Kirkanson, Inc. (A): Deal Structure and Cap Tables

Abstract:     
This case study introduces students to the nuances of deal structuring between company founders and venture capital firms. Specifically, the learning objectives for the case exercise include the following: (1) apply the venture capital method to value entrepreneurial ventures and structure financing between entrepreneurial firms and venture capitalists; (2) use capitalization (cap) tables to understand the dilution effects of multiple rounds of venture financing; and (3) gain an appreciation for the importance of arriving at a realistic value estimate for the entrepreneurial firms that gives the firm and its founders the best chances of long-run success. A Teaching Note by the authors entitled, “A Teaching Note on Deal Structuring and the Use of Capitalization Tables” was written as a first reading to accompany the use of this case and is available at: http://ssrn.com/abstract=1823443.

Number of Pages in PDF File: 9

Keywords: Venture financing, deal structure, capitalization tables

JEL Classification: G19, G29, G39

working papers series