Creating Share Classes

Capdesk makes it easy for your to manage your share classes on a single page.

While setting up a share class, inputs will allow Capdesk to run calculations:

• Nominal value.
• Votes.
• Liquidation preference.
• Seniority.
• Liquidation preference multiple.
• Participates after preference.
• Has preference participation cap.

1. Navigate to Ownership > Shares > Classes.

2. Click Add share class.

3. Fill out the appropriate information in the form and click Save.

The required fields are marked with a red asterisk:

• Name - Share class name.
• Approval date - When the share class was approved.
• Currency - The currency used to determine the share price.
• Nominal value - The nominal value of one share of the class, as used for legal and accounting purposes.
• Votes - Number of stakeholder votes per share.

4. The share class will be created and you will be redirected to the Classes page.

5. A share class can be removed, as long as there are no issuances linked to it. You can remove a share class by clicking on the Actions Button located on the right-hand side of the share class > Remove.

6. You can modify a share class at any time, by clicking on the Actions Button located on the right-hand side of the share class > Modify. Note that the share class currency can only be modified if there are no issuances linked to the share class.

Nominal Value

Setting the nominal value in Capdesk will affect the computed share capital of the company (the part of the capital of a company that comes from the issue of shares). Share capital is calculated by multiplying the number of shares outstanding by the shares nominal value

Votes

The number of votes per share will affected the total computed votes. You will be able to see the votes per share in the Classes page and the percentage of votes by share class and stakeholder, under Ownership > Cap table.

Liquidation Preference

Check Liquidation preference box to give preferential rights in the case of liquidation i.e. the share class gets part of the proceeds at a liquidation before other shareholders. Check the box to expand the liquidation preferences available.

Seniority

Seniority is the liquidation rank. A higher seniority means higher priority in a liquidation event i.e. they get proceeds before other share classes of a lower, (or no preference), rank.

Liquidation Preference Multiple

This value multiplies the investment for shareholders of this share class, (with liquidation preference) e.g., with an investment of 100 and a multiple of 2, the shareholder gets 200 before any remaining proceeds are distributed to shareholders (with lower seniority).

Participates After Preference

This checkbox is used if preferred shareholders are to participate after the initial proceeds have been distributed. If there is no participation, shareholders will receive their liquidation preference, but nothing after that amount i.e. they do not participate with their ownership ratio for the remaining amount. If this is checked, Has preference cap will be displayed.

Has Preference Participation Cap

Checking Has preference cap allows for a limit on how much a stakeholder can participate after the liquidation rights have been fulfilled. If this is checked, Participation cap multiple will be displayed.