The venture capital industry has become a key driver of growth and innovation in the entrepreneurial ecosystem. As startups seek capital to fund their development and expansion, one of the most important considerations for investors is the composition of their captable, i.e., how their capital is distributed, one of the most important considerations for investors is the composition of their captable, i.e., how stakes are distributed among founders, investors and other stakeholders. But what is the importance of having a solid and balanced captable?

A poor captable can be detrimental to a startup in several ways. For example, if the founders have a very low stake in the company, this can lead to doubts about their commitment and alignment of interests.. Investors may perceive that the founders do not have sufficient incentive to work hard on the growth and success of the company. Similarly, when a large proportion of ownership is concentrated in a single investor, a situation of power imbalance may arise, which could limit the company's ability to make independent strategic decisions. On the other hand, a relatively high shareholding (close to 10%) by individuals who do not actively contribute to the company, such as former founders or university funds, may dilute the interest and commitment of current and future investors, as they will not see a clear alignment of incentives. Finally, having too many investors with small portions can complicate governance and decision making, as consensus will be required from multiple stakeholders with different priorities and approaches.

A well-structured captable is essential to attract investment and foster the sustainable growth of the startup. First, it is crucial that the founders have a significant stake in the company, which demonstrates long-term commitment: investors are looking for entrepreneurs who are motivated and willing to take risks to grow their business. 

In addition, it is important to maintain a reasonable number of investors, avoiding excessive fragmentation of ownership, it is important to maintain a reasonable number of investors, avoiding excessive fragmentation of ownership. This will facilitate decision making and communication with investors, as well as convey confidence and stability to potential future investors. Likewise, reserving a portion of the participation for the founders in case of success, through incentive plans or stock options, can further motivate their commitment and effort in the growth of the company.

It is also favorable to have a certain number of strategic investors that contribute more than just capital, especially on issues such as experience and industry contacts.especially on issues such as experience and industry contacts. In this way, a solid captable must balance the participation of the founders, maintain an adequate number of investors and align the interests of all parties involved.

The composition of the captable is very important and becomes one of the fundamental points that investors consider when evaluating a startup: a solid and balanced one can improve the company's ability to raise capital and foster its successful long-term growth. On the contrary, a poor one can generate distrust and limit the company's access to capital.. Thus, founders should focus on maintaining a significant stake in the company, seeking strategic investors, and balancing the portions and number of investors participating in the partnership.

Tomás Latorre

Fynsa AGF Team