Back in 2017, Privitar was managing its equity reports on spreadsheets. But CFO Nick Pointon was well aware of the risks this entailed. ‘I’ve been in startups for over 20 years, and it’s the same problem every time: the first assumption you have to make when looking at a spreadsheet is that it always contains errors,’ he explains. The company therefore understood this was not a viable long-term solution: ‘Although we could have continued with spreadsheets for a while at our current scale, we’re heading for bigger things, and if you don’t get your share capital and option management under control early on then you have a problem,’ says Nick. ‘I’ve see a company track share options on spreadsheets from incorporation up to IPO when there were over a thousand option holders and it was messy. A lot of time and money was spent reviewing and correcting the data ahead of the transaction. But at Privitar, both me and my CEO had been through a transaction before, so we understood the importance of high-quality data in this area’.
Being displeased with their spreadsheet solution, Privitar was intrigued by Capdesk when the team reached out to them: ‘It was an easy sell to us’, says Nick. Although the company did explore other digital equity management solutions, they decided Capdesk was the best fit for them due to its UK focus and EMI functionalities. Nick adds: ‘Especially when I heard the price, I thought “well, we should go on Capdesk yesterday!” The cost of fixing flawed spreadsheets later is just huge’.
Capdesk has reduced the time I spend answering share option queries to about an hour a month. And if we IPO or go through a large transaction in the future, we can be sure the quality of data is there and doesn’t incur large costs sorting out a mess at the last minute. That’s where the real benefit is.
Privitar is already enjoying the efficiencies of equity reporting on Capdesk: ‘Capdesk has already massively paid off with benefits that I wasn’t really expecting, like being able to pull out cap tables at the drop of a hat, and managing equity reports and filings much more easily. When somebody asks for our latest cap table, I just download one from Capdesk in 30 seconds. And you can do all the analytics on it that you‘d do in Excel, too. For me, this means reducing the time I spend answering share option queries to about an hour a month,’ explains Nick.
But Privitar believes that Capdesk’s biggest advantage is preventing chaos at a more crucial stage in the company’s future. As Nick puts it, ‘having a formal system that makes you go through various checks as you enter the data, which cannot then get altered accidentally, is where the real benefit is. So that in a few years’ time, if we IPO or go through some kind of large transaction, we can be sure that the quality of the data is there and incur large costs sorting out a mess at the last minute.’
Therefore, when Privitar reaches a transaction, it plans to use Capdesk as an execution tool. A recent experience convinced them this would be the right solution. ‘We recently went through a mini-transaction, receiving a couple of million dollars. The investors wanted an updated cap table within 2-3 hours of the transaction, to close things off on their end. With Capdesk, this was literally a matter of me grabbing a coffee from the kitchen, going back to my desk, and having the cap table fully updated. It was that easy. Sure, you could do that in Excel, but with Capdesk this was now recorded throughout all eports in the system, and I knew it was done correctly, too’.
Nick concludes his thoughts with the following: ‘If in the future I find myself sitting on the board of another company, I’ll certainly be advising the person in my current position to get off Excel and onto Capdesk as quickly as they can’.
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