Capital raising can be stressful enough without spending hours weeping in front of an excel spreadsheet, desperately trying to reverse engineer your cap table. So ideally the cap table is something you have under control before you start a capital raising process.
Our template cap tables are relatively easy to use, but they still require you to do the heavy lifting, and they do assume some knowledge of the mathematical relationships between pre-money valuation, ESOP allocation, conversion of notes and post money valuation.
Your accountant or lawyer may be able to help you get, and keep, your cap table in order. But we all know professional services don’t come cheap. And not every professional is going to be familiar with cap table number-crunching.
Overseas, SaaS cap table solutions have become a popular remedy for this pain point, particularly in the US and Canada. Those SaaS solutions have increasingly become the norm for cap table management and modelling because they offer ease of use and sharing – allowing companies to create their cap tables, keep them up to date, and share them with stakeholders, prospective investors, and professional advisers.
However, the solutions available in the US or Canada don’t easily translate to New Zealand. What works in the US or Canada doesn’t work in New Zealand because, fundamentally, the background legal and tax regimes are different. NZ has no concept of authorized but unissued capital for example, which tends to form the basis of overseas cap table solutions. In New Zealand, your capital (equity) is either issued or it’s not. There is no in-between.
So when it comes to existing SaaS cap table solutions, a New Zealand company can make them work, but it’s time-consuming and the end result is a bit ugly.
Which is where Company Works comes in. Company Works is a New Zealand company secretarial SaaS solution, and they are thinking about expanding their platform to include a cap table module tailored to the needs of local tech startups. We think this is an awesome idea, and we’ve offered to help with some market validation of the concept.
If a SaaS cap table solution sounds like something you’d be interested in, please take some time to complete the survey linked below. Everyone completing the survey goes into the draw to win one of four 6 packs of quality New Zealand wine (two from Company Works and two from Simmonds Stewart). Which is why we’ve had to stop Fiona from filling it out seven times already.
by andrew simmonds, 12 April 2018