Startups
Auto Added by WPeMatico
StepLadder, the collaborative deposit saving platform for first-time buyers, raises £1.5M
StepLadder, another London-based startup aiming to help so-called “generation rent” get onto the housing ladder, has raised £1.5 million in seed funding.
Backing the round is Spanish banking giant BBVA and fintech VC Anthemis via the London-based venture studio on which the pair have partnered. Early investor Seedcamp also followed on, in addition to unnamed angel investors.
StepLadder says it will use the new capital and support provided by BBVA/Anthemis to further develop its “collaborative finance platform.” The startup is also eyeing international expansion.
Founded in 2015 by Matthew Addison and joined by Lucy Mullins and Mihir Bhushan, StepLadder’s collaborative deposit saving platform is designed to motivate renters to save for a deposit so they can purchase their first home.
Using a financial model known as a “Rotating Credit and Savings Association” (ROSCA), StepLadder puts its members into “Circles,” whereby each individual member contributes an identical amount on a monthly basis — ranging from £25 to £1,000. A random draw then takes place each month and the winner is provided with that month’s full pot to use toward their deposit.
“For most first-time buyers, it’s really difficult to get on the property ladder,” says Addison. “Home ownership rates amongst 25 to 34-years-olds have collapsed… [with around] 250,000 fewer first-time buyers every year, for over a decade, in the U.K. alone. Raising the deposit is the biggest hurdle. At StepLadder we’re using something called a ROSCA, a form of collaborative finance where people work together in groups to help our members raise their property deposits, on average, 45% faster.”
As an example, StepLadder might match you to a £500 a month Circle for 20 months to raise £10,000. This would see it find 19 other members to be in the same Circle. “Each month the £10,000 is randomly allocated and you could be drawn at any point in that 20 months,” explains StepLadder’s Lucy Mullins. “You have to keep making your £500 a month payment for the full 20 months, so at the end everybody has paid in £10,000 and everybody has received £10,000.”
To help protect the platform from being abused, Mullins says that while a member is still part of a Circle, the startup will only release the pot to their solicitor for use as a property deposit. “So, if somebody stops paying after they have been drawn then we wouldn’t release their payout until they had made catch-up payments.”
StepLadder also supports members along the house-buying journey. The app lets members engage with a community of like-minded people and access group-buying discounts on services such as mortgages, solicitor fess and surveyors. The latter forms part of the company’s revenue stream.
“We introduce our members (at their request) to high-quality service providers, such as mortgage brokers, lending banks, surveyors and insurance providers,” says Addison. “In return, these partners pay us fees or commissions. We offer discounts on these transaction services via the combined buying power of our members in their Circles.”
In addition, there is a small monthly fee (between 2-5%) to be part of a Circle, which Mullins says covers the cost of delivering the service.
This includes holding money securely in a client money account, a payment waiver if a member were to become sick or unemployed after buying a property with their StepLadder deposit, credit bureau costs and the cost of a Circle host to support members on the journey.
“We do not aim to profit from the monthly administration fees we charge members and would usually be able to save our members much more in discounts than they pay in fees,” says Mullins.
Meanwhile, StepLadder has plans to expand the use cases for Circles and evolve the platform to also cover general savings goals and targeted “big ticket items.”
Explains Addison: “In Brazil, ROSCAs are used by nine million consumers for everything from dishwashers to cars to homes. We have already begun to demonstrate this potential with both our First Step offering (smaller circles from £25 a month) and proposed partnered launches.”
Powered by WPeMatico
Lotame unveils Cartographer, its new approach to tracking user identity
Lotame, a company offering data management tools for publishers and marketers, today unveiled a new product called Cartographer — described by CMO Adam Solomon as “our new people-based ID solution.”
In other words, it’s Lotame’s offering to help businesses connect their visitor and customer data across platforms and devices.
We’ve written about plenty of other cross-device targeting technologies — and in fact, Lotame acquired one of them, AdMobius, in 2014. But Solomon said the landscape has become more challenging given privacy regulations and especially updated browsers that place new limits on the types of cookies that can be used to track users.
“There’s been an explosion of first-party cookies,” Solomon said, referring to cookies that are stored on the domain you’re actually visiting (as opposed to third-party cookies, which are increasingly blocked).
He argued that these “short-lived” cookies then create problems for publishers: “If you’re in Safari visiting the same site every day, a new ID could be generated” each day. So Cartographer deals with this by using data science and machine learning to attempt to “cluster” different IDs together that likely belong to the same user.
“Every day when we see an ID, we’ll capture it,” Solomon said. “We’re graphing those cookies together, these dozens or hundreds of cookies that we believe, based on our technology, that these cookies belong to the same individual.”
He also said that connecting IDs in this way is crucial to the whole “Russian nesting doll” of how a publisher or advertiser understands identity on the internet: “Cookies ladder up to devices, devices ladder up to people, people ladder up to households.” So by connecting cookies to people, Lotame can also offer better household-level data.
And far from being an attempt to circumvent privacy restrictions, Solomon argued that Cartographer actually makes it easier for publishers to stay compliant with Europe’s GDPR and California’s CCPA rules, because they can do a better job of storing a customer’s privacy preferences.
Grant Whitmore, chief digital officer at Lotame customer Tribune Publications, made a similar point: “One of the things that I think all publishers are wrestling with right now is really the disconnect that is occurring in the adtech landscape and the legislative landscape and really managing the persistence of that consent.”
Whitmore continued, “One of the unintended consequences of that legislation and some of what is happening in the browser space is that we could be forced into a position where we are having to ask you every single time you visit a site whether it’s okay to sell your data, whether it’s okay to track.”
And he said that’s one of the big reasons Tribune is deploying Cartographer across all its properties, including its nine core newspaper sites. Though he acknowledged that it’s more broadly useful too.
“From the standpoint of our core business, getting a more complete picture of who a user is across these device types … That is of ongoing importance to us,” Whitmore said. “As we fight in this very competitive landscape, our ability to bring our understanding of who a user is, what their interests are … and providing good solutions — whether on the advertising front or whether that’s handling digital subscription offers — is just table stakes at this point.”
Solomon, meanwhile, said that Cartographer’s benefits go beyond “just figuring which IDs cluster together to represent an individual,” because it’s also ensuring that there’s proper ID synchronization with other data and ad-buying platforms.
“We make sure there’s maximum connectivity, maximum dial tone, with all the ecosystem participants,” he said.
Powered by WPeMatico
GameClub offers mobile gaming’s greatest hits for $5 per month
Apple Arcade introduced the idea of all-you-can-eat subscription-based mobile gaming to the mainstream. Google Play Pass soon followed as a way to subscribe to a sizable collection of both apps and games on Android devices. Today, a startup called GameClub is launching in the U.S. to offer an alternative. For $4.99 per month, mobile consumers will be able to access a library that includes some of the best games to have ever hit the App Store.
To be clear, GameClub is not a cloud gaming platform, like Google Stadia. It’s a way to subscribe to actual App Store games, similar to Arcade. In GameClub’s case, however, the focus is not on new releases but on quality games that already have proven track records and high ratings.
In fact, many GameClub games have made Apple’s own editorially selected “Game of the Year” lists in years past. And like the games offered on Apple Arcade, they don’t have ads or any in-app purchases.
At launch, GameClub’s library includes more than 100 titles, with around half that available for play today. More titles will roll out on a weekly basis in the months ahead. Combined, the games have over 100 million collective downloads, the company says.
On GameClub, you’ll find games like: Super Crate Box, Hook Champ, Mage Gauntlet, Space Miner, Forget-Me-Not, MiniSquadron, Plunderland, Pocket RPG, Sword of Fargoal, Incoboto, Tales of the Adventure Company, Hook Worlds, Orc: Vengeance, Mr. Particle-Man, Legendary Wars, Deathbat, The Path to Luma, Grimm, Zombie Match, Faif, iBlast Moki 2, Kano, Baby Lava Bounce, Run Roo Run, Gears and many others.
It’s a selection that extends across gaming categories, like Action, Arcade, Puzzle, Adventure, Platformer, Retro, Role Playing, Simulation, Strategy and more.
To use the service, you first download the main GameClub app, which becomes the hub for your GameClub activities. You then sign up for the $4.99 per month subscription, which includes a 30-day free trial. Within the main app, you can browse the available titles as well as read editorial content like in-depth overviews and histories, get tips and learn about gaming strategies.
The startup was founded last year by game industry vets Dan Sherman and Oliver Pedersen.
Sherman, GameClub CEO, has worked in the gaming industry for around 17 years, including time spent at EA and his own startup, Tilting Point. His experience has involved, predominantly, signing content partnerships with game creators. Pedersen, meanwhile, built backend systems and platforms for games, including at Yahoo Games.
Though GameClub is seemingly arriving after Apple Arcade’s debut, it actually began before that. The startup was founded in 2018, ahead of any Apple Arcade rumors. It went live on iOS outside the U.S. before Arcade launched.
The founders say they were inspired to address the issues caused by the free-to-play model that has infiltrated the gaming industry. In addition, they had witnessed a decline in consumers’ willingness to purchase content upfront, which was impacting the industry.
“I was seeing all these amazing game developers leave mobile because the types of games they make are not the types of games that monetize through in-app purchases and ads,” Sherman tells TechCrunch. “The free-to-play model actually only works for a handful of genres,” he explains. “A lot of companies make a lot of money through a very small number of genres and game experiences — to the exclusion of a lot of other types of genres that GameClub is bringing back — action, adventures, arcade, tower defense — anything that can be completed.”
With free-to-play, games are built around perpetual retention loops. “And the freemium model comes out of the casino industry, not the premium game industry,” Sherman points out.
But because this is how games could make money, it led to homogeneity in the marketplace, he says.
GameClub aims to offer a subscription to the premium games that got left behind.
They are meant to be wholesome and fun, not overly addictive. They’re not designed to manipulate you into spending money. You simply pay your subscription fee every month to access the catalog, then play unencumbered.
Thanks to Apple Arcade and Google Play Pass, consumers are now comfortable with the idea of the subscription model for mobile games. And other services — like Spotify Netflix, and Xbox Game Pass, for example — have pushed the idea of subscription access to content across platforms and genres.
GameClub is different from Arcade, however, because it’s not funding the development of content upfront — at least, not yet. Instead, it’s forging agreements with largely indie developers to release their existing IP as a GameClub exclusive.
This may include bringing an older game into the 64-bit era — something GameClub handles on their behalf.
“Many of [the GameClub titles] have been gone for many years,” says Sherman. “It’s with our team, our technology and our developers that they’ve been brought back. And they’ve been brought back in a way that is 100% using the original code and the exact same design…but making them look and feel new, with higher resolution, Retina Display assets and by optimizing for the latest screen sizes and configurations,” he adds.
The company doesn’t discuss the business model for GameClub, but it’s not the same as Apple Arcade’s pay-upfront model.
What Sherman could say is that the more important the game is to the GameClub service, the more money the creator makes. Additionally, GameClub says it’s transparent with developers about its subscription revenue, so there’s no question about which games are earning or why.
The same can’t be said for Apple Arcade, which is a total black box to the point that consumers don’t know which Arcade games are most popular, developers can’t see how they’re doing compared with others and third-party measurement firms have no data.
Of course, there could be concerns that GameClub exists in a gray area, with regard to App Store policy. Those with longer memories may recall that Apple banned app-stores-within-a-store starting back in 2012. The company had kicked out apps that recommended other apps like AppHero, FreeAppADay, Daily App Dream, AppShopper and more. It also banned the more popular app recommendation service AppGratis the following year.
But Apple’s concern was that these apps were leveraging their power to manipulate App Store charts and rankings, often charging for that service. GameClub, on the other hand, plays fairly. Its service also benefits Apple, by offering subscription access to quality games that couldn’t thrive as free-to-play titles.
Longer-term, GameClub wants to produce its own original content and offer its service across platforms, starting with Google Play, but eventually tackling PC and console gaming.
The startup is headquartered in New York City, with offices in Copenhagen. In addition to the founders, it includes Eli Hodapp, the former editor-in-chief of the popular game news and review site TouchArcade, and COO Britt Myers, the former chief product officer of subscription-based edtech apps platform Homer.
With the close of a seed round last week, GameClub is backed by $4.6 million in funding.
Investors from a round that closed last year include GC VR Gaming Tracker Fund, CRCM Ventures, Watertower Ventures, Ride Ventures, BreakawayGrowth Fund and others. New investors include GFR Fund, Gramercy Fund, Century Gold and others.
GameClub is available on the App Store.
Powered by WPeMatico
Mobile banking app Current raises $20M Series B, tops half a million users
Mobile banking app Current, which began as a teen debit card controlled by parents, expanded to offer personal checking accounts earlier this year. Now the company says it has grown to host more than 500,000 accounts on its service and has closed on $20 million in Series B funding to further its growth.
The round included new investors Wellington Management Company, Galaxy Digital EOS VC Fund and CMFG Ventures — the venture capital arm of the CUNA Mutual Group, a mutual insurance company serving credit unions and their 120 million members. Returning investors included QED Investors, Expa and Elizabeth Street Ventures.
The first version of Current, which debuted in 2017, was focused on giving parents a more modern way to dole out allowances and reward their kids for chores. But over time, the product became more like a real bank account for teens, culminating with the addition of routing and account numbers late last year. This allowed working teens to direct their paycheck to Current, as they could with a traditional bank.
This year, Current launched personal checking using the same core technology powering its teen banking product. The product includes features like faster direct deposits, gas hold crediting and merchant blocking without charging overdraft fees, hidden fees or requiring minimum balances.
While the teen checking account users have an average age of 15, the average age for the new personal checking account users is 27.
Although personal checking was only launched in late January, it already accounts for about half of Current’s accounts. It also benefits from conversions from Current’s teen users who turn 18 and want to graduate to their own banking app. (Around 98% of teens on Current move to the personal checking app when they come of age, the company noted.)
This puts Current in a more competitive market, where a number of banking apps are now targeting a younger, more mobile generation that has begun to favor modern, feature-rich apps over brick-and-mortar banks. Among its rivals are apps like Step, Cleo, N26, Chime, Simple, Stash and others.
Like many in this space, Current isn’t actually a bank — its banking services are provided by Choice Financial Group and Metropolitan Commercial Bank, which allows it to offer FDIC insurance up to $250,000. Instead, many of the banking apps focus instead on the feature set and user experience they can offer.
Both of Current’s products include a Visa co-branded debit card tied to the Current account. Along with the funding, Current and Visa are also announcing an expanded joint marketing partnership, which will help Current reach new customers.
“We believe everyone should have access to affordable financial services that improve the chances for a better life,” said Stuart Sopp, Current founder and CEO. “We have made this a reality through rebuilding financial infrastructure with the Current Core. It allows us to build more products that offer new ways to interact with money. Our rapid growth to half a million accounts serves as a testament to the ways our products and cost savings are bringing better financial outcomes and we anticipate bringing those benefits to over 1,000,000 customers by mid-2020.”
The company is planning to launch more features starting next year, including a cash-back system with brands and merchants in Q1, and further down the road, it’s considering things like a credit product and maybe Bitcoin investing. But this will require further education and careful attention to do well.
“It’s expensive to be poor — it really is,” he says. “If you don’t have much money, you’re paying 30% or 35% for your credit, whereas if you’re rich you’re paying 5%. So it’s like the world is inverted for you and it holds you down,” Sopp says. “So if we were to do [credit], we are going to do it right.”
In the near-term, the focus is on offering better budgeting tools and more ways for users to save money. This, Sopp argues, is what Current’s young users need most.
To date, Current has raised $45 million in funding.
Powered by WPeMatico
Grafana Labs nabs $24M Series A for open source-based data analytics stack
Grafana Labs, the commercial company built to support the open-source Grafana project, announced a healthy $24 million Series A investment today. Lightspeed Venture Partners led the round with participation from Lead Edge Capital.
Company CEO and co-founder Raj Dutt says the startup started life as a way to offer a commercial layer on top of the open-source Grafana tool, but it has expanded and now supports other projects, including Loki, an open-source monitoring tool not unlike Prometheus, which the company developed last year.
All of this in the service of connecting to data sources and monitoring data. “Grafana has always been about connecting data together no matter where it lives, whether it’s in a proprietary database, on-prem database or cloud database. There are over 42 data sources that Grafana connects together,” Dutt explained.
But the company has expanded far beyond that. As it describes the product set, “Our products have begun to evolve to unify into a single offering: the world’s first composable open-source observability platform for metrics, logs and traces. Centered around Grafana.” This is exactly where other monitoring and logging tools like Elastic, New Relic and Splunk have been heading this year. The term “observability” is a term that’s been used often to describe these combined capabilities of metrics, logging and tracing.
Grafana Labs is the commercial arm of the open-source projects, and offers a couple of products built on top of these tools. First of all it has Grafana Enterprise, a package that includes enterprise-focused data connectors, enhanced authentication and security and enterprise-class support over and above what the open-source Grafana tool offers.
The company also offers a SaaS version of the Grafana tool stack, which is fully managed and takes away a bunch of the headaches of trying to download raw open-source code, install it, manage it and deal with updates and patches. In the SaaS version, all of that is taken care of for the customer for a monthly fee.
Dutt says the startup took just $4 million in external investment over the first five years, and has been able to build a business with 100 employees and 500 customers. He is particularly proud of the fact that the company is cash flow break-even at this point.
Grafana Labs decided the time was right to take this hefty investment and accelerate the startup’s growth, something they couldn’t really do without a big cash infusion. “We’ve seen this really virtuous cycle going with value creation in the community through these open-source projects that builds mind share, and that can translate into building a sustainable business. So we really want to accelerate that, and that’s the main reason behind the raise.”
Powered by WPeMatico
Cybersecurity automation startup Tines scores $4.1M Series A led by Blossom Capital
Tines, a Dublin-based startup that lets companies automate aspects of their cybersecurity, has raised $4.1 million in Series A funding. Leading the round is Blossom Capital, the venture capital firm co-founded by ex-Index Ventures and LocalGlobe VC Ophelia Brown.
Founded in February 2018 by ex-eBay, PayPal and DocuSign security engineer Eoin Hinchy, who was subsequently joined by former eBay and DocuSign colleague Thomas Kinsella, Tines automates many of the repetitive manual tasks faced by security analysts so they can focus on other high-priority work. The pair have bootstrapped the company until now.
“It was while I was at DocuSign that I felt there was a need for a platform like Tines,” explains Hinchy. “We had a team of really talented engineers in charge of incident response and forensics but they weren’t developers. I found they were doing the same tasks over and over again so I began looking for a platform to automate these repetitive tasks and didn’t find anything. Certainly nothing that did what we needed it to, so I came up with the idea to plug this gap in the market.”
To that end, Tines lets companies automate parts of their manual security processes with the help of six software “agents,” with each acting as a multipurpose building block. Therefore, regardless of the process being automated, it only requires combinations of these six agent types configured in different ways to replicate a particular workflow.
“I wanted there to be as few agent types as possible, to simplify the system, and I haven’t discovered a workflow in which tasks sit outside of these agents yet,” says Hinchy. “Once a customer signs up they can start automating their own workflows immediately, and most of our customers see value from day one. If they need a hand, my team works with them to establish how they currently manually carry out tasks, such as identifying and dealing with a phishing attack. Each step of dealing with the attack — from cross-checking the email address with trusted contacts or a blacklist, to scanning attachments for viruses or examining URLs — will be performed by one of the six agent types. This means we can assign these tasks to an agent to create the workflow, or as we call it, the “story.”
So, for example, once a phishing email triggers the first agent, the following steps in the “story” are automatically carried out. In this way, Tines might be described as akin to IFTTT, “but an exceptionally powerful, enterprise version of the IFTTT concept, designed to manage much more complex workflows.”
Competitors are cited as Phantom, which last year was acquired by Splunk, and Demisto, which was bought by Palo Alto Networks. However, Hinchy argues that a key differentiator is that Tines doesn’t rely on pre-built integrations to interact with external systems. Instead, he says the software is able to plug in to any system that has an API.
Meanwhile, Tines says it will use the new funding to hire engineers in Dublin who can help improve the platform through R&D, as well as grow its customer base with companies in the U.S. and in Europe. Notably, the startup plans to expand beyond cybersecurity automation, too.
“Our background is in security, so with Tines, we’ve initially focused on helping security teams automate their repetitive, manual processes,” says Hinchy. “What makes us different is that nowhere does it say we can’t expand beyond this, to help other teams and sectors automate tasks. The advantage of our direct-integration model is that Tines doesn’t care if you’re talking to a security tool, HR system or CRM, it treats them the same. In the next 18 months, we plan to expand Tines outside security, hire more talent and increase the product team from 8 to 20.”
Powered by WPeMatico
Revolut launches publicly in Singapore, signs deal with Mastercard
London-based fintech startup Revolut has two pieces of news to announce this week. First, Revolut is expanding to Singapore after a long beta period. The company already has 30,000 customers there and anyone can open an account now.
Singapore residents will be able to take advantage of all of Revolut’s core features. You can open an account from your phone, get a card and start spending anywhere in the world.
Revolut supports Singapore dollar as well as 13 other currencies. You can top up your account, and send and receive money from the app.
With a free account you can convert money in the app without any markup fee on weekdays up to S$9000 per month. You can also withdraw money anywhere in the world without any fee, up to S$9000 per month.
Premium accounts cost S$9.99 per month and Metal accounts cost S$19.99 per month in Singapore. You get higher limits and a few additional features with Metal.
Revolut is currently available in the U.K., Europe and Australia. There are 7 million Revolut customers in total. The company is still working on its launch in the U.S. and Canada for later this year.
The other piece of news is that Revolut has signed a global partnership with Mastercard. Revolut has already been working with Mastercard to issue cards, so this is an expansion of the current deal.
Revolut can now issue cards that work on the Mastercard network in any market where Mastercard is accepted, which represents around 210 countries. It doesn’t mean that Revolut will launch in 210 countries. But the startup says that the first Revolut cards in the U.S. will work on Mastercard.
It also doesn’t mean that Revolut will work exclusively with Mastercard. The company also works with Visa and recently announced a partnership deal. But at least 50% of all existing and future Revolut cards in Europe will be Mastercard branded.
It shouldn’t matter much to end customers, as I have yet to see a place that accepts Mastercard but not Visa, or Visa but not Mastercard. But Revolut is clearly using market competition to its advantage.
Powered by WPeMatico
6 considerations for managing your cap table
Jared Verzello
Contributor
Contributor
Jared Verzello is a startup and venture capital lawyer and GM of Atrium Seed where he guides companies through formation, fundraising, hiring, and managing board meetings.
More posts by this contributor
Founders start a company because they have an idea they want to bring to market. As their company gains traction and matures, the way in which they manage their business needs to evolve to enable strategic decisions for growth.
Developing and properly managing a capitalization table (cap table) is one such necessary business evolution. In this context, capitalization is the sum and itemization of all those who hold equity in the company or the right to receive equity in the future. Tracking these items through a central means helps illustrate the ownership stakes in the business and what securities the company has outstanding.
For a first-time founder, it can be overwhelming to develop a cap table and make all related decisions. However, with the right resources and adoption of best practices, founders can better manage, maintain and leverage their cap table to provide actionable business intelligence and management.
For better business intelligence, look to your cap table
In many ways, the cap table is akin to the balance sheet in the sense that it represents the company’s position as of a certain point in time. The balance sheet shows the company’s assets and liabilities. The cap table shows the company’s ownership and accompanying economic and voting rights. The cap table includes factors such as shareholder information, ownership position, rights to purchase additional equity in the future, vesting schedules, voting percentages and purchase price. It takes all of the material information related to capitalization and summarizes it into a digestible format to help founders make executive-level decisions for soliciting stockholder approvals, issuing grants to new hires, raising additional rounds of financing, calculating liquidation waterfalls for a liquidity event, etc.
When it comes to how much founders need to own the cap table, think about it this way: Not every CFO needs to build out the financial statements. However, every CFO needs to have a high degree of confidence that their financial statements are accurate — with systems in place to ensure accuracy so they can spend their time using the financial statements to make strategic decisions. The same is true for founders’ involvement with their cap tables. Most companies rely on competent legal counsel to maintain their cap table and provide their executive team with actionable information in a digestible format.
Here are six best practices that help founders improve and maintain an effective cap table management process.
1. Familiarize yourself with its basic elements and formats
There are many different elements and formats of a cap table. Viewed as a spreadsheet, table or chart, the cap table can look different for every company at every stage of its growth. While the cap table tends to be simple in the beginning stages of the company, it will naturally evolve and become much more complicated as the company matures.
At a basic level, the cap table should list the equity stakes in a company, including common stock, preferred stock and stock options, and outline all of the ownership details for these securities. Other elements include transaction history and legal restrictions, such as sales, transfers, exercises of options, transfer restrictions and the conversion of debt to equity, among others.
The cap table should show the company’s overall capital structure at a glance, as well as detailed ownership information for each class and series of stock outstanding (see an example at the end of this article). Most importantly, it should always be accurate and up to date.
2. Recognize the importance of executive alignment
At its core, the cap table should be designed to help solve business issues for you. If you’re not using it to make decisions as an executive team, then it’s not serving a core purpose. The cap table is also critical to your legal team, so certain aspects may be primarily for their use, but if the company’s management doesn’t find the cap table helpful, that is a problem.
Creating good habits early on will serve you well as the business grows.
A good example of this is its role in the hiring process. Equity is a key consideration in talent recruitment and retention packages. Without an accurate cap table, you’ll find yourself in situations where you have to routinely ask yourself how many shares you can offer to a new hire, which can unnecessarily slow down the hiring process.
However, if you can use the cap table as a way to gain alignment on such matters, you can begin to use it to solve actual business problems. Rather than argue about which equity package to grant a new employee, your HR team can provide routine feedback on standardized equity packages to help improve or maintain competitive compensation.
3. Evaluate and implement tools to help you manage it
When it comes to understanding how detailed your cap table needs to be, compare it once again to the financial statements. In the early days of the business, financial statements don’t necessarily feel as valuable as they do in later stages of growth. They aren’t as critical to the business — yet — because it’s not hard to recreate it whenever you need information to make a decision.
However, as the business matures and grows, it becomes more difficult to recreate the financial statement on an ad hoc basis, and virtually impossible to hold the information accurately in your mind. The same holds true with the cap table: In the beginning, you might be able to rattle it off the top of your head or have it documented simply in Excel, but as you grow, the information becomes more complex and you need better, automated systems in place. As with financial statements, creating good habits early on will serve you well as the business grows.
Using cap management software provides better capabilities and version control than spreadsheets to manage this process. Free software, such as captable.io and Carta are great starting places for early-stage founders. Carta also provides additional features to manage your more complex cap table. Because the cap table’s ultimate purpose is to enable the executive and legal teams to make informed decisions, safeguards on administrative access and version control are critical features to consider when choosing which tool or application to use.
4. Determine and delegate ownership of the cap table
As you model new rounds of financing and analyze the impact on stakeholders, cap table management becomes a significantly valuable activity. This is where your legal team or outside counsel becomes even more advantageous to you as a founder. Delegating cap table management to your lawyer can further help you stay on top of critical changes and minimize errors, while enabling you to focus more on building and scaling the business. Creating and maintaining an accurate cap table requires an ability to read, understand and translate legal documents into numbers and formulas. It is best to rely on the expertise of your legal team for this to ensure the most accurate business decisions are made.
Your cap table should be well-managed, well-understood and up-to-date.
We frequently see founding teams make seemingly small mistakes, such as adding an individual’s name to the cap table before an equity grant has legally been made. This may lead one to believe that more stock is outstanding than is technically the case and can create errors when calculating the number of shares to be granted to subsequent stockholders — or miss making the grant altogether, which can have unfortunate tax consequences for the stockholder and potential liability for the company. Order of operations is critical to legal workflows and it’s best to leave the day to day cap table maintenance to your legal team.
5. Decide how much information to share with investors
When it comes to how much cap table information you should disclose to your investors, there isn’t a right or wrong answer. Commonly, providing investors with a summary cap table is a fairly standard practice. That allows investors to calculate their ownership position for their internal tracking and audit purposes. More often than not, investors don’t receive an itemized list of every shareholder or investor in the company. While preferences differ on this point, many of our clients prefer that any company-related discussions are directed to the executive team so they can address and control messaging. Of course, in many instances investors will know which of their peers have also invested, but sharing detailed equity positions, contact information and individual employees’ equity stakes is less common.
In Carta, investors generally have portfolio views with visibility into all of their companies. They might send you a request for access to your cap table so they can add you to their portfolio. In this scenario, the summary cap table is the most common approach people default to for the investors. If an investor feels strongly about receiving detailed cap table viewing privileges, they can make their case to the company, which may consider the request on an individual basis.
Major investors will typically have specific, private contractual rights to get regular financial statements and cap table updates. They might even have a representative who is a board observer or board member, in which case, they will have access to the information they want, as agreed to in the equity financing paperwork.
6. Choose how much to share with employees
Understanding the appropriate levels of information about your cap table to share with employees is another top consideration for founders. The key to this is determining the balance that you, as a founder, feel comfortable with in terms of employer transparency.
Some founders choose to be transparent about their cap tables and others opt not to disclose much and provide equity information on a need-to-know basis. The important part here is determining how you can best use the cap table to help your employees understand what they need to know.
For example, employees with equity want to understand what their payout is if the company sells. Regular communication or resources that provide employees with access to their holdings and options is a great approach to help motivate employees and improve talent retention, but can have unintended consequences.
For example, most companies will have their common stock valued after each round of financing. Some founders will want to share this number with the team so that people can understand that their stock is appreciating. That is very exciting and motivating — so long as everything is going well. However, if the stock’s appreciation is not meeting the team’s expectation (whether reasonable or not), then providing that information can significantly decrease morale. For this reason, the vast majority of companies choose not to disclose this information to the broader team.
Get proactive with your cap table
Your cap table should be well-managed, well-understood and up-to-date. Fortunately, the management process doesn’t need to become just another headache: With the proper considerations, communication, resources and ownership, you can put the correct processes and legal team in place efficiently, and effectively manage your cap table so it continues to help you scale your business — rather than slow it down.
Sample cap table
This table represents a simple cap table showing a hypothetical breakdown of seed preferred stock, Series A preferred stock, common stock and the available option pool.
All content presented herein is for informational purposes only. Nothing should be construed as legal advice. Transmission and receipt of this information is not intended to create, and does not constitute, an attorney-client relationship with Atrium LLP. There is no expectation of attorney-client privilege or confidentiality of anything you may communicate to us in this forum. Do not act upon any information presented without seeking professional counsel.
Powered by WPeMatico
Koan, launched by a co-founder of Jive Software, has raised $3 million in seed funding
Koan, a three-year-old online platform that aims to help teams achieve their objectives and stay engaged, has raised $3 million in seed funding led by Uncork Capital and Crosslink.
Koan, co-founded and led by CEO Matt Tucker — who previously co-founded Jive Software, an outfit that made social software for businesses and went public in 2011, then sold in 2017 — is trying to set itself apart from the many other performance management tools in the world by catering less to HR departments and targeting instead the chief operating officer or chief of staff.
Though these individuals today rely heavily on emails and spreadsheets — static products that can slow down execution — Koan tries to make them more efficient by providing them with a dashboard that makes it easier to track goals, provide feedback and execute other people-management tasks.
The company is also targeting leaders of small to mid-size companies. The broader idea is to help them with goal management, and to make it easier for them to make progress against their own metrics and goals.
Koan, which integrates with a wide number of third parties, from Salesforce to Slack, employs just 10 people at this point and is based in Portland, Ore., though Tucker works from Palo Alto, where, interestingly, he and his wife also operate a company called Blind Tiger Ice.
Inspired by their international travels to upgrade in some way their local dining (and drinks) experience, the couple’s nearly two-year-old company is becoming known in some tech circles for its “high-quality cocktail ice,” as Tucker describes it. Among its customers: Netflix, Facebook, Google and the world-famous Yountville, Calif.-based restaurant French Laundry.
Every once in a while, too, says Tucker, his worlds collide. Recently, for example, the venture firm CRV called Blind Tiger to order ice for a party it was throwing. The portfolio company it was celebrating: Iterable, a growth marketing startup and also a Koan customer.
Koan has now raised $5 million. Earlier investors include the Webb Investment Network, SV Angel and Spider Capital, all of which participated in the company’s newest round.
Above, left to right: Co-founders Matt Tucker and Scott Campbell, an early salesperson at Jive Software.
Powered by WPeMatico
Truebill raises $15M to build a comprehensive platform for personal finance
Personal finance startup Truebill announced today that it has raised $15 million in Series B funding.
The new funding was led by Eldridge Industries, with participation from Evolution VC and previous investors, including Cota Capital, Lucas Venture Group and YouTube co-founder Jawed Karim.
When the Y Combinator-backed startup raised seed funding back in 2016, it was focused on what Chief Revenue Officer Yahya Mokhtarzada now describes as “a single function” — helping users track all their subscriptions and recurring expenses, and then to cancel them when desired.
Mokhtarzada said the Truebill team subsequently saw an opportunity, given “the increasing degree of financial complexity in people’s lives,” to take “a more holistic view of personal finance.”
Truebill still offers subscription tracking, and Mokhtarzada said that’s usually what brings new users in. But it’s also added capabilities like automated budgeting, automated saving and bill negotiation. And this fall, it plans to launch additional features, including bill pay, credit score monitoring and a rewards program.
Consumers have plenty of other personal finance tools to choose from, but Mokhtarzada said most of them are focused on fulfilling a specific need and will likely become less relevant as your financial situation changes.
“The other half is, if you look at the App Store, it’s filled with single point solutions,” he said. “As your financial life gets more sophisticated and complex, the consumer is ending up with five or more different point solutions. All of that needs to be consolidated into one place.”
Truebill says it currently has 500,000 active users. The basic product is free, then users can pay a price of their choosing for premium features like custom budget categories; Truebill also takes a cut of the savings when it negotiates lower bills.
The company recently opened new headquarters in Silver Spring, Md. Mokhtarzada said Truebill still has an office in San Francisco, but he noted that he and his co-founders/brothers previously built Webs.com in Silver Spring.
“San Francisco obviously has a very competitive market — it’s harder to hire and very difficult to retain talent,” he added. “With the D.C. area, it feels like we’ve found an untapped market, with very talented engineers working for the government, working in an area of technology that’s not very exciting for them.”
Powered by WPeMatico