It is easy to overlook the value of cap or equity table management. Maybe you assign it to a lawyer and do not have to think about it very often. Or perhaps you see it as yet another spreadsheet that just gets more difficult to understand the longer you are in business. However, a capitalization table is one of the pillars of business intelligence that adds to your company’s success and progression. Like a financial statement or inventory tracker, a cap table requires someone at the helm to execute decisions based on its information, software to automate data processes, and security measures to control access.
Information and Execution
Assigning a person or team to your cap management is a way to make it a central part of your business. An executor will ensure that your records include all stocks and their owners. As your business grows, your cap tables will expand to cover more transaction details.
- Exercises of stock options
- Transfers
- Conversion of debt to equity
- Percentage of shares
What Software Does
Caps management software automates many functions that you perform in equity management, therefore increasing security and decreasing vulnerability to errors by manual data entry. Your accuracy will also improve from a reduction in mathematical errors. If you have made extensive use of spreadsheets in the past, you understand that one mistake can compound into several blunders and become almost impossible to find later. Using software eliminates such hiccups. Automated reports not only save valuable time but also strike stakeholders with a sense of your professionalism. Finally, you can handle increasingly complicated equity structures and systems with caps management software.
Security Measures
A comprehensive Cap Table Management system must implement security measures to remain compliant and maintain privacy. Regardless of whether you use automated software yet or still rely on manual input, you must determine who will have access to your company’s equity data. Usually, you will have one person who takes ownership of your caps and has free access along with tremendous responsibility to prevent breaches. As your business grows, that person may turn into a team of two or more. Between you and your caps owner, you can determine or set the software to restrict all but specified access to sensitive information. You would apply limitations to both employees of your company and shareholders on the information you share.
Cap Table Management Resources
If you need a good software program or other aids for your business’ equity or cap management, contact Colonial Stock Transfer Company, Inc. at website to schedule a demo.
