Simplified equity management

A cap table (short for capitalization table) is a detailed document outlining the ownership structure of a company. It includes shareholders, equity stakes, and types of securities (common stock, preferred stock, stock options, warrants, or convertible securities) owned.

Effective cap table management is essential for:

• Clarity of ownership: Accurately reflects who owns what and the value of their stakes
• Informed decision-making: Affects governance and voting rights
• Investor confidence: Clean, accurate cap tables attract and reassure investors
• Regulatory compliance: Ensures adherence to legal and regulatory requirements
• Equity planning: Assists in structuring funding rounds and managing options pools

A cap table should be updated whenever there are changes in the equity structure, such as:

• New funding rounds
• Stock options granted or exercised
• Issuance of convertible notes or SAFEs
• Transfers of ownership
• Stock splits or reverse stock splits
• Mergers or acquisitions

• Incorrect share count: Failing to reflect total shares, including options and warrants
• Delayed updates: Not updating cap table after funding rounds
• Missing vesting details: Overlooking vesting schedules for employees or founders
• Ignoring dilution: Neglecting how funding rounds or exercises of options impact ownership percentages

Compliance assistance ensures your cap table aligns with legal and regulatory standards, including:

• Securities laws: Compliance with securities offerings (e.g., Securities Act of 1933)
• Corporate governance: Equity distribution is managed in alignment with corporate governance rules detailed in your corporate charter, operating agreement, and bylaws
• Data privacy: Managing investor information in accordance with privacy laws like GDPR and CCPA
• Tax laws: Ensuring stock options, restricted stock, equity instruments comply with IRS guidelines

Non-compliance can lead to:

• Legal penalties: Fines, sanctions or legal actions for violating securities or tax regulations
• Investor distrust: Inaccurate cap tables or failure to comply with governance can hinder future fundraising
• Ownership disputes: Errors may result in disagreements over equity stakes
• Unexpected tax liabilities: Mismanagement of stock options or equity instruments can trigger tax liabilities for the company or its employees

Stock options and equity grants must comply with specific legal requirements:

• Securities laws: Some equity grants may need registration or special exemptions
• Tax laws: Different types of equity awards, like Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NSOs) have distinct tax implications for the company and employees
• Vesting schedules: Proper documentation vesting schedules ensures compliance with company policies and IRS rules
• Board approvals: Equity grants require formal approval from company's board

Fin-Stock, by FinStackk, is a digital capitalisation (cap) table management platform designed to:

• Help companies and investors manage share ownership and equity distribution, stock options, and other shareholder-related tasks
• Simplify equity issuance and ownership tracking
• Improve shareholder communication with auto updates

Fin-Stock ensures seamless compliance with securities regulations by:

• Automatically generating necessary regulatory reports
• Managing shareholder information securely
• Addressing local reporting requirements
• Providing tax-related documentation