Documenting the Future of Corporate Governance

Documenting the Future of Corporate Governance

Corporate governance is a process by which a corporation is directed, managed and run. Organized properly, it serves as the foundation for business decisions supporting enterprise growth and stakeholder value.

Healthy engagement between stakeholders, the board of directors and company management is paramount for the profitability, productivity and market positioning of a business. These functions are a particularly important element for attracting long term investors and capital.

Organizational documents are key to the legitimacy of a business and its growth. Primary here are corporate formation and operational documents which provide a clear articulation of business activities.

The business structure utilized depends on the type of entity a founder chooses to run and the jurisdiction they’re in. A corporation is codified by way of a Certificate of Incorporation (also known as an Articles of Incorporation), along with associated bylaws that outline operating procedures.

These documents form a corporation’s basic charter governing management, operations, and equity holders’ rights.

Today it’s not uncommon to see founders ignore proper corporate governance practices in their haste for a quick business launch and market presence. And as is often the case in a rapidly growing industry sector, this oversight can run afoul of stringent and rapidly evolving regulatory requirements and requests for transparency.

Moreover, early investors and stakeholders often overlook these governance shortfalls in their quest for a quick investment return.

One example of this involves cases where a founder may offer a verbal or handshake promise of equity or stock options to employees or advisors without any sort of documentation. The same with corporate restructuring or even a vendor arrangement that occurs without an agreement to reference back to.

All of this underscores the importance of facilitating and adopting proper documentation practices. As a business owner, you can avoid headaches by implementing strong corporate governance practices right out of the gate. This involves bringing order to your bylaws, operational documents, and agreements, ensuring that your business is consistently operating within established parameters and approval protocol.

https://shawnowen.us/Shawn Owen is the CEO of equaSTART an enterprise on the cutting edge of document simplification where from creation to execution, agreements are smartened into living adaptable core components of an organization. He had this to offer about the launch of the business:

“I think there were a lot of different elements that probably led up to this idea culminating. It involved some big ideas that I’ve had for a long time along with a lot of different experiences which led me to my own theories around how businesses should operate and function.”

Owen says that the ultimate spark for deciding that this was an idea that needed to happen on the heels of the pain he had experienced running a previous business.

“I had many moments of deep reflection where I began asking myself, ‘why is this so complicated, why is this so hard?’”

He found that the document process to be rather arduous, often involving the review of something that occurred in the past in order to identify the best, most accurate outcome for people to agree on. But at the end of the day, he says, it was all basically about the efficient execution of agreements and recordkeeping.

Asked about the value proposition of equaSTART as a solution to this, Owen added:

“Broadly speaking, we’re using technology that’s specifically focused on delivering a quality business user experience around documents and agreements, all with the aim of providing a single source of truth for the records.”

Owen’s concludes:

“With all of the technology that we have in the world that we live in, I kept thinking, ‘shouldn’t there be a better way of keeping records without all of this unneeded overhead and complexity?’ When things start to become too complex, you start wondering ‘why is this, this way?’ I’ve always been a big fan of simplifying things if there is an easier way”

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Feature Interview With Corporate Attorney Garrett Sutton 1

EquaProfile: Feature Interview With Corporate Attorney Garrett Sutton

Garrett Sutton is a corporate attorney, asset protection expert and best selling author who has sold more than 900,000 books on corporate formation related themes.

For over 30 years, Sutton has been providing business leaders and real estate investors with the necessary support for asset and legal protection while maximizing their financial goals. He founded two companies, Corporate Direct and Sutton Law Center, which have helped scores of clients and incorporate their businesses and protect their assets.

Garrett also is part of the elite group “Rich Dad Advisors” tied to bestselling author Robert Kiyosaki. A number of the books Sutton has authored are part of the bestselling Rich Dad, Poor Dad wealth-building series.

Garrett attended Colorado College and the University of California, Berkeley, where he received a B.S. in Business Administration in 1975. He graduated with a J.D. in 1978 from Hastings College of Law, the University of California’s law school in San Francisco.

Licensed in Nevada and California, Sutton is a member of the State Bar of Nevada, the State Bar of California, and the American Bar Association. His professional articles have appeared in the Wall Street Journal and Credit.com, among other publications.

In this EquaStart interview, Sutton discussed the growing world of business formation and what it means for both startups and established businesses.

Feature Interview With Corporate Attorney Garrett Sutton 2

How did the concept of corporate entities come into existence?

When we fought in the American Revolution, we took not only the English crown on but a giant corporation, the British East India Company. This was during a period in our history when people were generally upset about corporations.

So at the founding, there was some interest around creating a national corporate law. There was a lot of resistance to this as the populace instead wanted each state to have its own corporate law. So that’s how it was carried forward, a decision which allowed states to compete in terms of the favorability of their laws.

So which states currently offer the greatest favorability?

Delaware has always been out in front. But Nevada and Wyoming have made efforts to become the go-to states. Wyoming when it comes to LLC’s is great. And Nevada is the only state that allows the charging order protection, the key LLC asset protection feature for corporate shares. So we’re in a dynamic period, one where each state that wants to compete can amend their laws in an effort to become the most favorable they can.

What’s one of the common mistakes businesses make when setting up a corporation?

With all due respect, the first one is that you often have CPA’s, telling people that they don’t need to set up a corporation or LLC when starting a new business. Our joke as corporation attorneys is that CPA stands for “Can’t Protect Assets.” So in my opinion, it’s imperative for new businesses to talk with an attorney, someone who understands what the risks are of operating as a sole proprietor, such as the fact that all of your personal assets are exposed. So that’s a rookie mistake right out of the gate, not setting up an entity from the get-go.

Are there any other mistakes?

Yes, a second blunder common among business owners when setting up an entity is utilizing one of those $99.00 providers that will form the company for you and get it chartered with the state without providing you with the paperwork you need to be a legitimate corporation. In other words, things like by-laws for the corporation or an operating agreement for an LLC are often missing. The issue here is that if you don’t have that paperwork together, someone can pierce through the corporate veil of your business and reach your personal assets. So it’s important to not only to do it right at the start but to have all the documents you need set up and ready to go when requested.

How are these documents typically organized?

Some of these formation services send you a disk with the agreement on it and you’re supposed to fill it out and sign it. But many business owners forget to execute the signatures. So you just have this disk when you walk into court, try to print out what’s on it, and if it hasn’t been properly signed, you are going to lose the case. So it’s important from the very start to make sure that you print out the document and sign it.

What about corporate minutes?

Businesses need to have minutes every year, the corporate annual documentation of the directors and the shareholders' meetings. For LLC’s, its important to have regular meetings of the members that are documented through meeting minutes. If you’re ever called into a court of law, you’ll need to have those annual minutes prepared. Because if a judge looks at your minute book and sees that you haven’t met the requirements for a couple of years, he/she could say that you’re not following the requirements of a business.

Are these minutes an annual requirement?

Yes. You need to be conducting your annual meetings even if the state law says otherwise. In Germany where the LLC was started way back when, if you didn’t have the annual meeting minutes, your corporate veil could be pierced.

What about corporate entities and how they’re set up business taxation?

There are two issues. The first is how your business is going to be taxed. We work with CPA’s all the time to have an LLC taxed as an S Corp, if necessary, or as a C Corp, or partnership or as a disregarded single entity. So we work with CPAs on how your entity is going to be taxed and what’s the best taxation method for you.

And certainly, the CPA has a great role in selecting the method of taxation.

What about stock certificates? And the emergence of blockchain to manage them?

When it comes to stock certificates and all, they’re going to be important if you are a public company, or if you are going to have a large number of shareholders.

It’s here where blockchain technology is certainly going to assist in the issuance of stock certificates. Delaware, in fact, has recently allowed for blockchain stock certificates. So it’s a dynamic area right now.

Can you share with us a little about you’re long-term working relationship with Rich Dad/Poor Dad author Robert Kiyosaki?

I’ve been very fortunate to collaborate with Robert Kiyosaki and the Rich Dad/Poor Dad group for almost 20 years. They initially asked me to write a book that would be accessible to the average person who wants to understand corporate and LLC structures. So that’s why I wrote the first book “Start Your Own Corporation” which I’ve updated a number of times over the years because of tax laws changes and changes in asset protection laws.

And then there’s the book “Loopholes of Real Estate” where I talk about the legal strategies for investing in real estate. I use stories to make points about the concepts. Instead of a dry narrative around how you’re supposed to do things, I tell a story as my readers seem to learn better from the examples.

So it’s been very enjoyable for me to write these books, and to get feedback from others. I’m on the phone with people all the time from around the country and the world and a lot of them say that they have appreciated the book because it provides such a comprehensive overview of asset protection.

What do you believe is ahead in terms of corporate entities?

That business formation will continue forward at a steady pace. Because a lot of people are investing in real estate you are certainly going to see a growing demand for LLCs. People are also using LLC for other forms of investing. A lot of people, for example, are looking to Wyoming as a place to form a Wyoming LLC and hold their digital assets there because such a favorable set of laws exists there for bitcoin and other forms of digital currencies.

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What is a Corporate Entity? 3

What is a Corporate Entity?

A corporate entity is a business structure formed specifically to perform activities, such as running an enterprise or holding assets. Although it may be comprised of individual directors, officers, and shareholders, a corporation is a legal entity in and of itself.

Generally speaking, there are three general forms of legal entities through which business can be conducted: (1) sole proprietorship, (2) corporation, and (3) partnership.

There is also the limited liability company (LLC), a business structure that can integrate the pass-through taxation of a partnership or sole proprietorship with the limited liability protections of a corporation. LLC’s are technically not a corporation under state law. Rather they are legal structures that deliver jurisdictional limited liability protection to business owners.

These various forms of entities are legally able to enter into agreements or contracts, purchase property, assume obligations, open a bank account, incur and pay debts, sue and be sued in their own right, and issue stock under their business umbrella.

Businesses throughout the world utilize corporate entity structures. A corporation’s most important attribute is its limited liability provision. This allows shareholders to accrue profits through dividends and stock appreciation without being personally liable for company debt.

Establishing a Corporate Entity

Corporations are created through an incorporation process initiated by either a single shareholder or a group of shareholders with ownership rights to the corporation. This begins with the filing of Articles ofIncorporation in the state jurisdiction where the corporation is seeking to be registered.

A filing can occur in a state outside of where the corporation is located. States like Delaware, Wyoming, and Nevada have favorable incentives for companies registering in their geographic locations. These corporations, however, are required to register as a “foreign” corporation in the state where they actually reside and engage in their business operation.

In these out-of-state scenarios, a corporate entity is typically required to designate a registered agent (a person or company designated to serve as the legal contact of record).

Another benefit of corporations is their ability to provide for unending succession. So, they may technically exist in perpetuity unless dissolved.

A corporation can be set up as a non-profit, as in the case of a charity. However, the vast majority of corporations are established with the intent to provide a return for its shareholders.

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What Are Corporate Bylaws and LLC Operating Documents? 4

What Are Corporate Bylaws and LLC Operating Documents?

Corporate bylaws are a vital element of a newly formed company, providing key rules and regulations for operational effectiveness. They aredrawn up and codified by the board of directors when a corporation is being formed. This document helps to ensure that a business runs consistently from its inception.

Bylaws thus become the critical document to aid the board of directors in their oversight of the corporation.

Terms included in a corporate bylaw are dictated by the guidelines set by a particular state. These typically include important information such as the following:

In most states, limited liability companies (LLCs) are required to create an LLC operating agreement. These operating agreements, essentially function as a set of corporate bylaws, offering guidelines for how an LLC operates as well as owner responsibilities. The documents are often key for responding to legal issues and are legally binding.

Typically LLC’s and corporations are not required to file bylaws and operating agreement documents with the Secretary of State office. They may, however, be requested by lenders, banks, attorneys, and potential investors for various business activities.

To learn more about Equa and sign up for a free trial, please visit us at www.equa.global

What are Articles of Incorporation? 5

What are Articles of Incorporation?

Articles of Incorporation provide the basic legal framework by which a company operates in a particular state or jurisdiction. Considered a public record, it codifies key business activities, owner names, and stock information for the company.

For an LLC, this document is referred to as an “operating agreement.”It describes the operational activities for the company as well as owner responsibilities.

To register a business as a separate entity, Articles of Incorporation must be filed with the Secretary of State’s office in the locale in which the company intends to do business. LLC’s, however, are not required to have an operating agreement or even file one.

Each state has its own requirements for the filing of forms. Accuracy in reporting application information is critical as errors and omissions can put a business at risk for legal issues.

To learn more about Equa and sign up for a free trial, please visit us at www.equa.global

What Is SEC Rule 144? 6

What Is SEC Rule 144?

Maintaining a clean, paper trail of securities transactions is a prevailing issue for many companies. At the nexus of this is SEC Rule 144, which stipulates that certain conditions must be met in order for the sale of securities to take place.

The effective tracking of securities is vital for private companies seeking to enter the public marketplace. Steering clear of knotty compliance issues and delays pursuant to any SEC due diligence reviews is paramount.

A key qualifier for the Rule 144 exemption is meeting the holding period for each security issued prior to resale. Pursuant to the Securities Exchange Act of 1934, an issuing company that’s also a reporting company has a qualifying holding period of six months. For those companies that are not in a reporting capacity, the qualifying holding period is one year.

This holding period commences on the original issuance date of the security, irrespective of resale or conversion. Many private companies, however, fail to track and account for this on their capitalization tables. This can be problematic if an audit is ever conducted.

To learn more about Equa and sign up for a free trial, please visit us at www.equa.global

Cloud storage continues to emerge as the go-to repository for document and data storage. Yet, questions remain about the security and privacy aspects of these sites.

Media attention abounds about hacked databases, data compromises and other intrusions by nefarious internet actors. This has created a torrent of concerns about the secure nature of Dropbox, iCloud, Google Drive, OneDrive and other prominent cloud-based applications.

Here at Equa Start, privacy and security considerations are of the highest importance as we enable businesses to become highly skilled in the navigation of compliance and governance documents.

The Equa data rooms are designed to expedite the advancement and completion of necessary business activities. Along with the excitement growing around the use of permission-based controls, Equa has a system in place to manage user access while monitoring who has viewed a document.

Driven by blockchain technology, Equa’s secure platform offers clients the ability to create data vaults for their documents, including capitalization tables, management, shareholder rights documents, and voting and reporting.

Asked about Equa’s response to the rapidly growing importance of cloud security, Chuck Williams, Lead Developer for Equa Start had this to share:

“As a software developer, questions around security have always been kind of a big and nebulous question because security is not a binary thing. In the end, there is no authoritative source that says this is or is not secure.”

Williams though believes that the most secure thing on the planet currently is the bitcoin blockchain that Equa is employing. “The blockchain has been up and running 99.9% of the time over the past ten years. That gives it the most uptime of any network in human history.”

Equa, he says, because of the setup of its protocol, should give clients comfort in the event of some sort of security issue. Williams concludes:

“Our goal is to execute everything in a manner that allows our clients to still have access to all of their assets and documents written on any blockchain.”

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Data rooms are cloud applications that facilitate the secure storage and sharing of confidential information, including business documents. These virtual constellations are now the norm and are rapidly replacing the need for actual physical documentation.

Properly administered, these systems represent an additional layer of security for business documents. They can also reduce friction when it comes to the movement of documents contributing to the speed and execution of a transaction.

Essentially, a data room acts as a hub for all sorts of engagements that require a robust and secure environment for storage, management, and sharing of business information. These systems then become globally accessible through an internet connection.

Companies facing various forms of due diligence and asset management requests find data room solutions of immense value. They are particularly useful in the facilitation of collaborations and working relationships between business stakeholders.

Traditionally employed in the financial world, data room use cases have experienced a major growth trajectory over the past decade. Mergers and acquisitions and joint venture investments are two realms where virtual data has grown in popularity. Operating agreements, patents, and compliance records are other areas where these digital systems are seeing growing adoption.

In the future, data room solutions will increasingly make use of artificial intelligence and machine learning technology to boost such features as automatic document translations and query management. Other features that are making an advancement include notation systems, advanced permissions, and multi-factor authentication.

Then there’s the emergence of Blockchain that promises to upend the world of traditional archiving, with secure data rooms validated with the timestamping phase of a transaction.

Below is a list of common questions and answers about the Equa data room and why Equa represents such a promising new normal for businesses and enterprises.

How are documents transferred into the Equa data room?

The client success team will work with you every step of the way to ensure an easy and secure upload of your files to the Equa data room. Through this manual process, we collect everything our clients need to set up a corporate data room successfully. We conduct a thorough gap analysis of your documents before migrating them into our system.

As we begin to digitize the individual and unique clauses of operating documents, vendor documents, employment documents, cap tables, — anything tied to governance and compliance activities within your organization, we will turn all of those documents into digital forms that will be updatable and changeable as you progress through your business cycles. Our aim is to ensure a smooth and safe transmittal of this information.

Who manages a data room, Equa or the client?

The aim is for both Equa and you, the client, to have full administrative control over the contents of a data room. What that means is, while Equa could produce documents that could land in your data room, you as a client will also have your own documents that you’ll want to upload and manage.

What makes the Equa data room so valuable?

Keeping track of myriad business documents is an immense, time-consuming hassle for most organizations. A compliance review can be an absolute nightmare as well, unless you’re fortunate enough to have a really good lawyer who’s exquisitely well organized with files and can retrieve them on a moments notice. The value of a data room is in this retrievability, along with the accessibility and authoritativeness of having the most recent, up to date independently verifiable source of a document.

How easily can we retrieve documents?

With Equa, not only are your documents retrievable on a moment’s notice, but you also have the ability to amend them very quickly. And it’s very cost-effective compared to other options.

How do we engage with the Equa platform once our documents have been downloaded?

Our intuitive dashboard comes with simple and easy-to-understand workflows to ensure a world-class user experience. This, in turn, helps to boost the overall efficiency of your document storage and retrieval processes.

What if we want to make changes to a document?

The ability to make changes or amendments to any governing document is essential to ensuring the most up to date, accurate repository. Equa provides a seamless platform for ensuring a single source of truth for all your documents.

How does this update and access process actually occur?

Once uploaded, we’ll produce the original documents which will allow those designated to digitally signed these documents. We will also create hashed versions of these for the blockchain with those links of information stored within our system so you can see the who and when of any amendments to the document.

Who controls access to these documents?

Once you make changes to, say, a Capitalization Table or other operational document, we’re going to back that up on a blockchain, creating a public record that’s independently verifiable by each individual who had access to the original document via a private key. Here at Equa, we’ll help you manage and control access to those documents, along with providing auditable records of all of who accessed them and when they were accessed.

And who can be given access?

That’s for you to determine. It could include two corporate administrators, a president and a vice-president, the corporate lawyer or employees who have been issued stocks in an organization. Each person is going to have different levels of access to the data room, or different data rooms specific to their needs. Those different levels of access will provide them with different pieces of information that are appropriate for their levels of exposure.

Is there a particular protocol that ensures this access?

Essentially what we’re talking about here is data storage with private key encryption and basic log in protection which allows each person access at the appropriate levels. Audit trails are then going to tag along as people with the right credentials are able to access certain documents.

What about our paper documents?

Paper versions do ultimately get filed with some jurisdictional or government agency. The good news is that digital options to file those paper versions have been developed. Those are the types of partnerships we’re looking to build through Equa over time.

What is the ultimate value proposition that Equa delivers?

For both you as a business and your community of stakeholders, your cost and productivity value exponentially increase in terms of greater efficiencies around agreements. Decisions can be made more quickly with the rapid processing and dissemination of information. It’s like rocket fuel for businesses that want to move more quickly while staying compliant.

Whenever a new business is launched, it’s long-term survival is a key aim.This is symbolized by a “Built to Last” mentality, a theme popularized by management guru Jim Collins, co-author of a popular business book by the same name.

The evolution of a business can be very ephemeral and uncertain. Moreover, poorly designed systems, mismanagement, and neglect can quickly sink a company. This symbolizes a terribly weak, fragile infrastructure. For often it’s not outside influence that destroys a company but rather inside neglect.

In his bestselling book Antifragile, author and prominent thought-leader Nassim Taleb explores a concept known as fragility through the lens of the following metaphor:

At some point, you’ve likely received a package in the mail at some point in your life marked:

FRAGILE: PLEASE HANDLE WITH CARE

But have you ever received a box that says

PLEASE MISHANDLE THIS BOX AND DROP IT?

Most likely you haven’t

In Taleb’s taxonomy, fragility reflects the inclination to ignore risks. Or to be overwhelmed in monitoring the risks in an attempt to survive and prevent disaster.

That’s the state of many companies and their document systems — they’re massively unprepared for unforeseen risks, what Taleb affectionately refers to as “Black Swan events.” An example of this would be a major compliance audit, where a company discovers major deficiencies in their document systems.

So what is the antithesis of fragile? Given that we don’t really even have a word define it, Taleb took it upon himself to invent it.

And he calls it:

ANTIFRAGILE

To approach this from an antifragile point of view means to do so with strength, wisdom, systems, and resources. This allows a company to not only survive, but prosper amidst the uncertainty, and turbulence of these events.

In explaining his own personal proclivities in terms of antifragility, Taleb is fond of saying:

“I want to live happily in a world I don’t understand.”

Skin In The Game

“Skin in the game” according to Taleb is the foundation of risk management. As he says, “The symmetry of skin in the game is a simple rule that’s necessary for fairness and justice and the ultimate BS-buster. Furthermore, he says: “Never trust anyone who doesn’t have skin in the game. Without it, fools and crooks will benefit, and their mistakes will never come back to haunt them.”

Chuck Williams, Lead Developer for Equa START and huge fan of Taleb“antifragility” model argues that business owners, investors, entrepreneurs, change-makers, innovators, creators, and builders all inherently recognize that an important attribute that should never get lost in the shuffle irrespective of how much money a company makes is the reward of a personal achievement that aligns with one’s identity. In fact, it is for this very reason, he believes, that our identity is often wrapped up in the work and projects to which we are most dedicated.

Says Williams:

“Equa enables participants to manage their portions of “skin” (identity), in the form of legally recognized equity (backed BOTH by reviewed legal documentation, and blockchain-enabled asset issuance of stock & equity agreements) and allocate these across and among multiple organizations within their networks and communities.”

According to Williams, we call this “ownership.” Being an owner of an organization, project, or even simple task, he believes, measurably improves results for EVERYONE involved.

“As an “Agreements Service Management Platform” the #1 goal of Equa is to structure, maintain, protect, solidify, communicate, and amend AGREEMENTS. In business, ALL failures and ruin can be easily traced back to failures in an agreement due to the lack of or failure to effectively execute these types of agreement activities.”

Williams goes on to note that company agreements that are not structured properly with regulators may lead to the IRS, SEC, or CFTC knocking at your door.

“Failure to maintain these filings can get you slapped with fines, or worse, shut-down by government agencies. Moreover, a lack of due diligence in protecting the authenticity of your agreements can leave you with a worthless bill of goods.”

Concludes Williams:

“Communications, finalizations, and amendment of agreements manifest as Operating Agreements, Board Meetings, and Voting activities. All of these activities are centered on keeping organization agreements alive, functional, relevant, pragmatic, and true. This greatly reduces the risk of ruin for any organization.”

Delivering proactive, highly personalized service is a hallmark of Equa’s value proposition to clients. In this brief Q&A, we asked customer success team members, Kyle Croyle, and Andrea Stevens, to discuss their approach to delivering exceptional service during the client onboarding stage and beyond.

What does a typical day look like for the two of you?

Kyle: While Cap Tables are a key element of what we do for clients, there are so many other areas where we can deliver value. This isn’t the type of stuff that’s taught in any school. So for our clients, a lot of it is just learning on the fly.

Andrea: We offer companies a foundation that allows them to effectively engage with their startup employees. Unfortunately, a lot of these businesses miss out on this opportunity to reinforce what they’re building.

Kyle: Agreed. The system we offer provides a great way for our client companies to build loyalty within their organization through transparency. It’s all about exposing everyone to those numbers.

What sort of problems are business owners facing these days?

Andrea: Business owners are inundated with emails and people sending them different documents. And then to make matters worse, these documents are often printed and placed in a paper file.

Maybe in a year, they’ll need to pull together an investor recap. Or maybe there’s an investor that comes on board who wants to see the Cap Table. All of a sudden the business owner has to pour through their email or other document files to try to locate all of this information.

EquaProfile: Customer Success Team Members Kyle Croyle and Andrea Stevens 7

So how exactly does Equa START begin simplifying things for founders and business owners?

Andrea: They often want support in streamlining their process. We never again want them to wonder if the Cap Table they pulled off their drive is updated. Then there’s the information necessary for compliance. Some of it could be at their attorney’s office, some could be in a file drawer. Or they could have no clue as to where it is. So there are all of these nuances that onboarding at Equa is going to make so much easier for the business owner.

Kyle: Most startups do not have CFO’s. And if they do it’s a part-time CFO, maybe even an advisor. But as the founder of a company, you wouldn’t want to spend hours dealing with compliance and investor documentation, cap tables, things like that. So there is simplistic value in what we offer because that workload is being migrated over to Equa. This allows owners to focus on the important business at hand.

And how can Equa help the business owner save on costs?

Kyle: If you are a startup you may have a law or CPA firm representing you and drafting things like corporate formation documents and other stuff. But because they’re so expensive, you’ll try your best not have to turn to them for anything but the most important matters.

EquaProfile: Customer Success Team Members Kyle Croyle and Andrea Stevens 8

So what do you say to those startups who are confronted with this yet are inclined to cut a corner or two to save on expenses?

Kyle: Yes, there are companies where the mentality is essentially if we mess up or don’t complete something, we’ll ask for forgiveness later. There’s this blind hope that the SEC, FINRA or other regulatory body is not going to care. But let’s be real — the ultimate goal of any startup business is to grow and be profitable as soon as possible. But it’s equally important for these businesses, however, to recognize that everything they’re doing, running up to that hyper-growth scenario, will be uncovered, scrutinized and audited eventually. That’s where the big risk lies.

Kyle, you’ve had your own personal experiences in running a business and dealing with compliance. What was that like?

Kyle: Yes. As a founder of a company, I was scared shitless about managing everything to do with document compliance, particularly those involving investors because I’m not a lawyer. So off-loading all of this on someone like Equa would have offered some peace of mind in addition to taking a ton of actual workload off my plate.

Andrea, anything to add to this?

Andrea: A lot of entrepreneurs are of the thinking, “I’ll build this business and then I’ll sell it”. Great! But if they’ve never done an M&A, they have no clue as to the kind of due diligence they have to go through. In fact, they often do things that make them less desirable when the day comes for an acquisition. So, it begs the question of why even start a company if you’re going to fall into that trap.

Kyle: To piggyback on that, while taking a frugal approach at the early stages of a business is understandable, a company may be opening themselves up to problems down the line. They could end up paying for it financially later on by spending 10X in fees to remedy all of the things that were left incomplete.

What’s the message you’re trying to convey here for businesses?

Andrea: That while it’s hard to have the foresight to address these things early on, I believe it’s imperative for their survival and ultimate success. That’s why the pricing model we offer here at Equa is so attractive, well within a startup’s budget even if they’ve raised a little bit of money. It’s helpful in terms of saving dollars while preventing what could be costly compliance issues. We’re here to help them get that foundation right.

Kyle: You are so right, Andrea. This should be viewed as a long-term versus short term proposition for businesses. Unfortunately, many companies are trying to manage finances in a way that has a short-term effect. Eventually, they could end up paying thousands more than they would than if they’re working with us here at Equa.

So what’s the first step for a business that wants to get started with Equa START?

Andrea: Currently we’re asking new clients that we are on-boarding for some core documents like bylaws, operating documents, shareholder documents, member documents, and a cap table if they have these. At that point, we’ll take those uploaded documents, review them and make sure that they’re all in place and signed. Once all of this has occurred, we’ll have a discovery (check-in) call with the client to ensure that they understand what they’re seeing before moving onto the next step.

Next steps?

Andrea: Well, thismight involve developing a Cap Table for them. Or assisting them with any due diligence needed around the documents they should have in place at any stage of their business.

Kyle: The goal for the customer success team is to ensure that we’re delivering as seamless of a process as possible in terms of the on-boarding. We’ll require a number of upfront documents, as Andrea mentioned, but then we work hand in hand with the client in getting that information into our tech-enabled environment here at Equa. Once all of the data is in there, there are a lot of possibilities on what can be done with it.

Any final thoughts?

Kyle: Andrea and I believe that customer success should be inherently proactive. Thus it is important for us to develop a solid understanding of your uniqueness as a client. Our emphasis is getting to know all of our clients on a deep level through our discovery and gap analysis process. Through our team skillset, we’ll be able to help a business not just set up a Cap Table but also assist in directing them to additional resources that can help the business become more profitable and feel greater peace of mind.

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