Shareholders — you love them, hate them, and can’t live without them, but regardless of your personal sentiments, they want to stay informed.
Sharewave can help with the last part.
The company is developing software that makes it easier for private companies to communicate with their shareholders. It has tools for creating a clear visualization of a cap table, with columns for ownership percentage, dates, and terms as well as the ability to track the progression of outstanding grants and options.
Cofounder and CEO Joshua Levine is the former CTO of E*Trade.
“Private companies use many disparate ways to connect with their board members, employees, shareholders, potential investors, lawyers, and accountants,” he told VentureBeat. “Usually it takes a combination of postal mail, email, fax, Fedex, spreadsheets, presentations, documents, etc. and always the same result — lost or unsigned documents, misinformation and miscommunication. Our platform lets companies spend more time building their business and less time dealing with information-craving shareholders.”
In 2012, Sharewave’s founding team set out to build a crowdfunding platform following the passage of the JOBS Act and the growth of marketplaces like Kickstarter and AngelList.
Under the JOBS Act, private companies can now publicly state that they are raising money, which opens them up to a wider pool of investors. Coming soon is a provision that will allow unaccredited investors to make equity investments.
Services like FundersClub and WeFunder power online crowdfunding platforms for accredited investors only, and AngelList recently launched a syndicates feature that lets investors band together to support companies they believe in.
All of these forces are making it easier for entrepreneurs to raise money, but they also complicate the already-complex world of private finance and throw additional kinks into company structure.
Sharewave’s founders realized that with all these changes, companies would need more help managing their current shareholders than finding new ones.
“Private financing is evolving,” Levine said. “Private companies are increasing in number, and are more likely to enter the fundraising arena with newer, more flexible forms of financing, and private investors are also on the rise. The tools to support private companies and their shareholders have to evolve as well.”
Sharewave stores and models company ownership data in the cloud, as well as valuation data, employee stock and option grants, board presentations, resolutions and minutes, and investor communication history. It also has solutions for organizing and signing documents with an audit trail, and companies can set different permissions for different shareholders.
Shareholders can keep track of their investments on Sharewave, access current company information, and consider their personal stake when making future financial decisions without having to hound the entrepreneurs.
Levine said that most of the solutions out there are built for partners in venture capital and private equity firms to keep track of their investments. Competitors include DocDep, IntraLinks, TruEquity, Eshares, and Solium. Sharewave goes at it from the other side, by selling to the companies.
The service is free for small startups and has monthly subscription plans for larger companies.
Cofounders include CTO Robert Lefkowitz, an engineer who has built financial trading systems at Morgan Stanley and Merrill Lynch, COO Dexter Liu, and CMO Alan McGee.
Sharewave is still in beta and currently has 400 invitation requests.
It is based in New York and is currently self-funded.