These are strange times – there is no doubt about it.
Businesses worldwide have been forced to change that meeting from ‘room T36’ to, well, your living room, The ‘virtual’ meeting, remote working, and laptops on the lap, have become the new norm.
However, we get that this hasn’t been a seamless transition for everybody. For start-ups especially, who may not have large support systems in place, this can be a shock to the system.
As businesses vacate from their shiny plant-filled office to their cluttered home studies (which have until now been re-purposed as the storage / kids / don’t-go-in-there room), it’s normal to lose track of documents, correspondence and general processes that worked in the office. It’s normal to get anxious about how and where to keep those transactions moving with investors and shareholders, without rushing it and making basic (and deadly) errors as you go.
For many of our clients, the main priority is to continue business as per usual, and this is especially important when you are in the middle of a capital raise.
Here at Cake, we see the mainstream move to virtual and remote working as the push that perhaps we all really needed to help make equity and raising simple again.
As stated in Tech Experts, Notwics’ recent newsletter:
As virtual becomes the norm – this way of working potentially could increase efficiencies around the investment & fundraising process in general, in the medium term – by summer.
There are lots of face to face meetings to get to a funding decision, this, both Angels and VC’s may have to change temporarily to drive Virtually based investment.
A knock on effect of this – is there are now a lot less & people wasting time travelling to meetings and having to do “meeting over meeting” – before cash is provided – so the “work smart” factor around fundraising could substantially increase in this crisis – Christopher Lowe – CEO and Founder of NOTWICS
Embrace the new school
The old school capital raise involved meeting after meeting, confusing spreadsheets, long email chains, and it bled the printers dry. It was clunky, confusing, and ugly.
The new school capital raise is clear, responsive and aesthetically pleasing (whether you’re an investor looking to invest, or a company managing your equity).
In other words, the old school raise was the PC, and the new school raise is the Mac. Get what we mean?
By using Cake to manage your equity throughout this turbulent time (not just a raise, but also share transfers, updating your registry or issuing shares to employees), you can:
- work collaboratively with your team, without the need for emailing spreadsheets back and forth and clunky excel formulas – your team members can log into your Cake account and let the software do its magic);
- quickly set up a ‘top-up’ round, to top-up funds from your investors, making sure you’re prepped (no, no more toilet paper) and ready. We get that some businesses may be a bit hesitant to approach investors right now, however, if you determine that you do need some extra assistance to get through these times and come out stronger on the other side, the time to move is now. Make it easy, and make it simple;
- easily implement employee share schemes to incentivise your employees, at a time where a pay-rise or a cash bonus just may not be realistic; and
- Fix up that error riddled share registry of yours, by uploading it to Cake and allowing ASIC to stay up to date with all future changes, minus those dreaded late fees.
These are weird times, we know.
However, please do keep in mind that often in times like this, there will be positive flow-on effects, despite how things may look now. Let’s not forget that companies such as Microsoft, IBM and Apple actually grew during recessions and downturns.
The Kauffman Foundation sponsored a 2009 study that found more than half of the companies on the 2009 Fortune 500 list were launched during a recession or bear market. Seek out those opportunities, make those connections, and take those next steps.
Cake is here to help. Book in a time to chat with us (virtually of course – dah) about cleaning up your equity, closing that round, and generally sorting your ‘equity stuff’ out.
Stay safe, and stay positive!
If you liked this article, check out 7 Capital Raising Mistakes a Start-up Should Avoid or The Capital Raise Checklist – Are you ready for a raise?
This blog is designed and intended to provide general information in summary form on general topics. The material may not apply to all jurisdictions. The contents do not constitute legal, financial or tax advice. The contents is not intended to be a substitute for such advice and should not be relied upon as such. If you would like to chat with a lawyer, please get in touch and we can introduce you to one of our very friendly legal partners.
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