Building a ledger or cap table for an SPV includes cataloguing all of the investors in the SPV with their detailed information.
The final requirement in ensuring that our SPV is a fully formed and compliant entity is called the cap table (i.e. capitalization table, also referred to as a ledger). A cap table is a table or spreadsheet that enumerates the equity holdings of all participating members/shareholders within an entity. This tool is most commonly used for startup companies and venture investment entities. Building the SPV cap table requires Administration expertise, like most of the steps in the Anatomy of a Capital Raising SPV.
The cap table for an SPV needs to list all of the entity’s participating investors and their relevant information. This cap table will be used and referred to frequently throughout the lifecycle of the SPV. The cap table is a requirement to ensure proper record keeping and–more to the point–to enable us to pay federal and state taxes, make distributions to our participating investors and complete other necessary activities they need.
Creating a usable cap table can be an arduous process, filled with significant potential for human error, which can carry consequences at any point of the SPV’s lifecycle. Assure has developed an SPV service that eliminates many of these unhappy unintended outcomes. The company’s Glassboard technology platform streamlines and automates many formerly tedious, time-consuming manual processes and alleviates the potential for mistakes.
Another fundamental advantage of the pioneering Assure SPV is that it enables large-scale syndicate investments. For the first time in history, SPV organizers can easily, rapidly and cost-effectively aggregate a large number of investors within a single entity. This greatly simplifies the cap table of the target entrepreneurial company, which benefits them in follow-on investment rounds. The Assure SPV also democratizes the investment landscape. As organizers are now able to easily include small investors, these new market entrants now have access to deals from which they were shut out in the past. This simultaneously expands the sources of investment capital available to promising entrepreneurial companies.
Now that we have constructed and catalogued our cap table, we are ready to move on to STEP 10 in our SPV odyssey: COMPLETE AND FILE YOUR SECURITIES FILINGS TO THE SEC AND RELEVANT STATES.