Free cap table template for CFOs who like to plan ahead

Even the cleanest spreadsheet can hit its limits. This free cap table template by Fidelity Private Shares can help early-stage teams track equity clearly and correctly, while setting the stage for a seamless transition to a more scalable solution when needed.

Yo, it's CJ! I’m hosting a happy hour in NYC. Come hang with fellow Mostly Metrics readers on Wednesday April 8th.

I’ll be telling my favorite LTV to CAC riddles.

RSVP below. It’s at an undisclosed location guarded by my ferocious Berne doodle Walter.

Really pumped to meet you IRL

Congrats, a sale is imminent. While it ain't real until the check clears, as Mozart used to say, let's talk about what happens to you personally when the deal goes through.

In 8 out of 10 acquisitions, the CFO gets canned. That's not always a bad thing. There can be a lot of money in that off ramp. But only if you know where to look (and only if you start looking before the ink dries).

Most of what gets written about M&A is written for the company. The working capital peg. The asset vs stock deal structure. Benchmarking the banker fees. Almost none of it is written for the CFO sitting in the middle of it all, grabbing the deal by its hair and yanking it along the tracks to its logical conclusion (while low key wondering what it means for them). It's a very niche, stressful, and financially nebulous point of limbo.

This is that piece.

When a deal gets announced, most people inside the company think about one number. The headline price. The $350M or whatever it is.

That number is only half the picture.

There are actually two distinct pools of money in any acquisition. The first is the deal consideration - the headline price that gets divided among existing shareholders. This is a fixed pie. Every dollar that goes to one shareholder is a dollar that doesn't go to another. It's very much zero sum.

The second pool is the retention and incentive pool - money the acquirer sets aside to keep key employees around after close. For most employees, this has nothing to do with Pool 1. It comes out of the acquirer's budget, not the deal price / price per share, so it doesn't affect what your shareholders receive.

The acquirer may even encourage that confusion — if they can frame your retention package as part of the deal consideration, they're effectively getting your shareholders to pay for your retention instead of paying for it themselves.

Your job is to keep these conversations completely separate. That's how you maximize your value. You want to get the most out of each pot.

Here's what that looks like in practice. When the bankers come back with a bid of $350M, you gotta make sure the conversations stay clean:

The acquirer may push back and say the size and shape of the overall retention pool is none of your business. Why? Because if you know how much is on the table, you have more leverage to negotiate your slice of it. It's in their interest to negotiate each person's retention package independently so nobody knows what anyone else is getting. If you knew the pool up for grabs was $10M, you'd negotiate differently than if you thought it was $2M.

Whether they disclose it or not, your job is the same: make sure your package is coming out of their pocket, not your shareholders'.

One more thing about the bankers: they're on your side, but they're also motivated to close. You are their client and their product simultaneously. A deal that gets done at $300M is better for them than a deal that stalls at $310M because someone got into the weeds on employee retention packages. It's like a realtor. They don't benefit a ton from the price of your house being $1M vs $1.1M (while you do, it's pennies to them, and the existential risk of making nothing is larger since the bulk of the fees are success based).

So watch for situations where your personal economics get glossed over or folded into the wrong part of the deal structure.

A classic example: the acquirer says "we'll pay CJ $1M as part of the deal." Sounds great. But if that $1M gets counted as deal consideration rather than coming out of the retention pool, it's effectively being paid by your shareholders, not the acquirer. They got your retention for free. And you didn't maximize both pools of money. The bankers won't necessarily catch that or flag it; that's not their priority. Protecting you is your job.

The first thing to check: do you have an employment agreement?

An employment agreement is a contract between you and the company that spells out your compensation, your role, and critically what happens to you if the company is sold or if you're terminated. It can include things like severance terms, acceleration of unvested equity, and change-of-control provisions. Without one, none of that is guaranteed. You're an at-will employee with whatever your offer letter says.

Most early-stage CFOs don't have one. If you don't, that's your starting position. Not a death sentence — just the baseline you're negotiating from. Better to know it now than to find out mid-process. I personally did not have one when I sold my first company. I still managed to get full acceleration.

Speaking of that, the same question applies to acceleration. Do you have a double trigger in your grant agreement? Single trigger? Nothing? If you don’t have any acceleration terms, either your existing company’s board will be incentivized to cancel unvested shares to increase the pot for shareholders or the acquirer will take the view the unvested shares are theirs to work with.

If the process is still early, you can still fix some of this. Go to your board and get employment agreements or a management carve-out plan put in place for the exec team. I’ve seen this done at the eleventh hour. It’s a reasonable ask. If you’re selling for $300M, spending $50K on an employment attorney is not a super hard conversation. The board should understand that protecting key people actually protects the deal.

While I’m sure your attorneys for the company are great, they are working to get the deal done for the company, not the individuals. They can give you some advice if you’re friendly with them and the advice won’t conflict with their duties to the company, but it’s not the same thing as using a separate counsel.

And if you can't get the agreements, at minimum know exactly what you're working with before anyone starts making asks. Pull your grant agreement. Know your vesting schedule. Know how many unvested shares you have and what they're worth at the expected deal price. Walk into every conversation with that number in your head.

Hard to negotiate what you haven't calculated.

Most CFOs make one of two timing mistakes. They bring up their personal situation too early — before there's even a real deal on the table — and come across as selfish mercenaries. Or they wait too long, the process gets hot, and suddenly they're negotiating from a position of zero leverage with a fiduciary obligation to get the deal done regardless (train left the station!).

The right window is just before the banker gets engaged, or minimally before the banker comes back with something concrete.

Go to your CEO, not the board. Not the bankers. Your CEO is the person who can champion your ask internally and carry it to the board on your behalf. Your CEO is your friend and advocate here. Then pick one trusted board member as a secondary — someone who understands that protecting key people protects the deal — but always start with your CEO.

The script is actually pretty simple. Just make sure you’re not threatening anything and you’re not emotional about it. You're purely citing market:

Then make the ask. Acceleration. Transition structure. Put it in writing in an email.

This framing does three things.

If you don't have a double trigger, don't wait. Go get acceleration added before the deal closes.

The argument here is clear: you were hired to get the company to this moment (the event is more the goal than time served). For reference, the bankers are getting paid more than a point of the deal for a few months of work. Let's say you hold ~1% of equity. And you’ve been building this for multiple years. Getting accelerated on your unvested equity before close is reasonable for what you've delivered and really not a massive number if your investors are all making money.

It's you asking to be paid fairly for a job you've already done. Once again, make it a market conversation, not a personal one. "I've talked to other CFOs in the space and this is what you'd typically see."

If you get half your remaining grant accelerated, that's still a win. Anything below that is a bummer. And if you get nothing, you better make sure your retention package from the acquirer makes up for it.

The board may not be able to formally commit to anything before the deal is announced — that's normal. But a CEO who's in your corner will often give you a handshake: "I can't put this in writing yet, but I've got you." That's not nothing. It means you have an advocate in the room when the real negotiation happens. If you don't even get that, pay attention — it tells you something about how the conversation is going to go.

Oh, there’s a third pool worth knowing about, and this one comes from your own board.

Some boards, particularly when the deal generates a strong outcome for shareholders, will authorize a one-time deal bonus pool for the employees who made it happen. Think of it as a thank you — discretionary, not guaranteed, but not uncommon when people are making real money.

It works differently than the other two pools. This money comes out of the cash sitting on the company's balance sheet at close. And since most deals are done on a cash-free, debt-free basis, whatever cash is left in the bank at closing gets swept into the deal proceeds and distributed to shareholders. A deal bonus paid out before close reduces that cash balance — which means it modestly reduces the per-share price everyone receives.

Your shareholders are effectively funding it. Which is why it only really happens when there's enough goodwill in the room — when the outcome is solid enough that nobody's going to squabble over a few hundred thousand dollars coming off the top.

Note: Don't ask for a deal bonus if it's a fire sale.

The people who should be in this pool: your Controller and your FP&A leader. They've been running the diligence process while simultaneously doing their day jobs. They know better than anyone that there's a reasonable chance they're about to be "synergized." A $50K to $100K bonus each is not an unreasonable ask, and framing it to your board as deal protection is usually enough to get it across the line. Short money for them putting in six months of night time work.

As CFO, you can be in this pool too. But lead with the team.

Here's the reality of what happens to most CFOs post-close. The acquirer already has a finance org. They don't need another well paid CFO. What they need is someone who knows where all the bodies are buried — the contracts, the customer commitments, the accounting quirks, the things that live in your head.

That's your leverage. Tribal knowledge is an insurance policy. And the window where it's most valuable is short.

A typical transition period runs three to six months. After that, the acquirer's team has figured out most of what they need and the value of your institutional knowledge starts to decay. Be honest about that. Don't oversell a two-year runway when the real value is in the first two quarters — and frankly, you probably don't want to be there two years anyway. You want to appear incredibly valuable, but only for a defined period of time. Lock in the months, do great work, and leave on your own terms.

The structure that I've seen work: three months full-time post-close, followed by nine months on a consulting basis at the same OTE. One year in total comp. But you’re only truly working for three months and then are free to start your next thing. You're available when they need you, but you're also free to move on to your next thing.

Here's roughly what that conversation sounds like with the acquirer:

The "startup person" framing is doing a lot of work there. It's honest, it's disarming, and it signals you're not going to be a headache. You're not negotiating against the deal. You're purely negotiating your exit from it, and doing them a financial favor by not trying to overstay your welcome. They’re going to EBITDA adjust away your severance anyways.

You've probably spent years making sure everyone else got taken care of. And that same instinct — to put your head down and trust that good work gets rewarded — is the one that will cost you in this moment.

It won't always get rewarded. Not without asking. Closed mouths don't get fed, as they say in The Wire.

The acquirer needs you. Your CEO needs you. The deal needs you. The first two accounting closes post acquisition need you.

You’re very valuable for a distinct yet finite period of time. Turns out that's worth something.

So ask. Do it at the right time, and ask for market. Put it in writing and do it calmly.

The off ramp can be a good one. You just have to build it yourself.

TL;DR: Medan Multiples are FLAT week over week.

The overall tech median is 3.0x (DOWN 0.1x w/w).

What Great Looks Like - Top 10 Medians:

Wishing you get negotiate a strong exit package,

CJ