First time handing out employee stock options? Regardless if you’re new to the game or not, it is a fact that for large enterprises, stock options have become a preferred method of sharing profits with workers. It is a great way to reward employees and align worker and shareholder incentives at the same time. However, getting into this process could get a bit tricky. Complications from regulation compliance, offer letter, getting boards to approve grant options, getting into the option exercise itself and computing share values. These features make stock option management software a lot like fixed asset management software with the need to track value over a period of time, only that the goal is reversed in equity management: appreciation.
Likewise, you might be tempted to rely on financial reporting software to manage equities, but you will be shortchanging yourself. A good equity management software product should streamline and automate the complexities of the equity management process and more. The core features should include handling and tracking equity issuance processes, securing 409A valuations, ensuring compliance and managing capitalization tables. The tool should also be able to act as a central hub for activities relevant to equity, most of the time eliminating the need for legal professionals every time a company issues equity. Clearly, a financial reporting system or even any of the top accounting solutions won’t make the cut.
No worries, here, you will learn all about the 12 best equity management software with core capabilities. You’ll also find it easy to compare their unique selling points and corresponding benefits vis a vis each other so you can shortlist your best options.
Stock options have immensely grown in popularity, helping companies reward employees and share business ownership with them. It is said that the number of workers holding stock options have increased by 900% since the late ’80s. However, despite the popularity of stock options as a form of equity compensation, stock appreciation rights, phantom stocks and restricted stocks have also become favorites. Lest you confuse equity with binary options, which is more suitable for anyone after quick returns, equity is all about long-term investment and management. The process is more complex, as seen in this diagram::
Employee stock options offer a lot of financial benefits to workers. For instance, a 2018 study by the National Center for Employee Ownership has revealed that stock-owning employees have a 33% higher median income from wages than those of non-stock owning employees. They also have higher median household net wealth. Job stability has also been found to be more substantial with the group, with median tenures averaging 5.2 years.
Aside from those mentioned, employee-owners receive salaries that are 2.2 times their worth in retirement and do not face the likelihood of being laid-off as most of their organizations are financially stable. The companies, for their part, do not only contribute to their employees’ financial standing but to the economy as a whole with many of them helping in job creation, generating 2.5% more per year.
Perched on top of our 12 best equity management software list is Carta, a powerful solution that helps businesses in managing their equity, shares and option holders by making the process simpler. It comes with all the needed tools to help you handle request valuations, track investments, manage cap tables and equity incentive plans. This robust piece of software also helps you manage projects, documents, processes, and boards.
Carta is known for its ease-of-use, simplifying tasks such as equity issuance/tracking, financial reporting, stock option compensation expense management, and 409 valuations. Employee and non-employee equity tracking can also be done through the system’s equity plan administration feature while being able to move agent services. The equity management tools that come with the solution make quick work of valuations while keeping stakeholders in the know regarding their company stake.
The vendor offers a great free demo that allows you to see all key features of their software in action. You can easily sign up for Carta free demo here.
Investors also stand to benefit from using the software, which offers features like ASC 820, data security and fund accountant teams that are always on standby to cater to users’ concerns. Carta runs on any web browser and devices running on Android and iOS, making it accessible anytime, anywhere.
Why Chose Carta?
Coming in next is Solium Shareworks, an equity management tool that is designed to help you manage restricted stock units and employee stock purchase plans. Such can be done across your company and even abroad, making the platform ideal for companies with global operations. Employees will benefit from the system as they are given a complete view of vesting schedules, stock value, and release option elections, among others.
The software brings to the table a variety of features needed to effectively manage your equity. These include employee protection during blackout periods, share selling and holding through automated release options. Default release elections can also be set up at vesting dates.
Why Choose Solium Shareworks?
Equity management software Gust Equity Management is designed to help companies manage their capitalization. It eliminates the burden of using spreadsheets in managing enterprise capitalization tables, along with tedious documentation. Using the solution, shareholders are able to audit option grants, equity issuances, forfeitures, vesting dates and board approvals, getting rid of the need for costly legal professionals.
The tools that come with the system are all you’ll ever need to manage your capitalization, resulting in huge cost-savings from legal fees. You can also make 409A valuation report requests, allowing you to offer option grants. This is very useful in preventing tax liabilities for both companies and their employees. A time-hop functionality, meanwhile, lets you see capitalization at any time.
Why Choose Gust Equity Management?
All-in-one cap table management platform Capshare is designed to aid companies, law graduates and investors in managing stocks, equity, dilution and ownership shares. The platform serves as a central hub from which users can manage and track equity while providing them with key stock information.
The system restricts access to relevant users, who are able to view stock information, helping them make intelligent decisions. The app has grown in popularity, with 10,000+ organizations relying on the system for their equity management needs.
Why Choose Capshare?
Captable.io is a free cap table management tool that helps you to easily come up with cap tables and scenario models. The software does this by guiding you every step of the way. It prompts you of key organization data that should be added to your cap table like stock option pool, employee grants, and convertible notes.
The platform also serves as an information repository where you can store all your data, keeping them confidential at all times. All cap tables created using the app can be shared easily to relevant parties, including investors, employees, and lawyers, who can quickly be given access to cap tables, effectively making document management a breeze.
Why Choose Captable.io?
Cloud-deployed investment management software Backstop is specifically targeted at hedge funds, consultants, pensions, private equity and venture capital, institutions, and foundations. It has a myriad of features designed to improve the productivity of your investments. A number of tools come with the system, these include Portfolio Research, Portal and IR, Accounting and Backstop CRM. However, if you’re desperate to boost your sales, Top CRM tools would be a wise choice.
Using the platform you can monitor capital commitments, subscriptions, and distributions across your entire financial portfolio. It likewise helps you manage sales, relationships, and marketing. In addition, Backstop can integrate with Outlook, significantly improving communication.
Why Choose Backstop?
Certent Equity Management is an application that helps businesses in complying with existing rules and regulations governing equity grants and awards. It comes with a fully-integrated accounting suite that helps users in computing expenses for each equity award. It makes equity management a whole lot easier by allowing users to quickly upload new grants to the system.
Certent Equity Management streamlines the whole equity management process, resulting in greater efficiency. It is quite easy to use so that users need not possess extensive technical knowledge. Working with the solution takes away the complexities of using spreadsheets, allowing you to work smarter and better.
Why Choose Certent Equity Management?
GlobalShares is an equity management tool that also functions as a payroll and compensation reporting software. It is an easy-to-use product that can handle all equity administration matters without having to undergo complex training. Also serving as a document storage service, the program keeps a record of all your information, securing them while giving you quick access to your data. However, for those who want robust payroll functionalities, popular payroll software may be the way to go.
GlobalShares comes with powerful features that ensure the efficient management of your equity. These include portfolio management, public and private equity management and a participant portal.
Why Choose GlobalShares
Ledgy is a robust investment management solution that houses a lot of features that will prove beneficial to your business. These include fund, portfolio and compliance management, performance metrics and benchmarking.
The vendor offers excellent live support while providing users with in person and live online training sessions. And because the software is deployed via cloud, it can be accessed from virtually anywhere at any given time. This works for investment managers who are always on the go. But perhaps, the best of the solution is the fact that it has a free version, perfect for businesses who are on a tight budget.
Why Chose Ledgy?
Equity management software Capdesk is designed to help organizations streamline their equity plans while being able to make confidential compliance reports. What’s good about the tool is that it helps you save a lot of money on legal fees, by making sure that all equity records and documents are managed in compliance with best practices.
Capdesk helps users structure their share grants while making exercise and vesting accessible to them. This makes sure that all exercises and grants are accurately managed. Other key features include automated reporting, cap table management, automatic audit trails, and equity and document structuring.
Why Choose Capdesk?
Truequity is a powerful stock option management software that is designed to keep records of employee stock ownership. The solution offers users updated and accurate stock ownership information, providing them a better understanding of the impact of liquidation and future financing on their organizations. But the best part is the fact that the product is deployed via cloud, giving users easy access to the system.
As a stock option management platform, Truequity benefits users by tracking and modeling shares, calculating valuations, convertible notes, and share prices–all from a single dashboard. It likewise allows for the exercise, cancellation or acceleration of options. Its reporting feature, meantime, generates summary reports on option status.
Why Choose Truequity?
OPTRACK is a stock option management platform that helps companies manage equity compensation, stock data and stock options. It is a self-administration tool that you can use to manage equity plans, cap table and compliance reporting without breaking the bank. This is why it has become a popular tool for companies seeking a complete view of their equity awards and ownership. The solution does not discriminate as it works for both private and public companies. It also serves as a single source of truth about your equity by keeping accurate historical information about them.
Why Choose OPTRACK?
Purchasing an equity management tool is not as easy as you think. There are a number of qualities that must be present in such software for a purchase to be the “right one.” The overall requirement, of course, is that it should meet best practices in four key areas–accuracy, security, efficiency, and comprehensiveness.
The right tool has to come up with accurate information, which can be derived from equally accurate calculations. Failure to satisfy this criterion could spell trouble for your company. Incorrect figures can not only adversely impact your employee-owners but give you compliance problems as well. Another thing to consider is security. Are your software’s security features enough to keep you confident that your information cannot be accessed by unknown parties? Also, a good solution will not only provide data security but accessibility as well.
And then there is the question of efficiency. Is a system known for being able to handle any aspect of equity management? It also should have the required automation features to make light work of tedious tasks. It wouldn’t hurt also if data in your equity management software can work with your HR software, where most of the employee data reside.
Lastly, the ideal system should be comprehensive, offering functionalities that are needed to ensure that managing your equity is as smooth as possible. These may include record keeping, share valuation, scheduling vesting dates and share pricing.
These are but some of the qualities of a good equity management system. Clinging to these ideas will help you in your hunt for the perfect platform.
And we’re just about finished here. Having read our list of the 12 best equity management software, you should be ready to shop for such a tool. Just keep in mind the things that you need in such a tool and you can’t go wrong. You can also go for free trials, to get a firsthand feel of a platform’s features. Better yet, consider our top tool, Carta Equity and begin enjoying its benefits. Meanwhile, for small businesses looking to earn from stocks, it is best to learn the basics of investing before diving into a deal.
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