You have been approached by two cofounders of a company that is currently developing an App targeting
Question:
You have been approached by two cofounders of a company that is currently developing an App targeting personal investors. The two founders currently act as the CEO and COO of the company, both are experienced coders, and are struggling with the financial aspects of the startup. They have asked you to join the company as the CFO, and have offered you 33% of the company if you match the $20,000 they each plan to invest into the company’s initial equity. Though they have also offered you 10% equity with no investment, you believe in the idea and decide to take the equal-ownership deal and invest your own capital alongside the founders.
The company “WealthGro” will target young professionals who are experiencing discretionary income for the first time. The App allows them to “round up” all purchases they make on their account-linked Debit card to the closest $1, $5, or $10, and automatically invest the proceeds into exchange-traded funds mirroring the major stock and bond indexes.
Record the initial capitalization of the company on a capitalization table. Set the table up to include all important categories as the company grows, including this current initial capitalization plus important future categories such as step-up amount and %, Pre- and post-money by round, the book value of equity, and change in ownership % by round, etc.
Business Research Methods
ISBN: 978-0073521503
12th edition
Authors: Donald R. Cooper, Pamela S. Schindler