Metrics & Performance
Market Cap
The total market value of a company's outstanding shares, calculated as share price multiplied by total shares.
Market Capitalization
Market Cap = Share Price x Total Shares Outstanding
Where
- Share Price
- = Current price per share
- Shares Outstanding
- = Total shares issued and outstanding
Market capitalization represents the equity value of a company as determined by the market. For private companies, the 'market cap' is approximated by the post-money valuation from the most recent funding round, though this can be misleading due to preferential terms.
In Practice
After the Series C at a $2B post-money valuation, the company's implied market cap was $2B. But because the Series C had 2x participating preferred, the effective value to common shareholders was significantly less.
Why It Matters
Market cap is the most commonly cited measure of company size, but in private markets, it doesn't account for liquidation preferences and other terms that affect who gets what.
VC Beast Take
Market cap is the vanity metric of company valuation. It tells you the headline number but nothing about what your shares are actually worth.
Further Reading
Startup Compensation: How to Evaluate an Offer Beyond Salary
A startup offer is more than salary and options. Here's a framework for evaluating total compensation, valuing equity realistically, and comparing startup offers to big tech packages.
Common Angel Investing Mistakes and How to Avoid Them
The most costly mistakes angel investors make — from insufficient diversification and ignoring terms to falling in love with founders and skipping reference checks. Plus how to avoid each one.
How Much Should You Invest as an Angel?
The math behind angel investing allocation — portfolio sizing as a percentage of net worth, check size calculations, follow-on reserves, and why $5K checks usually don't work.
Understanding Your Startup's Fundraising: What It Means for Employees
When your startup raises a new round, your equity changes in ways that aren't always obvious. Here's what dilution actually means, why higher valuations can be misleading, and what new investor rights mean for you.
How to Evaluate a Startup as an Angel Investor
A practical framework for assessing pre-seed and seed startups — covering team, market, traction, business model, and terms. Plus the red flags that experienced angels never ignore.
Angel Investing 101: How to Start Investing in Startups
A practical guide to entering the world of startup investing — from accredited investor requirements and minimum check sizes to finding deal flow and understanding the legal basics.
Related Guides
The First Fund Playbook: From Zero to Fund I Close
The definitive playbook for raising your first venture fund — building your track record, finding LPs, structuring terms, and closing Fund I.
Understanding Startup Equity and Dilution: A Complete Guide
How equity actually works, what dilution really means, and what founders take home in different exit scenarios. Real math, worked examples, no hand-waving.
The Complete Guide to Startup Fundraising
A step-by-step guide to raising capital for your startup — from deciding when to raise, to closing your round and everything between. Written for founders, by people who've seen both sides.
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