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Faces of Modern CFO's
Cap Table Management

Why Equity Management Matters

Graham McConnell


March 11, 2020

We spend a lot of time talking to private companies, from traditional decision-makers like owners, founders, and CFOs to essential influencers like HR managers. But no matter who we are speaking with, one of the biggest pain points we continue to hear is the difficulty of managing equity. 

Maybe that should come as no surprise as there are so many different flavors of equity, each with their own implications. So where do you go for support? Apart from going to a specialist, and paying a premium for personalized advice, there’s really no great way to get access to reliable information on the many components of equity management. Sure, you can dig around and find some advice online, but most businesses have their own unique preferences and situational requirements. 

Equity has gotten incredibly complicated, and therefore inaccessible to owners, investors, and employees. If it were made simpler and easier to issue, grant and control, then it would be far more appreciated and valuable to all involved. With this idea in mind, we started Nth Round.

So, why is equity management so important to successful businesses today?

  • With unemployment at historic lows, businesses need to use equity to remain competitive in hiring and maintaining critical talent.
  • Employees significantly discount their equity, partly because they don’t fully understand it, but also because they don’t know if it will ever be worth anything.
  • Private business owners want to grow their companies while retaining control and driving their own destiny.
  • Today’s demands of a business owner are increasing rapidly making it more and more difficult to keep up with managing shareholders.

Equity can have long-term implications for businesses, so making the right decisions early on is vital. What we provide at Nth Round is an equity management platform to help businesses of all stages make those decisions at issuance, as well as manage their equity going forward, in a secure and cost-effective way. By building a flexible and simple solution for company owners and their shareholders, we’re helping companies ensure long-term alignment, growth and success.

We find that many businesses still manually use an excel spreadsheet as their cap table to keep track of ownership, which can get complicated and out-of-date as the company grows. Whether you’re issuing equity after raising capital—or issuing stock options, warrants, restricted stock, RSUs or SARs (the list goes on) to employees—there are key events that need to be triggered to keep the company cap table up-to-date. In the case of vesting schedules, simply celebrating an anniversary can invigorate the recipient. When vesting is complete, both the company and the employee should be made aware so that the appropriate action can be taken. Our equity management platform helps alleviate these types of concerns by housing the cap table, managing access, and keeping it updated all within one environment.

When the time comes to communicate with shareholders, one-off emails or mass mailings aren’t just cumbersome for the company, but can also come across as impersonal to recipients. These are people who have invested valuable time and money into the business. They should at least be able to expect personalized and warm interactions in return. These are vital interactions that our equity management platform addresses head-on. It allows you to delight your shareholders with personalized updates and a custom investor portal that not only memorializes their ownership, but connects them to the growth and progress of the company.

A final cornerstone of equity management is liquidity. If liquidity becomes a focus of your business and your shareholders, Nth Round is here to help. A highly-secure, invitation-only trading platform solely for your company’s stock can be spun up and made available to shareholders 24/7. As part of our larger equity management platform, our liquidity solution avoids the extreme cost of creating a secondary market and allows you to provide it at no added cost.

Our dream of creating a turnkey equity management platform that’s accessible to companies of all sizes is now a reality. Call or visit us today to learn more about how we can help you to delight your shareholders and power up your equity!

Take the Nth Round Assessment to see how we can help