In order to help empower the APAC tech startup ecosystem, we recently launched Perks: a curated selection designed to give e27 Pro members an access to top-class products and services with over US$10,000 worth in savings. In order to do that, we have partnered with some of the most amazing solution providers in the region.
We spoke to Sanjay Jha, Co-founder and CTO of LetsVenture, India’s most active startup fundraising platform and the Chief Product Officer (CPO) of MyStartupEquity, to get a closer look at their products and services and to help the community understand better how MyStartupEquity can help them yield desirable results.
Can you describe what your company does? What industry you are in, who your target market is?
For the last 7 years, Letsventure has been the most trusted and active platform for startup fundraising in India. We have a strong track record in building out a tech-enabled platform that has enabled over 250 startups to raise more than $200 M from thousands of angel investors, micro-VC funds and family offices. Having raised this equity, we have also noticed the gap in the market to manage this equity and that was the genesis of MyStartupEquity in late 2019.
MyStartupEquity is a SaaS fintech play that is digitising, automating and securing the most valuable asset that any startup has — its own equity! This is a product to help founders, employees, investors and VCs better manage their equity in startups. What do we mean by this?
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Well, the product is designed to become the single source of truth for all matters related to a startup’s cap table and ESOPs (including Phantom Stocks, Stock Appreciation Rights). By using the product, startups, right from the earliest stages to those with 10s of investors and 100s of employees with ESOPs can avoid errors that might creep into an Excel sheet and the lack of security when this Excel sheet floats into the market. Moreover, the product has a lot of tools packed in to make the life for the founder, finance and HR teams simple.
Presently, MyStartupEquity has 60 startups (seed to Series D) from India, USA and Singapore using the cap table and ESOP management product.
How does your product/service help companies? What gaps in the market do your products bridge?
Today, the biggest problem is the information asymmetry and lack of security in the way cap tables and ESOPs are managed. Founders have a lot on their plate, finance and HR team members may change, an outsourced firm might not prioritise tasks; and all this leads to delays and errors — both forced and unforced.
Let’s take an example: Mark is the founder of a startup that has raised a seed round of $500,000 from friends and family and two angel investors (his ex-bosses at the big tech company he was working at before). With this, he brought on board his co-founder and CTO, Eileen and the early product team, marketing and sales team — all of whom he promised generous ESOPs since he couldn’t meet market salaries. For his product and marketing team, Mark chose to have standard quarterly vesting after the one-year cliff period but for the sales team, he chose performance-based vesting. He’s managing all this on an Excel sheet.
Fast forward two years, the startup is doing well — over 10 employees now have ESOPs and Mark has raised a small round of convertible debt too. Now, he is in the market to raise a Series A of $1.5 M. VCs and some large individual angels want to see the cap table and also get a sense of what the fully diluted cap table will look like if they were to invest. Mark also has to be cognisant of the part conversion of the debt round and topping up of the ESOP pool as part of the Series A. He also has to allocate a higher share to Eileen as he had promised her when she came on board two years ago.
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Now, all of these calculations and managing expectations of current and prospective investors are daunting for Mark, he’s running multiple Excel sheets and having to cross-check every new round modelling scenario with his chartered accountant. This is taking up time and bandwidth. Meanwhile, new team members are being on-boarded and as the founder, Mark has to run and manage the ESOP conversations with them too.
Sounds difficult and strenuous? Well, it is, but it is also the reality of startup and founder life!
This is where MyStartupEquity comes in with its easy to use interface and click of button calculators, report generators and in-product communication tools.
For instance, the Cap Table Tool helps founders maintain a single source of truth and safe keep share certificates and various other documents online. Information from multiple rounds including bridge rounds are maintained online and tools and notifiers for convertible debt instruments like SAFE, Convertible Notes, ensures that no investor and round information is missed out due to unforced errors. Moreover, MyStartupEquity’s scenario modelling tool can help Mark run various calculations on what his new cap table would look like and he can securely share the same with his investors on a need to know basis — all of this from within the product itself. No need to worry about conflict of interests and unsolicited entities becoming privy to sensitive information.
Also read: Pivoting beyond product: You need to look at your company/work culture, too
On the ESOP front, at the earliest stages, the MyStartupEquity product would have allowed Mark to create and customise his ESOP policy online and get a simple dashboard view of the ESOP pool. He would have been able to manage the granting, vesting and exercising of options digitally for all team members too. Additionally, the product generates all the accounting and book-keeping required for ESOPs and Mark or his CA can use these reports to make all the regulatory filings required; literally at a click of a button.
Lastly, and perhaps most importantly, the products’ employee interface allows everyone on Mark’s team to actually see the value of their ESOPs and continue to be energised about the road ahead for the startup.
To summarise, these are the top features of the product that makes life easier for founders, employees and investors:
• Digital cap table with features for round & exit modelling
• Calculator & notifier to manage convertible instruments
• Secure document vault
• Customised ESOP scheme generator
• Manage grants, vesting, exercise, & employee exits online
• Automated accounting, reporting, & annual filings
• Role based permissions for users
• Multi Factor Authentication
Can you give an example of how your product is being used by your customers? Any customer success stories you’d like to share?
Presently MyStartupEquity has 60 startups from India, USA and Singapore using the cap table and ESOP management product. Some of these startups include Zetwerk (funded by Sequoia, Lightspeed), Jupiter Money (funded by Sequoia, Matrix), Cyware (Emerald Development Managers), Darwinbox (Sequoia funded), Epifi (Sequoia, Ribbit Capital), Kyt.academy.
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“Zetwerk is a 2-year old startup and we just closed our Series C. Right from the time we closed our Series B, I had been thinking about moving into a product that would help us manage the cap table and the administration of the ESOPs because there were times when our data did not match — when something like that happens to a process like ESOPs which has financial liability both for the employee and the employer, it is of great concern. We scanned various products and then decided to go ahead with MyStartupEquity because of the capability and competence of the team. Secondly, I wanted the product to have a simple and easy user interface while getting things done smoothly & accurately. Lastly, the price point was very compelling and that helped us make a faster decision,” Barat Vinayakan, CHRO, Zetwerk (a manufacturing services startup with 300+ employees, 100+ customers across 30+ countries)
Are there any recent accomplishments of your company that you want to share with the e27 Community?
Sequoia Surge, Freshworks for Startups, and of course, e27 are some of the partners that have endorsed MyStartupEquity and extended the product to their startups across India and APAC. In India, MyStartupEquity is also a partner of choice for the Mumbai Fintech Hub.
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