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

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