Best equity management software for your company
All-in-all, Eqvista is a very easy-to-use equity management software.
Equity management software helps in the administration of equity in a company. Businesses that use the best equity management software, also commonly referred to as cap table software in the industry, use this crucial tool to help track and manage their company shares. The complex process becomes much easier for companies with this.
The processes involved in equity management include issuing grants, maintaining company records and documents, staying compliant with laws and regulations, sharing information about the cap table, and conducting annual 409a valuations. Startup equity management solutions are used by the management and finance teams in a company to centralize all the equity-related activities. It also helps management in making better decisions related to new investments and company expansion.
So, which is the best equity management software for your company? Let’s begin.
Company equity is ownership in the company offered in the form of shares. These shares are given in parts to various shareholders, who then gain the benefit of the profit in the company by having an ownership stake. The equity of the company is used in fundamental analysis to figure out its total worth.
Why is equity important in a company?
Equity in a company is important as it helps secure financing from investors. Equity capital does not have any repayment obligations or legal personal liability in the way loans do. So, unlike a loan, the company can give out equity (ownership) in exchange for company funding, with no obligation of fixed repayments to investors.
Along with the working capital, equity investments also offer founders access to all of the expertise of the investors. By getting smart investors, this provides an invaluable resource to help founders grow their business.
Equity Management Software
At the core, startup equity management is the same for all companies regardless of the industry or model. As mentioned before, equity management software is basically software that helps you track and manage all the equity in the company. This, in turn, helps you in making better financial and equity decisions for the company.
What is equity management software?
A cap table equity management software helps companies easily track and manage all the equity in the company. It would help in reducing the risks of recording an improper transaction that can lead to major headaches. In fact, the best equity management software would help you by taking care of all the complex calculations.
Some of the calculations that you will need include calculating the fair market value of the share-based compensation based on various assumptions like the equity value, discount rates, volatility, etc. A lot of the software providers offer share compensation with vesting schedules. And using equity management software would help you get the calculations done. It would help you save both time and money.
What are the possible ways to manage your company equity?
The reason why this topic is being talked about is that equity management is very important for every founder and company. If you do not do it carefully, you can end up making a lot of mistakes and compromising your shareholders. So, here are some tips to help you with the cap table management:
- Know who your founders are
- Centralize your data
- Regularly review your cap table
In addition to this, each time you take a new investor into your company or allocate equity to another party, there are risks that come with it. It is always a good thing to follow the rules and avoid:
- Taking unnecessary investment and giving out a lot of equity to overly dilute the existing shareholders
- Not asking for the right price for the shares and giving a large discount
- Focusing on equity way too much than needed
- Improper legal agreements
Equity Management Software from Eqvista
With this said, one of the best equity management software applications in the market is Eqvista. Not only is this application FREE to use, but it also offers amazing features. Eqvista is an advanced application that helps you in tracking and managing all the shares in your company.
Along with this, it also helps you in issuing shares, creating vesting schedules, adding shareholders, conducting board member meetings and recording votes, staying compliant with the law, and using round modeling and waterfall analysis to see how much dilution will occur with major financing events in the company. Here are some of the benefits of using the Eqvista app:
- Manage your equity all in one place: Reserve, Issue and transfer your company shares with ease all on the software.
- Set up and register your company: We can help you have your company incorporated in the US within no time.
- Handle the complexities of the cap table with ease: While you expand your business, Eqvista would simplify all the complex processes.
- Get a 409A valuation from professionals: Eqvista has a team of professionals dedicated to offering you safe-harbor status at a reasonable price.
- Keep an eye on your company standing: All your company records would be recorded on Eqvista, and the additional tools of the app would help you generate the financial analysis to see where your company stands.
- Share information with others: Eqvista allows you to share limited or full access to the company’s cap table with shareholders, accountants, lawyers, and others. You will also have the power to grant access to download the needed reports from the platform as well.
- Grow your company: With less time and money spent on handling share issues with this equity management software, you can easily focus your time on building your company. A neat cap table also attracts investors, allowing you to expand and grow your business.
Creating an Equity Plan on Eqvista
Here is how you can easily create a simple equity plan on Eqvista and issue share grants to your shareholders. But before you can do that, you will need to create an account on Eqvista and set up the company profile.
Step 1: From the dashboard, click on the option “Securities” on the left-side menu. A drop-down menu will appear. Click on “Equities” under this menu to reach the following page.
To create a new equity class, you will have to click on the top right button stating “Create new equity”.
Step 2: When you do this, you will reach the next page where the process to create a new equity class begins.
Here, select the equity type. There are two types of shares that a company has – common and preferred. In this case, we selected common shares.
Step 3: Once you select the option, a drop-down window will appear as shown below.
Add in the details of the equity class including the name of the class, the number of shares the class would hold, the date of the creation, and the board approval date. Once you have done this, click on the “Submit”.
Step 4: After this, you will be redirected to the next page where you can see the equity class. From here, you can start issuing shares to the shareholders.
And once you issue the shares to a shareholder, here is how the page would look like:
Just remember that the type of equity class you created would be based on the kind of equity and the plan you are offering. For instance, if you are offering options to employees, then instead of clicking on “Equities” in the first step, you will have to click on “Options”. The process to prepare the plan for ESOPs is almost the same. Learn more about it here!