Every startup in its first steps understands that without offering stock options to their star recruits, the actual recruiting will never happen. What some might not fully understand, is the effect of those Stock-Based Compensations on the company’s financial report for each year. An inaccurate SBC expensing report regarding these stock option plans might not seem like a big deal for an owner or even a CFO of a small startup, but it might heavily postpone or even cancel the yearned Exit event, such as an IPO or an M&A.
Any entrepreneur is conflicted between the time-consuming and complexity of the stock-option compensation report to its significant importance. This is the reason many are turning to professional companies in order to seamlessly complete the mission. Others try to accomplish the report themselves, or by an accountant and will probably still have to spend time and effort providing much hard-to-find information and documentation.
When the Exit opportunity for a company has finally arrived, the team has probably already grown significantly. New employees gradually joined, and they each hold a different contract or a specifically adjusted equity compensation plan. Sounds tricky? It can get way worse if the acquiring company, the stock exchange, or even the Audit team will find miss-pays and inaccuracies in your early reports. This might cause a delay that can vastly impact the Exit’s momentum and company’s appearance, and more importantly credibility in the global market.
As time goes by, a gap between the public announcement to its planned Exit will grow. It might seem less and less legitimate through the eyes of future investors, and stock traders. This now theoretical concept, might one day turn into an actual problem and will unnecessarily cost a fortune to a company in share worth or the loss of future business deals.
A small group of companies, including the leading startup Altshare, confronted head-on with the matter and developed a hybrid of an off-on-line process to give a fast and extremely accurate report. The report simplifies financial report preparation each year and eventually helps facilitate any future liquidation with ease, shortening the due diligence length, and reducing its complexity to a walk in the park (on this subject at least).
The secret lies in the method of organizing the information. A unique, proficient, and comprehensive equity plan database will be created especially for the startup, and will stay 24/7 available to seamlessly be edited, reviewed, and addressed. As for now (Jan 2022) Altshare is the only company offering this service with a price relatively easy on the pocket, though appealing as it is, pricing is not their most impressive feat.
What truly caught our attention is Altsher’s efficiency, after they set up the data in their unique system, the SBC expense report will be ready as fast as 3 business days (compared to two weeks within other competitors). Combining their years of experience, accuracy, proficiency, and affordability make Altshare the top go-to company for startups in this 2022 report season.
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