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Facilitator Guide

Capitalization

What’s covered

  • Stock 
  • Options and other convertible instruments
  • Vesting
  • The sale and issuance of stock
  • Capitalization tables

Before the session

Prepare the Attendees

Send the attendees an invitation for the session. Include this link, which has the videos and exercise they’ll need to prepare.

https://www.hotshotlegal.com/discussions/capitalization/attendee

Prepare Yourself

Watch the videos and read the exercise so you’re familiar with the Hotshot material.

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    Course

    Capitalization

    An overview of capitalization, including what lawyers mean when they talk about a company’s capitalization, the various forms of equity securities, the role of stock ledgers and transfer agents, and how to read a capitalization table.

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    Exercise

    PDF

During the session

Part 1: Knowledge Check
 
Ask attendees these questions to ensure they understand the topic:
 
  • What is a company’s capitalization structure?
  • What is the process for selling stock?
  • What are some common convertible security instruments and when might a company issue them?
  • What is vesting and why do companies use it?
  • What gets included in a company’s fully diluted capitalization?
 
Part 2: Group Exercise
*This exercise requires use of Excel.
 
Lead a group discussion based on the exercise. To encourage collaboration, divide the attendees into groups to discuss the exercise, then have a representative from each group summarize their views to the larger group. Call on people to share their thoughts and ask others to respond.
 
Tip for remote sessions: use your web conferencing system’s breakout room feature to divide people into groups.
 
Part 3: War Stories and Firm Specifics
 
Share your own experiences and guidance, including:
 
  • Anecdotes and war stories (e.g., about a near-disaster or a tough negotiation)
  • General practice tips (dos and don’ts)
  • Firm-specific guidance and practices

After the session

To continue their learning, attendees can check out related courses in Hotshot’s Corporate Governance topic.