Let there be no doubt that a Cap Table software plays a critical role in the strategic decision-making and hiring process of successful companies. The automated software will allow you to view the equity ownership for everyone in your company. As a result, it’s easier to distribute equity among owners, employees, and stakeholders based on accurate business intelligence.
Among the most prevailing debates on Cap Table Management is the disclosure of information to investors and employees. Since there is no standard rule, every owner must decide how much information they are willing to offer to investors and employees. Here is a brief overview of such practices that can help you with such issues:
Information Sharing with Investors
It’s common for companies to share a summary of cap table with their investors. The idea behind this practice is to allow investors a clear picture of ownership so they can make the right decision regarding how and what to invest. Sharing detailed equity positions, equity stake, and contact information of employees is less common.
Information Sharing with Employees
The amount of information to share with employees mainly depends on your appetite for risk and transparency. For instance, many companies re-evaluate their stock values after every new round of financing. Under these circumstances, divulging such information with employees can be contentious because if the stock value is lowered, it can be detrimental to employee morale. In contrast, if the stock price is valued higher, it can positively impact workers.
For more information and valuable tips on cap table management, visit EquityTrack at https://www.equitytrack.co.
