Eqvista has been making great strides in updating and growing our application for our users. We have been making key changes to put our cap table management application at the top of the market, and expand the functionality of the system. The best part of our system is its user-friendly approach and wide functionality for share management.
Eqvista’s Main Features
Eqvista started off with features that made it stand out from the crowd.
These features include:
- Share Management: You will be able to easily manage all your shares online. You will also be able to transfer existing shares easily. Issue new shares and may other things all in the cap table.
- Company Incorporation: As soon as you have your business idea ready, Eqvista can help you with your company incorporation. Set up your company and get your business running in no time.
- Cap Table Management: Don’t just manage all the shares in your company, also stay up to date with the filings and company records.
- 409A Valuation: Get your 409A valuation prepared by the professionals at Eqvista and take your company further.
- Issuance of Company Shares: Say goodbye to all the paperwork and issue shares electronically to anyone through Eqvista.
- Waterfall Analysis: Analyze the financing rounds, exit waterfall scenarios, and share dilution of your company with this powerful model on Eqvista.
- Connect with Shareholders: You can easily share complete or restricted access to the cap table with your shareholders, lawyers, accountants, and others.
New Features in Eqvista
Just like the many great primary features of Eqvista mentioned above, we have added some more functions to make the share management smoother. These are the secondary transactions of a company. Not sure what secondary transactions are? The next part would explain the difference between a primary issuance and a secondary transaction.
What is a Primary Issuance?
This is the original issuance or the source of equity, which usually includes common and preferred stock issuances. On the other hand, convertible securities, warrants, and stock options are derivative grants from which the equity will be derived in the future.
What is a Secondary Transaction?
The transactions that take place after a primary issuance has been granted is called a secondary transaction. These transactions include debt repayments, equity conversions, repurchases, transfers, sales, cancellations, and exercises.
Secondary transactions come in many forms:
- Sale of stock by employees or early investors to a third party;
- Company tender offers; or
- Liquidation of founders as part of a financing round.
These transactions change the equity amounts and ownership status of the primary issuances. These also control the transactions that take place after the initial grant (primary issuance).
How does a secondary transaction impact the 409A?
When you are about to get your 409A valuation done, it is important to know if there was a secondary stock transaction that occurred before the valuation date. The nature of this also has to be kept in mind while considering its influence on the 409A valuation.
Here are some of the common questions that need to be considered:
- When did the secondary transaction take place?
- Who were the buyers and sellers?
- What is the relationship between the buyer and seller, if any?
- What was the total number of shares sold and at what price?
- How was the price of the share determined?
- Can each shareholder sell the shares at the same price for this sale?
- Did the buyer get complete access to all the important information about the company, like the financial forecasts and financial plans?
- Was this a recurring transaction or a one-off event?
By answering these questions, you will be able to evaluate the potential impact of the secondary transactions on a 409A valuation. As a matter of fact, potential auditors will place more scrutiny on the secondary transactions for any private company. This is why you need to take care of these transactions properly.
Secondary Transaction List
Below is a list of features that have been added to handle the secondary transactions of your company through Eqvista:
1. Equity/Warrant/Option Grant Cancelation
Under this feature, a user can now cancel a grant. And once this is done, the application will save the grant with the canceled status and the shares would be returned back to the company. You will be able to see the canceled grants on the Security Page below the table of all available grants.
When you request to cancel a grant, you will get the following display box. You can then select “Yes” to cancel the grant. This will then cancel the grant, return the shares back to the company and you will be able to see the canceled grant in the company records.
2. Equity/Warrant/Option Grant Restoration
This feature would restore the grants that have been canceled. It takes the shares from the security to be used in the grant restoration. In case the security doesn’t have enough shares for the grant to be restored, it would show a message to reserve more shares to complete the restoration.
For you to restore a grant, you will have to go to the security page and click on “Actions” on the cancelled grants. A drop-down menu will appear where you will see the option to “Restore Grant”. Click on this and your grant will be restored if the security has enough shares available. Otherwise, you will need to increase the number of shares in the security before you can restore the grant through the same process.
3. Equity/Warrant/Option Grant Repurchase
This is another secondary transaction feature available on Eqvista. With this feature, you can either fully or partially repurchase a stock, option or warrant grant. This will then return the grant back to the company. This is how the dialogue box for repurchasing looks on Eqvista:
For now, Eqvista allows you to repurchase the company stock without a vesting schedule. But soon we will be adding the feature for those looking to repurchase vesting shares.
4. Warrant/Grant Exercise
This function is called “Convert to Stock”. It allows you to convert option and warrant grants to stock. Once you select the option, you will get a pop-up dialogue box where you can fill in the details and click on save.
Another secondary transaction that you can use is the transfer of shares. For this, you can go to the primary transaction section and select the option to transfer the shares. Once you do this, a dialogue box will appear, where you can add in the recipient, transfer type, price per share, transfer date and new share name.
6. Note Conversion into Equity
This feature allows you to convert your notes into shares. All you need to do is go to the convertible note on the Eqvista app, and choose the option to convert. Click on the option and a dialogue box will appear. Add in the necessary details and click on “save”.
You will be asked to confirm the details before you can submit a request for the conversion. Once you confirm the details, click on “submit” and the convertible note would be converted into shares.
Eqvista’s New Secondary Transaction Log Page
With all of the above information, you can see that Eqvista has incorporated great new features to help you keep proper track of all the secondary transactions in your company through your cap table.
We have also incorporated a user-friendly interface that would display all the secondary transactions for you and your company. There are color visuals used in the website along with statistical information about each type of transaction. This allows you to read the table instantly and understand all the information you need.
The table also has tabs to get more details on each type of transaction. These will record the transactions that took place in the company for each type of secondary transaction. This will help you manage the shares in the company.
Eqvista has implemented these new ways to keep track of your company’s records into our app. You can now have confidence in processing the secondary transactions of your company, and see the results all in one place. So why not try it out today? Sign up here & begin tracking the shares of your company!