startups is the technical name given to the methodology of computing financial sums each debt holder and shareholder is entitled to receive upon any successful acquisition transaction of the business (e.g. an IPO, an acquisition, etc.). Essentially it's just a sequence of complex mathematical equations which you use in order to calculate how the whole deal value will flow through to each entity ownership stake. startups aims to help provide the "how to" information about these financial tools with a simplified, condensed version for your easy review.

One of the first steps in calculating this type of financial statement is creating the template. Obviously this step is only necessary if you are using an accounting software package that supports the generation of financial reports such as Microsoft accounting or Quicken. Most small businesses do not have this capability, so the best alternative is to download or purchase a template that can be used in conjunction with your accounting software. Be sure to select a template that does not contain blank columns. startups mean the data required by your template will not be calculated automatically.

You will also need to consider the time necessary to convert the financial statements into a suitable format for Microsoft Excel. Typically this will mean downloading and then opening a spreadsheet from your accounting software. If you have no spreadsheet program installed on your computer, you may need to install an add-in for Microsoft Excel to allow you to directly open a spreadsheet that is linked to the plain Excel file containing your financial statements. This may raise some questions about your ability to "write code", but this is a rare occurrence and is a simple solution to the conversion issue.

There are two other very important cons related to these types of spreadsheets. One of them relates to the potential security issues that can arise if someone were to gain access to the spreadsheet. Obviously the goal of using a simple cap table template is to prevent unauthorized access to your financial statements. However, it is possible to reduce this risk by making changes to the spreadsheet after it has been created. A second con relates to the potential for users to edit the information in your financial statements.

startups can include a security feature called "waterfall" protection. startups is a mechanism designed to limit the amount of change that can be made to your financial statements by a person other than the shareholders (called Owners). The way in which this works is that after the tables, columns, and headers have been created, the changes that are made will only be able to make changes to one side of the sheet and cannot be made to any other part of the sheet. In effect, this type of protection prevents two individuals who are entitled to different proportions of the profits from diffusing or sharing their profits between themselves.

In order to illustrate what is meant by waterfall protection, let us imagine that we have created a new line item called New Shares. We then want to calculate how many Shares can be owned by individuals with each specific level of ownership. Once this is calculated, we then want to restrict the number of shares that can be owned by anyone else. For example, if there is only one person who has an interest in New Shares at a particular share price then that person is unable to sell their shares. This is analogous to locking people into a contract to buy shares of your company.

There are many other types of business structures where people can invest and there are often separate transactions for different levels of ownership, but for purposes of discussion we will stick to general securities. It is necessary to define what we mean by a waterfall within this discussion. In simple terms it would be the situation where all the shareholders have equal access to all the shares of a given company and that there are no restrictions on the number of shares that they can own. When this type of scenario is perceived, shareholders usually become wary of investing in securities like this. The waterfall illustration is where there is a restriction on the number of times that a shareholder can change his or her investment in a security or how much of a share he or she can own.

In order to illustrate how anti-dilution can affect the liquidation preference of the shareholders in a securities company it would be necessary to take one more step and define liquidation preference in the context of a waterfall. One way of thinking about liquidation preference is where a shareholder is not entitled to any dividends on the security but rather can choose to sell his or her shares. This could happen if the shareholder could determine that the price of the security is too low relative to the value of the shares of stock that he or she would otherwise be entitled to if they still had those shares. If this occurs then the shareholder would effectively be selling their security at a lower price than the market value of the security.