# When the cap table no longer fits the company

You raised money against a plan. The plan did not happen. What happened instead was a real business with real customers that simply is not shaped like the return the preference stack was built to deliver. That is a specific situation, and it has a specific answer.

## The position you are probably in

The product works. Customers pay and mostly stay. Revenue grows, but at a rate that made sense for a business and not for the plan the last round was priced against. Nobody has done anything wrong. The market turned out to be smaller, or slower, or harder to reach than anyone believed at the time.

What follows is familiar. The next round is not coming, or is available only on terms that would be worse than not raising. The fund that led the last round is late in its life and needs liquidity. Board meetings are about runway rather than product. The preference stack means that at any realistic price, the people who built the thing see very little of it.

Meanwhile the team is very good and increasingly aware the story has changed. Everyone is being asked to keep going toward an outcome that most of them have privately stopped believing in.

There is nothing wrong with the business. What is wrong is the ownership structure sitting on top of it. Those are different problems, and only one of them needs solving.

## What we can offer this situation

- **A clean exit for investors.** A fund near the end of its life needs the position resolved rather than carried. A sale gives a defined outcome on a defined timetable instead of a holding that keeps appearing on a schedule nobody enjoys discussing.
- **Continuity for the team.** The people who built it are most of the value. Our interest is in keeping them and giving them a company whose stated ambition matches what it actually is.
- **An honest conversation about the stack.** Preferences are what they are and we will not pretend otherwise. What we can do is be clear about the price early, so everyone knows where they stand instead of finding out at the end of a process.
- **No requirement to keep growing at that rate.** We are not buying a growth curve. A software business with loyal customers and sound economics is exactly what we want to own, at whatever rate it actually grows.
- **Speed, and a real answer.** One decision maker and no investment committee. If we are not the right buyer you will hear it quickly, which is worth something when runway is the constraint.
- **Somewhere for the product to continue.** Customers built their operations on this. A wind down leaves them stranded. Continuity matters to them, and it should matter to you after everything it took to build.

## Where we fit and where we do not

This is a situation with genuine constraints and we would rather name them than talk past them.

### This tends to work when

- The product is in real use and customers would notice if it stopped
- Revenue recurs and retention is sound, even if growth has slowed
- Investors have accepted what the realistic range looks like
- There is a team worth keeping, and enough time to run a proper process
- The business is at or near break even, or could be

### This tends not to work when

- The expectation is still a price anchored to the last round
- Runway is measured in weeks, which removes the ability to do anything properly
- The product needs years of further funding before it reaches a market
- The team has already gone, since without them there is little left to buy

> There is nothing wrong with the business. What no longer fits is the ownership structure sitting on top of it.

## Common questions

**Our investors expect something close to the last round price. Is that realistic?** Usually not, and that gap is the single most common reason these processes fail. We would rather put an honest range in front of you early than spend three months arriving at the same number with less runway left.

**The preference stack means founders and staff get almost nothing. Can you help with that?** We cannot change terms agreed in earlier rounds, and anyone telling you otherwise is not being straight with you. What we can do is start again on the part that is still ahead. After completion we put a new equity pool in place for the people who stay and build what comes next, earned on what the business does from here rather than set by a cap table written years ago. For a founder or a senior engineer whose stake has disappeared behind the preference stack, that is usually the conversation worth having.

**We have maybe four months of runway. Is it too late?** It is tight but not automatically too late, and it is worth a conversation this week rather than next month. What kills these processes is starting them with no time left to run them properly.

**How is your funding different from a fund buying us?** We raise funds for each acquisition individually rather than investing from a committed fund. That means each deal is matched to investors suited to that business and to the plan for it, rather than squeezed into a mandate agreed years earlier, and there is no fund clock running in the background. You will know precisely where our funding stands before you are asked for exclusivity. Given your position, that matters more than usual.

## Related

- https://www.coriniumcapital.co.uk/software-businesses/
- https://www.coriniumcapital.co.uk/alternative-to-private-equity/
- https://www.coriniumcapital.co.uk/succession/

Last updated: 2026-09-23