5:29
19 Convertible Debt 9:23
20 Waterfall Flow of Funds 12:10
21 Cap Table 1: New Investor + Options 11:53
22 Cap Table 2: 2nd Investor + Converts 9:23
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