This article will walk you through the process of uploading equity financing documents that were drafted and executed outside the system to Shoobx. The workflow will capture the required data, update your capitalization table, and store the documents for you in Shoobx.
If you are looking for information about completing an equity financing on Shoobx, please visit this article.
The Initial Document List
Here are the documents that you will need to have handy to complete this workflow. For each document, you will have the option to "Select from Data Room," "Upload from Computer" or "Defer Document" unless otherwise indicated:
- Stock Purchase Agreement
- Amended and Restated Charter (or Certificate of Incorporation)
- Amended Stock Incentive Plan (if applicable, mandatory upload)
- Voting Agreement
- Right of First Refusal and Co-Sale Agreement
- Investor Rights Agreement
It is also recommended that you have the Board and Stockholder Consents, Management Rights Letters, Indemnification Agreements, and any other ancillary documents handy.
Updating and Creating Stock Classes
Enter the terms of your newly created security in Shoobx. Shoobx will ask for the following information:
The next page in this workflow will allow you to revise your company's liquidation stack.
Next, Shoobx will ask you to add each investor associated with this financing. You will need to know their legal name or investment entity title, the email for each investor's representative, the stock class they purchased, investment amount, and shares purchased during this financing.
Stock Certificate Legends
Next you will enter the legends that will appear on your stock certificates. Stock certificate legends are required notices to inform the shareholder that they must comply with the applicable laws and company agreements restricting the sale, transfer, or pledge of the shares. Your lawyer can advise you on which legends should be included.
Clicking on the paper and pen icon to the right of each class' certificate will allow you to review and add legends to your certificates.
Creating or Documenting Certificates
On this page, you will notice an "Info Needed" button next to each investor previously documented. Clicking on this button will allow you to "Upload or Defer Stock Certificate(s)" or "Have Shoobx Generate A Stock Certificate For This Transaction." If you decide to defer, you will still need to know the certificate number for each investor.
If this is a new class, you can start at 1 and go from there. For instance, in a Series A financing, you would start with A-1.
Management Rights Letters and Other Documents
Next you will upload any Management Rights Letters and any additional documents that were executed as a part of the financing, such as Indemnification Agreements or Side Letters.
Stock Incentive Plan Details
If you have amended your SIP, Shoobx will ask you to set the new number of shares allocated in your pool. When asked to provide the amendment itself, you can select the Board Consent for the financing, assuming the approval is contained in that document.
Board Structure and Approval
Next, you will record any changes to your company's Board. Adding a new seat will require the following information:
This step will also ask for the Board Consent approving the transaction and related matters.
Stockholder Approval and Optional Data Upload
Next you will be asked to upload the Stockholder Consent for your financing, and then select which items below were changed in the course of the financing, so Shoobx can capture those terms:
- Corporate Terms for Voting
- Protective Provisions
- Employee Matters
- Financing Terms
- Ownership Terms for Specific Classes
- Capture Amendment Percentages
Should you need assistance identifying what terms have changed as part of your financing, we recommend speaking with your attorney.
Once you pass the Checkpoint screen (where you will have the option to have your attorney review the information you provided), you have finished uploading your equity financing in Shoobx. Your cap table has been updated, and your financing documents are stored in your Data Room.