TEAMING UP

Cap Table Management

WRITTEN BY:

Trent Read, Partner at EP

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WE’RE EXCITED TO ANNOUNCE THAT WE HAVE TEAMED WITH PLAN MANAGEMENT CORP TO PROVIDE OUR 409A VALUATION SERVICES TO USERS OF THEIR OPTIONTRAX CAP TABLE MODULE.

Many private companies opt to track their cap tables and option ledger using cap table management software rather than deal with managing it in Excel or a homegrown database. Economics Partners has partnered with a number of software companies in this ecosystem.

We are especially excited about this partnership as their team is unrivaled in their depth and breadth in this market. The experience the leadership team has in equity services is impressive. For example, their CEO Jonathan Miller has over forty years in the equity services industry. The company truly understands and has experience with the entire ecosystem from early-stage private to public company equity administration. Some of the venture-backed market participants are trying (sometimes with mixed results) to become more sophisticated to move up market whereas OptionTrax is already there.

Couple their strength and capabilities with our nation-leading 409A services and clients seeking cap table management coupled with 409A valuation reports are in great hands. We’ve been conducting 409A valuations since early 2006 and likely do more of them on a monthly basis than any other valuation firm in the country. We are trusted by many of the top law firms, audit firms, banks, and outsourced CFO firms as the go-to firm for 409A reports.

An interesting dynamic in the cap table management space is that several of the competitors are or have been venture-backed companies. As always, with venture capital backing a primary goal is to grow fast and seek an exit. That can be a tricky formula in a world of compliance. Competing forces can lead to short sighted decision making with mistakes, shortcuts and poor client service being the byproduct. Plan Management with OptionTrax is a refreshing counterpoint as they are not venture-backed, and product quality and client service will never compete with grow fast and exit considerations.

I have been the CFO of two venture-backed companies that I was able to help grow and sell to public companies. It was an amazing experience. But from my perspective it is a world that lends itself better to businesses that use lean start-up principles and want to grow fast, fail fast, put product out, get feedback on flaws, fix flaws, pivot as needed, rebrand if needed, develop for the most common situations with little time or budget to deal with outliers, achieve scale and get to an exit. Very little of that sounds like the type of company I want managing my company’s equity table and option ledger. For this reason, I feel like the OptionTrax offering from Plan Management Corp is in a great spot and has a great story to tell for the long-term. I’m very excited about teaming with them for clients who want both cap table management and valuation services.

For the sake of founders everywhere: We hope that SAFEs do increase in use and popularity.

For the sake of investors everywhere: If you’re going to use SAFEs, you’d better avoid the Lloyd Christmases of the world.

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Trent Read - PartnerAUTHORED BY TRENT READ

Trent has been a CFO of two venture/growth equity-backed companies that ranked on Inc. Magazine’s list of fastest growing companies in the country which he successfully led from their infancy to full liquidity events. He began his career as an Analyst in investment banking with Deutsche Bank. He was then a Senior Financial Analyst for a $200 million business unit of Honeywell. He then returned to investment banking as an Associate and then VP at Wachovia Securities and Sagent Advisors respectively. He worked with media, digital media, telecom, software/SaaS, and internet infrastructure companies on transactions that varied from multi-billion dollar LBOs to small growth equity capital raises. Trent is now a partner at EP and is the head of EP’s Utah valuation practice. 

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2018-05-23T17:34:04+00:00