The Cap Table Masterclass debuted in early 2022 and has evolved throughout its eight cohorts of students. Here's what I learned from teaching the course in 2022, and how it's evolving in 2023.
The first cohort in 2022 leveraged what I had learned from building, using, and iterating on the Cap Table and Exit Waterfall tool for the last 5+ years. My goal was to teach people how to do the math in that model for themselves, to understand how to issue equity, convert SAFEs and notes, issue option pools, and build exit waterfalls. I took a lot of time to build slides for each session and prepare for the class. But my second session didn't go as planned; building a model live during class from scratch, plus teaching the content, was a bit more challenging than I had expected. After that session, I then sat down and rebuilt new components and examples to cover the material for that class, and re-recorded a new session for people. And then I rebuilt the slides and model components and examples for each session. Overall, it worked, and the 8.8 (out of 10) course rating indicated I was on to something.
The second session used the same course materials, and it worked ok, which the 8.5 rating indicated. But for the third cohort, I changed it up; I removed three sessions, condensing the material from two of them into other sessions, removing the session on modeling tokens (most people weren't as interested in it as I was, so I turned it into a post and free model), and created two office hours to give more space for people to ask questions, and the course felt better, which I think the 9.0 rating reflected.
That's when I changed direction. Teaching the course, building new tools, and listening to questions forced me to reconsider my fundamental assumptions about the best way to teach the material. I rebuilt the base cap table and exit waterfall tool, reworked 50% of my slides, and redid all of my example tools to alter how I taught the concepts. Here's my thing: the terms we commonly use - e.g. premoney conversion, postmoney option pool - don't match up with how the legal documents describe what happens, and I think the process of translation creates confusion and makes it harder for a less experienced practitioner (for example, a founder that goes through the fundraising process a few times) to understand what's going on. Opaque, confusing, almost exclusionary. The math behind cap tables is not the hard part; the hard part is understanding the terminology and how to use it.
I refocused the content to create more of a progression for students. Less algebra and complicated math, more focus on first principles, detailed use of the actual legal documents used in financings, and a nuanced shift in how to teach the common terminology. I can still dive into the complicated math if needed (and all the examples and explainer videos are still available), but they aren't the first thing I teach. And I also added an optional case study, a chance for people to work alongside the class to build their own model, much like I do for investors and founders all the time, and focused the office hours on the case study.
I liked the flow of the course better, and I felt people understood things easier, and the ratings reflected it: cohorts 4 and 5 rated an overall 9.8 out of 10.
For cohort 6, I redrafted the intro slides to the topic to cover cap table hygiene better, streamlined the case study, and edited the flow of two of the sessions. To create more opportunities for practice, I created a series of mini-cases or practice exercises with prompts to model and accompanying answer keys and videos discussing how to model each one. And based on chatter on Twitter, I added details on crowd safes and docs used in crowdfunding, to expand on different types of fundraising documents.
In parallel with the masterclass, in late 2022 and early 2023 I also ran Build a Cap Table from Scratch, a one-day workshop created to be a short course on the topic, a condensed format to cover cap table modeling (excluding the exit waterfall component). The format has been well-received, but I also think it has some challenges in helping people learn the concept, as by nature of being a one-day, three hour workshop it doesn't provide a lot of space for people to reflect, review, and practice. Works for some, doesn't work for others.
After running the same content for cohort 7 of the masterclass, in mid-2023 I tweaked the format for cohorts 8 and 9 in two main ways:
- Adding a new session on modeling investor returns, expanding on the exit waterfall material to show how to use waterfalls in valuations, portfolio management, and forecasting returns for investors across multiple classes of shares. The primary goal is to create a second class on waterfalls to give more time and review of the material while expanding on how to apply the concepts for practical goals.
- More flexibility to choose what to learn. The classes always provided flexibility in how people can learn (join live, watch on your own, practice on your own, live Q&A with me), for this cohort I added options in what people can choose to learn. The masterclass can now be taken in sections - Beginning Cap Tables, Intermediate Cap Tables, and Intermediate Exit Waterfalls - and you can take whatever combination of classes you want. Start with any section (prerequisites not required), register for additional sections, take them when you want, or upgrade to the Masterclass if you want. More flexibility in content to help people learn just what they want.
For cohort 10, I changed the cadence of the classes to one per week to allow for more time to review the materials and work on the practice exercises between live sessions, improved the extra videos for those choosing to take the course self-paced, and added a new section of content to the exit waterfalls section about handling unconverted convertibles (SAFEs and convertible notes) in liquidity distribution calculations.
Cohorts 11 and 12 in early 2024 followed the same cadence and content as cohort 10, with some changes to the first class around anti-dilution (to help make the topic more approachable), and the testing of an alternate time slot.
Cohort 13 will follow the same content and structure. Currently I am working on creating a better community for course participants and alumni, as well as easier access to new content for course alumni.
A lot of changes over time, and to me this highlights why I teach: doing the work with thousands of people is how I learn, and every course is an opportunity for me to get better.
I'm looking forward to seeing how the courses continues to evolve. If you'd like to join me for the Masterclass, you can register for the next course here, or learn about all of the cap table courses here.
Question on whether a course is a fit for you, contact me.