As the single source of truth when it comes to equity management, online cap tables have to ensure that startups’ data is always available and accurate. These characteristics prove to be invaluable in every single fundraising event, due diligence, exit, etc. To ensure the accurate and always available information, digital signatures are a necessary addition.
Through conversations with fellow founders, a common theme emerged: When going through processes such as signing dozens of news stock option plans every month or getting funding documents signed by all shareholders, delays and administrative hassle were always a problem.
A particular example that inspired us to try to improve one of the delay-prone processes was a 30 day waiting period to receive a single signature. This wasn’t because of laziness but purely because of the waiting times. The postman had to hand-deliver the handwritten signature to the stakeholder and then back to the startup.
In this particular example, the whole due diligence process and term sheet negotiations were delayed. The cap table was ready and attached to the contracts, the financial projections were calculated and yet everyone had to wait for the final signature of a 30-minute board meeting from a year ago.
At first glance, the signatures are just a small part of the startup workflow, but it has happened far too often that a single missing signature delayed important milestones.
Every startup needs to have all the required signatures. The best-case scenario is to have them all of the time and if that’s not possible, they have to be there when the legal institutions check-in.
If Ledgy as an equity management solution really wants to help startups become more successful, we had to start thinking about the whole ecosystem and all of its processes.
As seen from the example above the bottleneck is the process of retrieving and storing signed documents. Ledgy is now here to help.
Although there are existing platforms for signing documents digitally, we found it’s crucial to have the signed documents linked to equity transactions.
This way, documents are stored exactly where they were relevant and are thus easier to find and track. This is particularly crucial when going through due diligence and makes it way easier and less expensive for startups.
The addition of digital signatures significantly shortens the process of granting employee incentives. With Ledgy the workflow follows similar steps as they happen in person, but faster and with additional features.
You have the ability to request and receive signatures in seconds, track progress and attach signed documents to relevant employee incentive transactions.
The workflow in action:
After you import the grants and documents, Ledgy takes care of the rest:
Note: Digital signatures are available to all Premium and Enterprise plan customers.
Ever since eIDAS was implemented, the member states are required to recognize electronic signatures that meet the eIDAS standards. There are three digital signature levels:
A collaboration with the Bundesdruckerei allowed Ledgy to become a certified signing provider for SES. Who better to trust with online legally valid signatures than the backbone of identity cards and passports, the Federal Printer or “Bundesdruckerei” in German. The Bundesdruckerei has been manufacturing and providing legal documents for the last 250 years. In the coming months, Ledgy will, together with Skribble, roll out the AES and QES EU-wide as well.
The majority of HR and financial corporate transactions do not require a specific electronic signature under EU law. For example in Germany VSOP grants do not have a formal requirement and therefore can be signed digitally to be legally valid. A Standard Electronic Signature (SES) is sufficient.
The rest of the legal requirements for document signing are described in the help article.