Cap Table as a Growth Strategy
Recruit influential founders and operators onto your cap table so they become your earliest, most credible customers and evangelists.
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 3
- Confidence
- 80%
Ramp's founders deliberately assembled a large number of early-stage founders, influential operators, and advisors onto the cap table, and many of those companies became Ramp's initial customers. This seeds credibility and word-of-mouth in a tight community, because a peer who actually uses the product is more persuasive than an investor's recommendation. Batchu notes the customer-founders drove more than the VCs did.
Origin
An early-days tactic by Ramp co-founders Eric Glyman and Karim Atiyeh, who had a prior successful exit and reputation; Batchu labels it 'cap table as a growth strategy.'
Core principles
- 01Founders and operators on the cap table convert into early customers
- 02A peer customer's endorsement outweighs an investor's recommendation
- 03Concentrate early adoption within a well-connected community to seed word-of-mouth
- 04Founder reputation from a prior exit makes the cap table easier to assemble
How to run it
- 1
Recruit influential operators onto the cap table
Get a large number of early-stage founders, respected operators, and advisors invested in the company.
Pro tip Prioritize founders and executives of potential customer companies over pure financial investors - they convert to usage.
- 2
Convert investor-companies into initial customers
Make the companies whose founders are on your cap table your first customers, so adoption and ownership reinforce each other.
- 3
Let peer usage drive community word-of-mouth
Rely on the fact that other customers who actually use the product are more persuasive than investor introductions, generating love within the founder community.
Watch out Don't over-rely on VC introductions; companies have their own decision frameworks and weight peer usage over investor opinion.
In the wild
Ramp put many early founders, operators, and VC firms onto its cap table, and those companies became initial customers. Batchu notes VC introductions helped but mattered less than expected, because a customer who actually used the product carried more weight than an investor's recommendation.
→ Strong early word-of-mouth and love in the tech founder community, even though Ramp's revenue base later shifted to mid-market and enterprise.
Common mistakes
Expecting VC introductions to be the main channel
Companies have their own decision-making frameworks and weight a peer customer's real usage over an investor's recommendation, so investor intros drive less than founders expect.
Assuming a founder-community wedge is your long-term market
Ramp's early love came from tech founders, but the majority of revenue later came from mid-market and enterprise; treat the cap-table community as a seeding tactic, not the final ICP.
Is it for you?
Best for
Founders with reputation and network launching a B2B product into a tight, well-connected community
Not ideal for
First-time founders without the network or reputation to assemble an influential cap table, or products whose buyers aren't a connected community
From the transcript
“what I call kind of cap table as a growth strategy where they did a great job of getting a large number of you know…”
“it turns out it doesn't matter maybe as much as uh as another customer who's actually used the product that they know or are actually…”
From the episode
Lessons from scaling Ramp
Sri Batchu (Ramp, Instacart, Opendoor)