Finance teams and management employ equity management solutions to concentrate on all equity-related tasks. Utilizing equity management software minimizes the need for legal teams to be involved in each offering. Additionally, these solutions can aid in investment and expansion decision-making by giving management a clear picture of their cap table at any moment in time. Hence choosing the right one is of utmost necessity. To make it easier for you, we have listed the top 10 Equity management software for startups that every business should know in 2022.
Equity management software aids in the management of a company’s equity. Businesses that utilize the best equity management software generally, referred to in the industry as cap table software, relies on this vital instrument to track and manage their company’s stock. This simplifies a traditionally difficult process for businesses. You can also work a demo on free equity management software available to get an idea.
What is equity management software?
Equity management software simplifies the process of administering a business’s equity or its assets less its liabilities. Businesses utilize equity management software, also known as cap table management software, to track and manage the complicated operations associated with issuing equity, maintaining compliance, receiving 409A values, and staying current with capitalization tables.
While this may appear simple, it entails everything from tracking and reporting ownership changes to revising paperwork, engaging with stakeholders, consulting your board of directors, and remaining compliant.
Why do companies need equity management software?
There are many individuals, processes, and duties involved in equity management, which is not as simple as updating your cap table. The management of your company’s equity might get more difficult as it grows and as more capital is raised. Your cap table is automatically updated after you give a new share of your stock. An equity management system streamlines time-consuming operations, including granting access to the cap table, obtaining board permissions, performing liquidity events, and delivering investor information. It’s possible to lead the charge in increasing the number of stockholders when you use one equity management platform. Scale effortlessly. Be audit-ready throughout the year and attract your stakeholders.
If you’re looking for an equity management software for your business, here are some of the best software to check out:
- Eqvista — With Eqvista’s cap table software and industry-leading valuation services, you’ll be able to run your business more successfully. Eqvista will assist you in creating the most efficient cap table for your business, and its user-friendly interface will save you time. You can select from a variety of services, ranging from simple cap table management to comprehensive services that include company registration and 409A valuation.
Eqvista uses a cloud-based system for managing your company’s cap table. You can share the cap table with the necessary parties, oversee all aspects of equity accounting and keep track of your equity. In addition, you can establish an ESOP, manage RSU and RSA, manage vesting plans to shareholders and have waterfall analysis and round modeling conducted.
- Ledgy: Ledgy is the equity management solution built for fast-growing companies. It helps you get your cap table and employee participation plans right from the beginning: ESOPs & PSOPs to empower your employees with ownership. Make your financing rounds successful and engage your investors with an accurate scenario and exit modeling.
Ledgy shows the latest information to your chosen stakeholders about their investments while streamlining due diligence and handling every vesting schedule. Invite investors into their own custom dashboard that reflects accurate funding scenarios in real-time: valuations, dilutions, and exits, with a clear view of shared KPIs and more. Employees get their own dashboard with the ability to self-manage their equity and transparently monitor their shareholdings, vesting schedules, and future in your company’s success.
- Capshare: All-in-one platform for managing cap tables Capshare was created to assist businesses, law students, and investors in controlling their stock, equity, dilution, and ownership shares. The portal acts as a central point from which users can manage and track their equity investments, as well as access critical stock information. The system controls access to only authorized users who can read stock information, assisting them in making informed decisions. The software has risen in popularity, with over 10,000 organizations using the system to manage their equities.
Capshare not only simplifies shareholder management but also streamlines and personalizes it. You may manage your shareholders from nearly any location, as well as compliance paperwork, certificates, equity, and capitalization tables. You are no longer required to deal with manual processes, which saves you valuable time. A team of professionals is always available to address your problems and inquiries.
- Carta: Carta is the industry’s premier equity management tool for venture capitalists. Carta was founded in 2012 with the goal of assisting private enterprises in managing their cap tables and issuing electronic securities. Carta has since developed proprietary tools, employed industry professionals to conduct appraisals, automated the tax and equity compliance processes, and began servicing investors and entering the public markets.
Carta most recently announced Overall Comp, a compensation management software that includes benchmarking, leveling, scorecards, and total rewards. They now support over 23,000 businesses, 1.7 million equity investors, and have a total worth of over $2.2 trillion in private assets. Carta is committed to assisting founders in their growth and now offers Carta Launch — free fundraising and equity management platform for early-stage entrepreneurs.
- Shareworks: Solium Shareworks is an equity management solution designed to assist you with the administration of restricted stock units and employee stock purchase schemes. This may be accomplished across your organization and even internationally, making the platform suitable for businesses with worldwide operations. Employees will benefit from the system since it will provide them with a comprehensive view of their vesting timelines, stock valuation, and option release elections, among other things.
The software incorporates a variety of elements necessary for proper equity management. These include employee safety during blackout periods, as well as automated share selling and holding alternatives. Additionally, it keeps users informed of share allocation. Built-in analytics assist stockholders in tracking the success of their investments, including current and future option values.
- Captable.io: Captable.io is a free cap table management solution that enables you to create cap tables and scenario models quickly and efficiently. The software accomplishes this by helping you through each step. It alerts you to critical organizational data that should be included in your cap tables, such as your stock option pool, employee grants, and convertible notes. It is a model of a circle with an exit. The software can help you determine the impact of a proposed investment on your company’s shared ownership.
Additionally, it estimates note conversion and possible dividends to shareholders. The system stores your cap tables in a very secure location on your behalf. These can be shared with appropriate people if they have been granted access to the papers. Captable.io is a cloud-based service that can be accessed from nearly anywhere at any time. This enables you to manage your equity even while you are not in the workplace.
- Vestd: Vestd is the UK’s first fully automated equity distribution and management platform for SMEs (SMEs). Our cloud-based platform streamlines and manages every step of equity distribution. They save private businesses time, aggravation, and money by enabling them to leverage equity to accomplish their goals. Vestd is the only platform that fully integrates with Companies House in both directions, which saves you time and money.
Every aspect of the business is conducted digitally. They provide a variety of reward options, including Real Shares, EMI & Unapproved Options, Growth Shares, and Agile Partnerships™. They use an in-house valuations staff and provide industry-standard legal documentation. Create a scheme using the available templates and documentation from the ground up, and you’re ready to begin.
- GlobalShares: Global Shares offers equity compensation solutions to some of the most innovative firms in the world. They are solely focused on equity pay, and as an employee-owned business ourselves, they understand the crucial function of getting it right. From seed to initial public offering (IPO) and beyond, they have an equity management solution to meet your objectives. Their Growth Platform is a self-service, cloud-based software solution for early-stage firms that streamlines the process of issuing equity, managing your cap table, fundraising, and scaling.
No more jumbled spreadsheets -they empower founders, executives, investors, and advisers with a single source of truth. Instant insights are provided by scenario modeling and waterfall analysis tools. They assist you in becoming more intelligent. Employees can also log in and view their available options and awards, which can help promote engagement.
- Backstop: Investment management software that is hosted on the cloud Backstop is aimed squarely at hedge funds, consultants, pension funds, private equity, venture capital firms, as well as institutional investors and foundations. It has plenty of other features aimed at increasing the productivity of your assets. The system includes a range of functions, including portfolio research, portal and investor relations, accounting, and backstop CRM.
If, on the other hand, you’re desperate to increase your sales, Top CRM tools would be a good investment. It improves investment productivity by allowing you to manage investor communications, accounting, portfolio research, and sales. Investment tracking backstop will enable you to keep track of payouts, subscriptions, and capital commitments over the entirety of your portfolio. An accounting solution, or the accounting tool included with the platform, aids in the management of your equity. The application accomplishes this via dashboards and free calculations.
- True equity: Truequity is a robust stock option management application that keeps track of employee stock ownership. The service provides customers with up-to-date and accurate information on their stock ownership, allowing them to better understand the impact of liquidation and future financing on their businesses. Truequity aids users in this area by modeling and tracking share transactions. Calculations of holding percentages, conversions, and share prices are used to accomplish this.
The software maintains a record of every employee’s stock holdings, which is easily accessible to authorized users. It is an extremely secure technology that protects your data from prying eyes. With its built-in models, the system essentially does the arithmetic. Future rounds of financing can be modeled using the software’s option pool growth, values, and liquidation preferences. Additionally, it can generate notices of exercise and grants to both businesses and employees.
Purchasing an equity management tool is not as straightforward as it may appear. There are a number of characteristics that such software must possess in order for a purchase to be “the right one.” Of course, the overall need is that it complies with best practices in four major areas, accuracy, security, efficiency, and comprehensiveness.
The appropriate tool must generate accurate data that can be obtained from equally accurate calculations. Failure to meet this condition could spell disaster for your business. Incorrect statistics can have a negative impact on your employee-owners and could cause compliance issues. Additionally, a good solution will provide data security and accessibility. Finally, the ideal solution should be comprehensive, providing all of the necessary capabilities to make maintaining your equity as simple as possible. These activities may involve record keeping, share valuation, vesting date scheduling, and share price. Therefore, while selecting one, make an informed choice.
Effective equity management is vital to the profitability of your business. If you’re considering offering stock or have already begun developing your company’s equity plan, an equity management platform can assist you. However, there are key characteristics of a decent equity management system that we have mentioned above that you should consider before acquiring one. By adhering to these principles, we hope that this article can assist you in your search for the ideal platform.