Best equity management software | LTSE Equity

What is equity management software?

Equity management software is an indispensable resource for startup founders and leaders as they navigate the complexities of overseeing equity distribution within their startups. Offering an efficient means to track various forms of equity, such as stock options, restricted stocks, convertible notes, and other securities, equity management platforms provide comprehensive management solutions.

As a startup founder, you may encounter many difficulties when managing equity. Ensuring fair and transparent distribution among co-founders, early employees, and investors can be challenging, and as your startup grow more, manually tracking this information will become impossible to manage.

Equity management software simplifies this process by automating it and minimizing errors, especially compared to a person. It enables simple tracking of cap tables, shareholder details, stock ledgers, investment rounds, and complex scenarios like exits, funding rounds, or equity dilution. 

Equity management software also creates transparency, which is also crucial in building trust among stakeholders. Startup leaders can provide real-time updates to shareholders on the equity stakes they hold, allowing everyone involved in a deal to remain on the same page.

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When do startups need equity management software?

For startups at various stages of their lifecycle, equity management software becomes necessary at different points. Recognizing when to incorporate it is crucial to ensure smooth business operations and maintain transparency among stakeholders.

In the early stages of a startup, managing equity should seem relatively straightforward.

However, it's at this crucial phase where you set the foundations for your equity structure that will influence your future growth and success. Even at the seed stage, startup founders need to consider factors like how to divide equity among co-founders, early employees, and potential investors.

With just a few shareholders, manual record-keeping might seem doable. But as your startup grows, these records can quickly become unmanageable. Implementing equity management software at this stage ensures accurate record-keeping from the start, setting a precedent for transparency and efficiency.

Once your startup reaches the Series A funding stage, the number of shareholders typically increases significantly.

You're now dealing not just with co-founders and early employees but also institutional investors who have their own expectations of transparency and accuracy. The complexity of managing equity increases as you need to keep track of vesting schedules, option pools, and dilution.

Using equity management software at this point allows you to efficiently manage these complexities. It helps maintain an accurate cap table, manage different share classes, and offer real-time updates to your stakeholders.

As your startup progresses beyond Series B, the equity structure becomes even more complicated. More funding rounds mean more investors and more complex terms to manage.

Plus, the potential for exits or IPOs adds another layer of complexity. At this stage, equity management software is no longer just a handy tool but a critical necessity. It provides a clear snapshot of your startup's ownership structure, enabling you to make informed decisions about future funding rounds, equity offers to new hires, or potential exits.

Attract investors with your startup by showing them its robust infrastructure for future expansion.

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Why do startups need equity management software?

Equity management software is a pivotal tool for startups, providing crucial benefits that support their growth and sustainability. Here are the key reasons why your startup needs equity management software:

1. Simplified equity management: Startup founders need their time and attention focused on strategic decision-making rather than administrative duties. Equity management software automates complex tasks such as maintaining cap tables and tracking vesting schedules - saving both time and reducing errors.
2. Transparency: Trust is essential in startups. By using equity management software, you can ensure transparency with all stakeholders by giving them real-time access to information regarding their equity stakes - creating stronger relationships among employees and investors alike.
3. Scalability: As your startup grows, the number of shareholders and complexity of equity structures increases. Manual processes can't scale at the same pace. Equity management software scales seamlessly with your startup, ensuring efficient equity management irrespective of your startup's size.
4. Regulatory compliance: With complex legal and financial regulations around equity management, ensuring compliance is critical. Equity management software helps you stay compliant by accurately tracking and reporting all equity transactions.
5. Future planning: The software can model future scenarios, such as new funding rounds or an exit, helping you make informed decisions. These predictive capabilities support strategic planning, enabling you to optimize your startup's financial future.

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Things to consider when choosing equity management software

Selecting the ideal equity management software for your startup is a difficult process as you need to distinguish each solution from one another. To make the best possible decision, you should consider the following questions:

Is it easy to use? 

Your equity management software should have a range of functionalities, but if they’re too difficult to use, why bother? The ideal solution must come equipped with an user intuitive interface, allowing you to get up to speed without unnecessary delays.

Will it scale with your startup’s growth?

As your startup grows in size, onboarding both new employees and investors, your software must be able to handle the complexities of your unique situation. Some tools are better suited for smaller startups and others for more mature ones. Factoring in the scalability of your chosen tool early on is a must to avoid future disappointment.

Will there be support for you when you encounter issues?

Encountering issues is commonplace, so it's vital to have reliable customer support at your disposal either in the form of responsive customer service teams or comprehensive knowledge bases.

Is it appropriate for your budget? 

Equity management software tends to vary greatly in functionality and pricing. Because of this, it is important for you to carefully consider what you can afford along with what value your selected solution can bring to your startup—don’t forget that pricier isn’t always better!

Will it address your reporting and compliance needs?

Staying compliant with relevant laws and regulations is a must for startups, which is what good equity management software must be able to help you with. Keep an eye out for features like alert systems and cap table health checks as these can help you avoid costly mistakes in the long run.

Does it come with scenario modeling?

Having scenario modeling capabilities is a must for any equity management solution. From visualizing the conversion of convertibles and SAFEs to the impact of option pools, scenario modeling helps startups make the best possible decisions.

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Top equity management software

Selecting the ideal equity management software for your startup isn't always straightforward thanks to the wide range of solutions out there. To help you with your decision, let's now delve deeper into the most widely used solutions:

Sitting as one of the most popular equity management software solutions out there, Carta's powerful software caters to just about any sized startup.

Highlights

• Wide-ranging capabilities: Carta offers an extensive set of functions and features, enabling it to cater to the requirements of even the largest companies.
• Straightforward user interface (UI): Despite its powerful functionalities, Carta's interface is still relatively user-friendly and highly customizable.
• Comprehensive documentation: Carta offers comprehensive documentation and resources to help users in understanding their solution and gaining relevant industry knowledge.

Limitations

• Costly: Carta's prohibitive pricing may make it more difficult for smaller startups to obtain. This, coupled with how their pricing isn't always transparent thanks to hidden fees makes it one of the most costly options on the market.
• In-house 409As: Instead of utilizing an independent third-party appraiser, Carta conducts 409A valuations entirely in-house.
• Excessive functionalities: For most early-stage startups, Carta's extensive range of functionalities may be more than required for their needs.

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While relatively new compared to more established names such as Carta, Pulley is rapidly making a name for itself among countless startups due to its commitment to providing a simplified, user-friendly solution for startups.

Highlights

• Simple UI: Pulley's simple and streamlined user interface makes it easy for users to get started as soon as possible.
• Made for startups: With a focus on early-stage startups, Pulley provides tailored support and educational resources to meet their unique needs.
• Strong customer service: Pulley has a responsive and knowledgeable customer service team that properly addresses its users’ concerns.

Limitations

• Lack of cap table checkups: In contrast to alternatives like LTSE Equity, Pulley doesn’t offer cap table health checkups, placing the responsibility on startups to ensure compliance with the law.
• Limited modeling abilities: Modeling when it comes to Pulley is restricted when compared to alternatives as users only have access to waterfall modeling.
• Lengthy onboarding process: Onboarding with Pulley may take up to 10 days, which is comparably slow compared to competitors in the market.

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Eqvista is no newcomer to the market. Over the years, they have successfully developed a robust equity management platform for their users.

Highlights

• Deep valuation expertise: From 409As to company valuations and so much more, Eqvista provides valuations for startups for most of their needs.
• User-friendly UI: Eqvista's platform features a straightforward and intuitive user interface that simplifies the process of accessing necessary information.
• Advanced capabilities: Eqvista's toolkit provides a wide range of tools and services, streamlining reporting tasks by minimizing manual data entry and automatically consolidating data from multiple sources.

Limitations

• Lack of key functions: Eqvista's most basic plan does not include key features like financing round modeling, 409A valuations, and cap table setup. Access to these features requires signing up for their premium plan.
• In-house 409As: Eqvista conducts 409A valuations internally instead of utilizing independent, external valuators.
• Not suitable for early-stage: Eqvista is not ideal for early-stage startups as its reporting and valuation features are tailored for startups in later stages of growth. Additionally, even the freemium plan requires startups to pay for basic support services such as setting up.

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AngelList is no newcomer to the scene but when it comes to equity management software, it has only been around for two years. Regardless, it still offers a comprehensive solution for startups and is quickly establishing a solid reputation.

Highlights

• Combined offering: AngelList's new stack equity offering integrates equity and cap table management, business banking, and advisor equity grants into one single service.
• Startup hiring: AngelList excels in startup recruitment, serving as an alternative to LinkedIn for job seekers interested in positions offered by startups, as well as investors seeking opportunities.
• Networking: AngelList facilitates connections between startups and investors. Its fundraising process introduces startups to experienced investors who can provide insights and guidance.

Limitations

• Limited cap table functions: Though AngelList offers many features related to fundraising and investor networking, its focus on equity and equity management is relatively secondary.
• Expensive: AngelList's pricing structure can be costly for larger teams, as it is based on the number of stakeholders, which factors in employees who own shares.
• More focus on recruitment/networking: Equity management is offered as part of their comprehensive stack, which may be redundant for startups already equipped with their own HR and banking systems.

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Shareworks offers a robust and comprehensive equity management platform that enables startups to manage their equity, enhance workplace performance, and attract and retain talent.

Highlights

• Mobile support: Shareworks provides a mobile version that allows users to conveniently access their portfolios without relying on a desktop or laptop.
• Comprehensive dashboard: The dashboard offered by Shareworks presents critical information in a visually accessible way.
• Specialized guidance: Shareworks offers personalized support from an experienced team of specialists.

Limitations

• In-house 409As: Shareworks conducts 409A valuations internally instead of using external, independent third-party valuators.
• Slow interface: There has been reported concerns and complaints regarding the slow speed of Shareworks’s interface.
• Poor customer support: Several reviews have expressed dissatisfaction with Shareworks' customer support, citing difficulties in issue resolution and prolonged response times.

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LTSE Equity is driven by a single goal: assisting mission-driven startups in achieving their objectives. Whether it's a small or large startup, LTSE Equity's solution stands out with its highly functional yet affordable and transparent pricing model.

Highlights

• Ideal for startups wanting to scale up: LTSE Equity offers a combination of comprehensive equity management functionalities and features like scenario modeling and cap table health checkups, making it ideal for startups looking to scale at any stage.
• Affordable and transparent: With three founder-friendly plans, LTSE Equity ensures transparent and affordable pricing options that cater to all startups.
• Choose between 409A valuators: LTSE Equity stands out as one of the only platforms in the market that allows founders to choose from multiple reputable, independent 409A providers.

Limitations

• No LLC support: Currently, LTSE Equity does not have native support for LLCs, although they can be supported with the proper steps.
• Heavy focus on cap tables/equity management: LTSE Equity focuses heavily on cap tables and equity management. Additional features such as board consent applications and on-payment exercises are still being developed.
• No Rule 701 management: While LTSE Equity can assist with Rule 701 analysis, it does not offer dedicated Rule 701 management functionalities.

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Top reasons founders choose LTSE Equity

When it comes to managing your startup's equity, there is no shortage of options available. However, LTSE Equity stands out as the preferred solution for over 30,000 startup leaders for several compelling reasons:

• Easy-to-use platform: LTSE Equity offers an exceptional user interface and experience and is backed by positive reviews. Our platform combines powerful features with a simple interface, providing ease of use and additional helpful tools. This allows users to focus more on equity management instead of struggling with the platform.
• Scalability: Our solution caters to startups of all sizes and stages. Whether it's conducting 409A valuations, preparing for Form 3921, modeling scenarios, or managing option pools, LTSE Equity is highly scalable and ready to support startups throughout their entire journey, from seed to series and beyond.
• Exceptional customer support: We pride ourselves on delivering exceptional customer support. Our specialized team of experts at LTSE Equity is committed to providing users with the attention and knowledge needed to address any questions and issues that may arise, empowering them to succeed.

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LTSE Equity FAQs

What makes LTSE Equity different from other platforms?

LTSE Equity is created by founders, for founders. Our full suite of equity management features reflects our real-life experience and insights, empowering your startup to prosper and endure.

How much does LTSE Equity cost?

Our pricing is strictly founder-friendly and scales as you grow. Our plans are also completely transparent, with no hidden costs or surprise price hikes.

Does LTSE Equity provide a free trial or demo?

Yes! Dive into our full-featured demo now and discover every benefit LTSE Equity has to offer—no sign-ups required.

How can I switch to LTSE Equity?

Simply send us your current spreadsheet or cap table, and we’ll get your details onboarded within a week.

How can I ask more questions about LTSE Equity?

Not sure which plan to choose? Looking for a live demo? Schedule a call with our team now.