EquityList

What are CCPS (Compulsory Convertible Preference Shares)? CCPS are a type of preference shares issued by a company that must convert into common shares after a specified period. Here's how CCPS work: Imagine a Company ABC has issued 100 CCPS on the following terms: - Dividend rate: 8% per annum - Conversion ratio: 1 CCPS converts into 10 common shares - Conversion period: Automatically converts after 5 years Event 1: Pre-conversion For the first 5 years, the investor earns an 8% dividend annually on their CCPS and holds priority in case of liquidation, giving them greater security. Event 2: Post-conversion After 5 years, the CCPS convert into 1,000 common shares ( 1:10 ratio). Dividends now depend on Company ABC’s performance, and the investor’s rights align with those of other common shareholders—meaning no preference in a liquidation event. CCPS often come with a fixed dividend, providing investors a steady income stream before the shares convert. They guarantee that investors eventually gain equity ownership, aligning them with the long-term success of the company. This combination makes them appealing to investors who seek both stability and maximum upside potential.

Fully diluted shares represent the total number of shares that would exist if all convertible securities, such as CCPS (Compulsorily Convertible Preference Shares), were converted to equity. This calculation helps companies and investors understand the potential dilution of ownership over time. Consider this example: - Your cap table currently has 1,000,000 equity shares. - You’ve issued 100,000 CCPS, each convertible into 2 equity shares. Now, a new investor comes in and buys 150,000 shares for $1,500,000, calculating their ownership as 13.04% [(150,000/1,150,000)*100 of the company. However, on a fully diluted basis, accounting for the eventual conversion of CCPS, their actual ownership is only 11.11% [(150,000/1,350,000)*100]. Without visibility into these CCPS, the new investor could be surprised by a significant dilution of their stake when conversions happen in the future.

What is a no-shop clause? A no-shop clause is a provision that prohibits founders from seeking or negotiating other investment offers while the current deal is under review. Once implemented, the company cannot leverage the term sheet to attract competing bids from other investors until the deal is either completed or abandoned. 💡 For investors: This clause ensures they can finalize the deal without the distraction of competing offers. 💡 For founders: It is a trust signal, demonstrating to investors that they are negotiating in good faith.

Sanidhya Narain, Co-Founder & CEO at Dashtoon “Working with the team at EquityList has been a delightful experience. The tool is easy to navigate, offers plenty of customization options, and the support is incredibly swift. I’m particularly excited about upcoming features like consolidated cap tables, which will be invaluable for multi-country entities. EquityList has made sharing cap tables with investors and managing ESOPs much simpler”. We're excited to announce that Dashtoon has chosen EquityList to seamlessly manage their cap table and equity awards! Dashtoon is transforming the storytelling landscape with its cutting-edge Generative AI platform, empowering creators to produce illustrated content faster and more effortlessly than ever before. We’re proud to support Dashtoon in their growth and look forward to delivering a smooth and efficient experience as they continue to push the boundaries of creative storytelling.

Equitylist is now a part of GrowthX® Privileges. With Privileges, GrowthX® members get access to curated perks from top brands like Notion, WeWork, SleepyOwl, CleverTap & more. We are excited to be among the first 30 partners to give exclusive perks to the best in the ecosystem & add more value to the community. Here’s to rewarding leaders building India’s decade. Check out Privileges by GrowthX: https://lnkd.in/g5DJbC4y

Param Shah, Founding Team at Mesa School of Business “EquityList is simple and gets the job done. The user experience is great, and the customer support is top-notch. Setting it up was easy, though it can feel a little overwhelming at first due to the nature of equity management. Overall, it has been an invaluable tool for managing our equity efficiently.” We’re thrilled to share that Mesa School of Business has chosen EquityList to streamline their cap table and equity award management! As one of India’s leading business schools dedicated to shaping the startup leaders of tomorrow, Mesa was founded by alumni from Harvard Business School and Kellogg School of Management. We’re proud to partner with Mesa School of Business and look forward to delivering a seamless experience as they continue to innovate and inspire the next generation of startup leaders.

🔒 What is founder lock-in? A founder lock-in is a contractual provision that requires founders to stay actively involved with the company for a set period before they can sell or cash out their shares. It is typically implemented after a major funding round or before an IPO. This arrangement gives investors confidence that the leadership is committed to the company’s long-term vision and success.

Did you know? - 87% of founders believe that offering employee stock options (ESOPs) is essential for talent retention. - Employee interest in equity awards is on the rise, as they present significant wealth creation opportunities. - In fact, over 80 companies have repurchased employee stock options worth approximately ₹12,118 crore between 2020 and 2023. These numbers show how crucial it is for companies to educate employees on the value of stock options. Equity compensation can often be complex and misunderstood. But, by encouraging open conversations, companies can simplify ESOPs, helping employees see them as real assets and not something abstract. We’re excited to see companies like UrbanPiper taking the lead. They recently invited the EquityList team to their Bangalore office to talk to employees about equity compensation and how it enables wealth creation. Such initiatives build a culture of transparency, attract top talent, and help employees make smarter financial choices. Big thanks to Lakshmi Soujanya K M (she/her) and the team for leading this effort. Here’s to more companies taking similar steps! As Naval Ravikant wisely states, “You’re not going to get rich renting out your time. You must own equity—a piece of a business—to gain your financial freedom.”

📍 Back on the ground in Bangalore! Our team at EquityList recently wrapped up our second visit to Bangalore and met many of our customers. These face-to-face interactions continue to allow us to delve deeper into their daily challenges and product needs, ensuring we’re aligned with their goals. 🔍 Highlights from this trip include: - We gained deeper insight into how our customers are using EquityList, what’s working, and where we can improve. - Discussed new feature requests and how they can better solve real-world problems. - Walked through product use cases, helping customers unlock the full potential of what EquityList has to offer. Creating a product is just the beginning; the real challenge is ensuring it effectively solves your problems. We’re not just gathering feedback—we’re actively acting on it. Every conversation serves as a stepping stone toward a more tailored experience for all our users. Thank you to our customers for their invaluable insight and partnership. We’re excited to take these learnings and continue growing together! 🌱 Bikramjit Singh Suhail Vadgaokar Amidha Jaiswal Yaswanth Goteti Lakshmi Soujanya K M (she/her) BlackBuck (Zinka Logistics Solutions Pvt. Ltd.) Dezerv slice Fincent UrbanPiper

Vesting schedules are critical for aligning employee incentives with company growth. A common vesting structure is a 4-year period with a 1-year cliff, meaning employees earn 25% of their stock options after the first year, with the rest vesting monthly or quarterly over the following three years. This encourages long-term employee retention and reduced turnover. However, as companies grow, they may choose to customize their vesting schedules to meet specific strategic objectives. E.g., a company might implement a performance-based vesting schedule, where options vest based on achieving certain milestones, such as reaching sales targets or product launches. While customization allows for greater alignment with business goals, it also introduces complexities in tracking and management. This is where an equity management software like EquityList comes in. Using EquityList, a company can have 'multiple' vesting schedules for different employees. The platform will effectively monitor vesting timelines and streamline communication by keeping all stakeholders regularly informed.