In a featured article for Accounting Today, entitled “Venture capital drought leads to cap table chaos,” BPM’s James Lichau, CPA, Partner and Assurance Financial Services Co-leader, provides a comprehensive analysis of the current state of startup financing and its implications for capitalization tables. 

Leveraging his deep experience in assurance and financial service, James offers his insights on the challenges startups face in maintaining accurate cap tables amidst financial turbulence. 

“Companies that can demonstrate traditional capabilities like operating efficiency, financial control and tight business planning alongside their innovative technology development are being rewarded by investors,” states James in the article. 

Key article insights: 

• Venture funding landscape: James highlights that 2023 was the worst year for VC funding since 2017, with 2024 showing little improvement so far. 
• Cap table challenges: The article emphasizes how guerilla fundraising and crisis management often lead to inaccurate cap tables. 
• Investor expectations: James notes that a disorganized cap table can be a significant deterrent for potential investors in the current market. 
• Cleanup process: The article provides a detailed guide on how startups can clean up their cap tables, including document gathering, reconciliation and implementation of cap table software. 
• Importance of accuracy: James stresses that a clean cap table is a statement of operational competence and managerial transparency. 

Despite the challenges startups have faced in recent years securing venture capital, maintaining a “squeaky clean cap table” can be a game-changer when seeking new investment. The article offers valuable guidance and practical steps for companies looking to clean up their cap tables. 

BPM: Empowering your path to success 

In today’s challenging market, partnering with an experienced team is more important than ever. At BPM, our specialists can help you deal with cap table issues, guiding your company through the complexities of maintaining accurate financial records and preparing for future funding rounds to attract investment. 

To discuss how James’ insights apply to your company’s financial strategy, contact us.