What is Cap Table Management Software?

Introduction

Cap table management software enables companies to manage their equity which are their assets minus liabilities. You can use this solution to manage and track the complex procedures involved in issuing equity, getting 409A valuations, maintaining compliance, and controlling capitalization tables.

Company management and finance teams can utilize cap table management software as a centralized platform for all equity-associated activities. The application eliminates the requirement to make use of legal teams for each issuance. It can also drive decision-making and investment by offering management deep comprehension of their cap table at any point.

In short, cap table management software offers exit scenarios and model potential growth, allows equity governance and issuance, and presents cap table features.

Features of Cap Table Management Software

Private Company Services

When handling your cap table, prioritize and address the needs of your shareholders. Cap table management software helps you with this by executing updates synced with transfer agent services, enabling you to stay aware of the alterations to your stock transactions and issuances in real time. You can personally produce stats reports like vesting schedules and others needed to carry out stock options.

Public Company Services

The cap table management software provider can function as your transfer agent and assist you to apply for DTC eligibility, begin and finish your IPO, trade securities on OTC markets and national stock exchanges, and prepare for annual meetings. As your transfer agent, the vendor will:

• Organize and manage your staff plans with their software.
• Present escrow and capital raising services for your offerings as needed.
• Offer efficient tools and cap table tracking to handle investors in real time.

Crowdfunding Company Services

The provider can offer a range of services customized for enterprises conducting crowdfunding offerings. Its transfer agent and cap table services allow you to concentrate on launching your firm at minimal expenses while offering you control over your cap table.

Employee Plans

The vendor’s employee plan services can enhance the efficiency of all your admin requirements with your ESPP (employee stock purchase plans), employee stock option plans, and more. The online solution benefits both issuers and shareholders allowing you to handle your investor documents, stock issuances, and more. The software offers benefits such as:

• Permits issuers to manage and view their cap table online.
• Includes different access portals for issuers and employers, facilitating organization and improving security.
• The platform allows issuers to view, administer, and monitor their staff plans.

Benefits of Cap Table Management Software

Raise Funds on Good Terms

To grow your company, you need to accept investments at various rounds. This will impact the shareholders’ ownership and your ownership as well. By properly managing your cap table, you can better negotiate your terms. Therefore, it is important to keep the cap table up to date and accurate.

Issuing Options

You need to monitor the vested shares for all the granted options as the stock options typically vest over time. Sometimes, an option holder could leave the company early. Their unvested options are returned to the firm. This is because for the staff equity plans your company presents, the employee has a set period of time to exercise their choices before they are returned. Cap table management software helps with the above situation and also with early exercises, restricted stock, transfers, and various repurchases.

Hiring Key Staff

To recruit and retain great employees, you can offer equity compensation as an incentive. Therefore, you need to know how to craft and present a great compensation package. Executives will wish to know what their compensation would be at various exit values if the firm is acquired. To provide this information, you need an updated cap table that clarifies everything.

Remaining Compliant

Cap table management software can also help with tax regulation and compliance. If your cap table has been prepared on an old-fashioned spreadsheet, you’ll spend a lot of time trying to learn which parts to include in your tax forms. You can use a cap table management solution to ensure compliance without making errors and avoid IRS penalties.