US-based AngelList, a digital marketplace that connects technology startups with angel investors, as well as job-seekers who are looking to work at startups, launched a new platform called EquityList for the India market.
The platform helps founders track their startups’ equity holding, in terms of how much stake they have diluted after each funding round, manage and set up the Employee Stock Option Programs (ESOP), digitally issue grants to employees, including keeping track of which employee owns how much equity in the company.
“EquityList fits into the offerings well, startups can now raise funding, hire employees, manage equity (of shareholders and employees), and launch,” Sumukh Sridhara, CEO at EquityList told KrASIA.
EquityList said dozens of venture-backed Indian startups are already using its platform to manage their cap tables, create stock option programs, and issue grants.
According to Sridhara companies face an operation burden in manually administering grants, especially when the team strength increases. “Manually creating grant letters, tracking ESOP vesting, and managing questions from grant holders takes up time. Our largest customers are able to send out hundreds of grants in minutes using EquityList,” he said.
Currently, startups hire lawyers and accountants to manage their stock options but as companies grow, their cap tables become complex. “Lawyers and accountants try to manage them with spreadsheets that are filled with errors. EquityList brings Indian startups the same caliber of cap table software used by startups in Silicon Valley,” the company said on its blog.
AngelList’s India head, Utsav Somani, said startups can use the platform to manage their cap table free of cost.
Talking to TechCrunch, Somani said, “Several Indian startups have become unicorns over the years and many more are moving to join the list. But employees at these startups don’t really know what’s the worth of their paper stake, and what they can do about it.”
EquityList said its platform would make it easier for employees and investors to learn about the value their shares and keep track of key documents. “Employees can also use our calculator tool to model the cost of exercising options,” it said. The tool also enables employees to digitally accept the equity grant which is generated by the company, assess its value, and later make use of it.
“Employees need to feel that they are valuable. In the U.S. and other markets with more mature startup ecosystems, employees are up to speed on these matters,” Somani said.
The company said it has partnered with legal and finance firms including Nishith Desai, Veritas, and Burgeon to create a free document generator for ESOPs. Startups can save hundreds of hours with EquityList’s grant letter generator, e-signatures, and automated reporting.
“Equity management is a problem faced by scaling startups anywhere. As Silicon Valley turns more into an idea than a place, every country where there are hyper-growth startups and an undeveloped set of tooling for startups, is an opportunity area. We’re particularly seeing this be the case across South East Asia,” Sridhara said.
Earlier in May, AngelList’s Somani launched an India-focused micro-VC fund iSeed to invest in 30 early-stage startups with an average check size of USD 150,000 over the period of two years. AngelList launched its syndicate in India in 2018 expanding its reach from the US, UK, and Canada.