You are using your own equity or have received investments from close friends or family.
You are keeping the records yourself, likely on a spreadsheet.
It works reasonably well for now. There are only a handful of investors that you most likely know.
No. As you grow and add investors, it will be more difficult to manage a spreadsheet. And a spreadsheet does not secure sensitive investor data.
You have secured investments from angel investors, venture capital or through crowdfunding efforts.
Records are being kept by you, the CEO or CFO, or by your law firm. In some cases, a transfer agent is brought in.
It is working well enough but the number of investors is growing and it is time consuming to ensure the records are kept in a timely fashion.
In-house records may not meet the demand for higher transparency needed by an increasing number of investors and can fall by the wayside due to lack of resources. A law firm does a good job of keeping the data but often their costs are high and systems are not scalable.
Whether you are raising capital through multiple series, a traditional IPO, a mini IPO or a hybrid, your investors can include traditional venture capital firms, equity crowdfunding, or individual accredited investors.
Records are kept by a law firm, accounting firm or transfer agent. If you are raising money under Regulation A+, you must use an SEC registered transfer agent.
A law or accounting firm is more secure than managing in house, but can be costly and may not accommodate growing numbers of investors. Raising capital in this stage requires a high standard of corporate governance.
A law firm or accounting firm does a good job of keeping the data but often their systems are not scalable and the costs can be high.
A transfer agent, like Computershare can take on the administrative burden at a reasonable cost and also offer tools that allow your investors access to their holdings, taking the burden of investor communications off your plate.