This course provides a basic overview of equity concepts in a start-up company, focusing on corporations, and in particular, technology corporations. 

We start with a brief overview of equity, including a discussion of ownership vs. control in a corporation.  From there, we will look at differences between common stock and preferred stock.  After that, we explore some of the rights to acquire equity, including stock options, warrants and convertible notes.  After that, we look at company rights to re-acquire its outstanding stock, including rights of repurchase and redemption rights.  Then we will look at rights that track to equity, but are not rights to acquire equity, such as phantom units and stock appreciation rights.

The course provides examples of authorizing common and preferred stock in the Charter, and the development of a capitalization table.  We will work through several examples of capitalization tables, incorporating common stock, stock options, preferred stock series, and warrants, and determine percent holdings by class, by outstanding stock, and by fully-diluted stock.

Course Series

This course is included in the following series:

10 CoursesFinance for Entrepreneurs

  1. Start-up Equity and Cap Table Basics
  2. Understanding Performance-Based Equity Awards
  3. Accounting 101: How To Do Basic Accounting In One Hour
  4. Learn Finance Principles in 1 Hour
  5. Financial Modeling Using Excel
  6. The Evolution of a Great Spreadsheet Report - How to Effectively Present Numbers in the Business World
  7. Creating a Winning Pitch for Venture Capital Investors
  8. Venture Capital Valuation Analysis Method
  9. Enterprise Risk Management 101
  10. The IPO Preparation Process - Preparing a Company to Access the Public Markets
Learning Objectives
  • Identify the differences between common and preferred stock.
  • Identify the different rights to acquire stock in a corporation.
  • Discover how to authorize stock in the Charter, and recognize how to determine the authorized amounts required.
  • Explore how to build a capitalization table and depict percent ownership.

 

 

Last updated/reviewed: August 6, 2023
90 Reviews (345 ratings)

Reviews

4
Member's Profile
Great slides and explanations provided. However, using exam questions which state "which is the best answer or most correct" to me was rather silly since it meant several answers could be correct with the instructor making the sole determination of which one she thought made the most sense. I don't agree with how the questions were presented in instances like this. This is the only course I have taken through Illumeo that I had to keep retaking in order to try and ascertain which answer she was looking for. Questions need to be a bit more black and white is what I guess I am saying.

5
Anonymous Author
This was a great intro course. I liked how high level it was for an intro course and that it covered the different cap table scenarios. It helped me better understand the various cap tables based on fully diluted, etc. Individuals who are new to stock compensation plans would benefit from this course the most.

5
Anonymous Author
A good beginning introduction to startup equity. Great for entrepreneurs, non-financial managers or those just starting out on their careers on the executive track. Also, if you're a service provider to startups, this course would help you to understand how startups are offering to compensate you.

4
Member's Profile
One of the review questions says that repurchase rights for service providers apply only to unvested shares. What is it called when the company has the right to repurchase all the shares (whether vested or unvested)? that sounds like a repurchase right as well.

5
Anonymous Author
This course was very informative. The flow of the presentation was easy to follow, and the examples provided great context to further explain the concepts. As someone new to working with start-ups, this was a great refresher course on equity.

5
Member's Profile
Thanks for putting the course today. It was very helpful in getting a better understanding, especially around how CS authorizations needed to be high enough to cover PS conversions. And appreciated the summary at the and called "Take Aways"

5
Member's Profile
I don't do much in this topic at work, so I appreciate the basic refresher. There are a lot of things to define and some math for calculating diluted shares etc. This is a good reminder about the ways equity acts in start-up scenarios.

5
Anonymous Author
This is the best CPE I've ever taken. In all my years in corporate accounting, no one ever has taken me through what all of the different investment vehicles are in a cap table. This really made a lot of sense to me!

4
Anonymous Author
Great intro that I would recommend to senior level staff on my team for a better understanding of equity. Builds the foundation that would help prepare the footnote schedules and MD&A for annual audited statements.

5
Anonymous Author
I really enjoyed taking this course, it did a great job explaining equity in start-ups and common stock and preferred stock. The fully-diluted tables are complex but super helpful see what it looks like.

5
Member's Profile
One of the best classes I have taken here so far. Susan condensed a lot of information down to exactly the take aways needed. She walks the viewer through sample cap tables as well.

5
Member's Profile
Important to know when dealing with start-ups as it's usually comprised of a small team, especially the accounting function which will need to handle all equity related transactions.

5
Member's Profile
All of the very important details and nomenclature were well explained. I was surprised how many of the important differences I did not know! Really good course. Thanks Susan !

4
Anonymous Author
The scenarios slides and presentations makes it easier to understand how stocks are being calculated. It is good for startups to have a look at this to understand how stocks work.

5
Anonymous Author
Good amount of ground covered on capitalization in a relatively short amount of time. Would be good to briefly cover other types of preferred stock in one additional slide.

4
Member's Profile
Interesting basic class. Good presentation skills, reasonably good slides. Look forward to attending more of her classes. I found the test wording to be challenging :)

4
Anonymous Author
Thorough but easy to understand explanation of equity and cap tables. Good for anyone who needs to compile cap tables or just wants to know how stock works.

2
Anonymous Author
I felt this course stated some characteristics of types of stocks as absolutes when they may actually be options of stock types. But perhaps I am wrong.

5
Member's Profile
like the legal angle in addition to general understanding. work with warrants and options a lot, but didn't appreciate some of the legal requirements

5
Member's Profile
This specialized CPE is very informative, and very well presented by an expert in the field. I appreciated the course, and thank the presenter.

5
Member's Profile
During this start up age, learning about equity and how it works is so so important. This was a pretty basic overview but good none the less.

5
Member's Profile
Good information and details, particularly on differences between options and warrants, etc. Will be looking into the more in depth courses.

5
Member's Profile
The material was explained in an easy to understand way which would otherwise be difficult to comprehend for many. Very well presented.

5
Member's Profile
This course is great for newcomers to cap table management. It gives you the rules of the game in a simple and easy way to consume it.

5
Anonymous Author
Very clear and effective instructor. In addition to finance professionals, this course is valuable for all business professionals

4
Anonymous Author
This was a great overview. The length of the class kept me engaged and I learned all the key words that would help me at work.

5
Anonymous Author
This course really helped to take the mystery out of a subject matter that I always considered "too complicated" in my mind.

5
Member's Profile
I thought that the instructor did a very good job explaining everything in detail. The exam reflected what was taught as well.

5
Anonymous Author
Really good course that provides an in-depth, yet brief, understanding of the topic of start up equity and capitalization.

5
Anonymous Author
Very informative and easy-to-follow course. Great instructor. Look forward to other lessons offered by this instructor

5
Anonymous Author
Really good course. Explains the parts very well even if you do not work with equity related transactions.

5
Member's Profile
This course was a good refresher on what makes up the cap table and what the different types of stock are.

5
Member's Profile
Very clear and helpful. Quiz and Exam made me think through the questions, not just based on memorization.

5
Anonymous Author
It is a great course, very informative! I like the instructor put a few examples about the cap table.

5
Anonymous Author
it is nice to understand share structure. Really appreciate for that. wish to see more good mectures.

5
Member's Profile
I liked the complications section which really highlight common things that may come up in a cap table

5
Anonymous Author
Great course. Love the capitalization table. Makes it easier to understand the different components.

4
Anonymous Author
Very informative. Example were a little simple but drove home what needed to be learned. Paced well.

5
Anonymous Author
Really concise overview focusing on the most common types/traits rather than distracting exceptions

5
Anonymous Author
This course provides great overview of different types of stock and rights of acquiring stocks.

5
Member's Profile
Very thorough and good examples. The key summaries at the end of each section was very helpful.

5
Member's Profile
A very good introductory course. Lots of useful information. Very well organized and presented.

4
Anonymous Author
Clear and basic. You have to listen to the presentation in order to get all the information.

5
Anonymous Author
This course gave an excellent overview of equity and did a great job explaining cap tables.

5
Anonymous Author
Course adequately covered the basics of start-up equity and how to understand a cap table.

5
Member's Profile
Very knowledgeable instructor. Course was a good introduction to the types of equity.

5
Member's Profile
This was my first exposure to Cap tables and set a good basic foundation of the topic

5
Anonymous Author
Can be easily tricked on the exam. Read and re-read before thinking you are correct.

5
Anonymous Author
This is an excellent course. It is great to finally really understand the cap table.

5
Member's Profile
Really good refresher course. Instructor presented material in a very clear fashion.

5
Anonymous Author
Excellent presentation. Slides are adequate and she explained the slides in detail.

3
Member's Profile
I enjoyed learning about start-up equity, an area I’ve never been involved with.

5
Member's Profile
This was extremely helpful in understanding the basic terminology for a cap table.

4
Member's Profile
Cap Chart was interesting. The basics on stocks were a bit too elementary for me.

5
Anonymous Author
The course was interesting and the concepts were easy to follow. I learned a lot.

5
Anonymous Author
Minimum review characters are being achieved with the generation of these words.

5
Member's Profile
Equity is always a dreaded subject matter; Susan made it easy to understand.

5
Member's Profile
Good presenter! Provided beneficial summary of common/preferred stock basics.

4
Anonymous Author
Quiz at the end was harder than the material - not sure which one's I missed.

4
Anonymous Author
Good overview of equity ownership. Instructor was not as engaging as others.

5
Member's Profile
I felt the course provides a solid foundation regarding the subject matter.

4
Member's Profile
The overview was very helpful and the slides are good reference materials.

5
Member's Profile
Instructor was very knowledgable and presented in a professional manner.

5
Anonymous Author
Good information on equity. Goes in depth with a few examples to boot.

5
Member's Profile
Really good summary of equity classes and capitalization calculations.

5
Anonymous Author
Good course, learned a lot. The information was presented effectively.

4
Anonymous Author
Good overview course. Learned some interesting twists to cap tables.

5
Member's Profile
Very interesting, great high level overview of equity and cap tables

5
Member's Profile
I learned a lot! Great presentation on a difficult/complex subject.

5
Anonymous Author
Good course and overview of the various stock of a corporation.

5
Anonymous Author
Great introduction to the basics of startup equity! Very concise.

5
Anonymous Author
Very good, one of the best overall review of the subject matter.

4
Member's Profile
Good introduction to the basics. The examples were very helpful

5
Anonymous Author
This course is a good introduction to items held in a cap table

5
Member's Profile
It helped give me a greater understanding of fully diluted %

4
Member's Profile
A lot of material. but solid information - makes you think.

5
Member's Profile
Great course! Covered topics not normally found elsewhere.

5
Anonymous Author
Very informative and presented in an easily digestible way.

5
Anonymous Author
Great explanation of equity types and a Cap Table scenario.

5
Member's Profile
Very helpful and concise view of a complicated subject

3
Anonymous Author
text could be better. Was a little hard to understand

5
Member's Profile
There was a lot of useful information in the course.

5
Member's Profile
Confusing material but worth learning. Enjoyed it.

4
Member's Profile
Thank you very much for this valuable course.

3
Anonymous Author
definitely basic but a good overview

5
Member's Profile
Good very basic overview of equity.

5
Member's Profile
clear explanations and progression

5
Member's Profile
very clear and concise.

5
Anonymous Author
good course

5
Anonymous Author
n/a

Prerequisites
Course Complexity: Foundational

No advanced preparation or prerequisites are required for this course.

Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
Startup Equity Basics
  Types of Stock11:07
  Rights to Acquire Equity 13:13
  Contingent and Non-Equity11:39
  Counting Equity - Authorized Stock5:23
  Counting Equity - Outstanding Stock8:37
CONCLUSION
  Capitalization Complications 14:41
Continuous Play
  Start-up Equity and Cap Table Basics1:11:39
SUPPORTING MATERIALS
  Slides: Startup Equity BasicsPDF
  Startup Equity Basics Glossary/IndexPDF
REVIEW & TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam