Finance & Investment

A venture capital-funded technology start-up approached RCOR with the goal of improving their ability to track and evaluate the impact of successive rounds of funding on the company's shareholder structure. Each investment round dilutes the existing shareholders and creates additional sweat shares that can be offered to employees as payments in kind. The company wanted to ensure the accuracy of their records and evaluate the timing of future investment rounds and the availability of sweat shares. With so many stakeholders, the key to developing a solution was to understand the client's current pain points with their Excel model. It was determined that some shares from the employee pool remained unallocated between funding rounds, yet they were always valued relative to the previous funding round. Additionally, employee shares did not always become vested, effectively giving other shareholders their capital. To address these issues, RCOR developed a solution that provided flexibility in tracking and evaluating the impact of funding rounds on the company's shareholder structure. This involved creating tables in which each funding round or working period was given its own section of the sheet, allowing figures to be added and edited as necessary. The company's total equity capital and value per share were highlighted as key metrics at all times. Overall, the solution developed by RCOR has helped the technology start-up improve their ability to track and evaluate the impact of successive rounds of funding on their shareholder structure, enabling them to make informed decisions about future investment rounds and the availability of sweat shares.