Product Update – April 2024
Greetings everyone!
It’s been a while since we provided an update but we have been working hard to develop and launch very important new features and services. Today, we’re excited to announce two major new features and services that will continue to streamline equity management for startups and private companies. First, we’ve introduced detailed tracking for trusts and special purpose vehicles (SPVs), allowing you to capture individual stakeholder ownership within these entities. Second, we now offer independent Fair Market Value (FMV) and 409A valuation reports, ensuring tax compliance and maintaining investor confidence.
What’s New
1. Trusts and SPVs – Detailed breakdowns are here!
Trusts and SPVs play a crucial role in the startup world, consolidating capital from multiple investors and stakeholders. Our new functionality lets you track not only the total shares held by a trust or SPV but also the detailed breakdown of individual stakeholder ownership within these entities.
This feature provides unparalleled transparency, allowing you to maintain a clear overview of your cap table while ensuring individual stakeholders have visibility into their ownership.
Our functionality allows users to see not only the total number of shares under one SPV but also the detailed breakdown on individual stakeholder level. The main advantage of this functionality is that every individual stakeholder even being the part of SPV can have an individual optional access to the platform to see their holdings.
A Trust or Special Purpose Vehicle (SPV), also known as a Special Purpose Entity, is a legal entity used to consolidate capital from multiple stakeholders, often for investment purposes. It allows individuals to pool their resources and invest collectively, offering individual stakeholders access to their holdings within the entity.
SPVs can be pooled funds that are then invested in startups or new businesses. Unlike traditional investment funds, where multiple investments occur over time, SPVs typically make a single investment into a specific business. This structure allows investors to overcome the minimum entry requirements to make an investment.
We have seen many companies set up trusts or SPVs for investors or employee share options and ask us to help track the individual stakeholders. As a result, we have answer the call.
How it works
Any non-individual stakeholder can be SPV and any individual stakeholder can be a part of SPV. Our platform offers flexibility of assigning per certificate basis, whether it is a part of SPV or not.There is no restriction on maximum number of SPVs under one company and number of certificate to belong to SPV.
In this screenshot, the certificate CSB-2 is assigned to SPV named “SPV Main Fund 1”.
SPV functionality can clearly demonstrate on the cap table the overall percentage under SPV as well as breakdown on Individual stakeholder level.
In this cap table, it can be clearly seen that SPV Main Fund 1 has 5 certificates under it. We can also see a detailed breakdown of % by individual stakeholder level which are part of SPV.
The key advantages include:
- Individual stakeholder access to view their holdings within the trust/SPV
- Flexibility to assign certificates as part of a trust/SPV on a per-certificate basis
- No restrictions on the number of trusts/SPVs or certificates associated with them