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Why raise is joining the open cap table coalition

Raise is thrilled to join the Open Cap Table Coalition as a new member alongside industry leaders like Carta, Pulley, LTSE, and Shareworks, with global law firms like Gunderson, Cooley, and Gunderson. Together, we’re building the world’s first open-source Github for equity and ownership data. Our shared goal is to enable any Pan-African startup to move between cap table software systems and build a single source of truth for you and your shareholders' ownership.

Cap Tables & Equity
Cap Tables & Equity
Cap Tables & Equity

Marvin H. Coleby

April 17, 2021

Raise is thrilled to join the Open Cap Table Coalition as a new member alongside industry leaders like Carta, Pulley, LTSE, and Shareworks, with global law firms like Gunderson, Cooley, and Gunderson. Together, we’re building the world’s first open-source Github for equity and ownership data. Our shared goal is to enable any Pan-African startup to move between cap table software systems and build a single source of truth for you and your shareholders' ownership.

What is a cap table?

A capitalization table (or “cap table”) is a list of shareholders and owners of a company. It tells you who owns how much of a company, and the rights they have in that company.

We see a lot of cap tables for Pan-African startups at raise. For every new company that we onboard, we help clean up the ownership structure and verify it against legal documentation. We’ve onboarded hundreds of cap tables in African tech and hundreds of millions of dollars in deal volume. Joining the Open Cap Table Coalition means we can continue to drive the standardization of equity and ownership data in our ecosystem. This means that over time we will adopt these open source standards into our code base and core products.

We are the first Pan-African headquartered company to join the Open Cap Table Coalition, and we’re excited to build integrations, compliance across 15+ countries in Africa, and web3 standards for mirror-shares. We are joining the coalition for three reasons:

  1. For you, our customers, to build more stable and powerful equity tools
  2. To standardize and integrate equity tools throughout the Pan-African tech ecosystem
  3. Build the Raise Protocol to access crypto & liquidity

Powerful and stable equity tools to grow your Pan-African business

Up until now, we’ve been building equity software without any real open source tools. That is like building a Javascript front end, without Javascript standards. As a result, we spend way too much time fighting technical debt, and not enough time building strong architecture for you all to have a smooth product experience every time.

Here is what you can expect to come your way:

  • Smoother and safer experience on Raise ⚡️ This will mean that your customer experience on Raise will be smoother, with fewer bugs and international plug-ins that make global compliance for your Delaware, UK, UAE, Nigeria, Kenyan, or South African company cheaper, simpler, and faster. Cleaner code quality with industry-level standards means we can ship your feature requests faster, with more accuracy and simplicity across the countries you care about.
  • Integrating African tax & corporate regulations 🌍 You are a Pan-African business. Our goal is to give you visibility over your entire global corporate structure, but most equity tools today only help you onboard your Delaware, UAE, or Cayman company. These new standards will empower you with tools to manage your local African subsidiaries and identify any tax or regulatory obligations that could affect your equity ownership or shareholders.
  • Powerful and cleaner equity data 🧼 - Standardized equity software means that ownership across Delaware, Cayman, UAE, and African subsidiaries will be much easier to track and far more accurate than ever before. With this data, you will be able to model more accurate financing scenarios and exit opportunities for investors with tax implications for the entire company as you grow past pre-seed, seed & series A statuses 🦄
  • Onboard onto Raise will be more seamless 📚 if you’re already using other cap table platforms it will be easier than ever to transfer that data and onboard onto raise. Our team is fully trained on migrating data from other platforms and can help you get set up on Raise faster, with fewer mistakes.

Build standards and integrations into your favorite tools

Nearly all equity and ownership structures are wrong when they get to our onboarding managers. Most early and mid-stage companies use excel to track equity ownership. But, the real truth of your ownership structure is buried deep in paper documents. The truth is, many of us in the Pan-African tech ecosystem do not do a good job at maintaining our latest equity ownership. This space is new to many of us, and we’re balancing building global businesses while having to figure out what a liquidation preference is.

Unfortunately, this problem gets worse as the amount of money you fundraise increases - this is because as startups get into later stages, their ownership gets more complicated. That means that your latest ownership percentage may be lower than you actually think, valuation caps are too high, or members of your team could be liable for insanely high taxes across multiple African jurisdictions without you knowing.

So, while we’re on vibes and celebrating each funding milestone. Really, we’re making our company structures worse each time.

This is especially problematic in our Pan-African ecosystem where funding is concentrated in just a few companies, we are in a market downturn and we are heavily funded by foreign investors. Enabling local capital for our ecosystem means empowering local investors and operators with better equity tools and visibility over their ownership of your company.

We don’t only need to sell SAFEs and preferred shares. We can use convertible debt, lending-as-a-service, and crypto-currency transactions that can be used to increase liquidity and leverage unique financing tools for our startups across Africa.

These standards with the Open Cap Table Coalition mean we are one step closer to enabling our ecosystem to grow with the right equity tools and help us fix ownership structures even faster than before.

It also means integrations with your favorite tools in the ecosystem:

  • Send SAFEs through Zapier to trigger a wire transfer of cash from an investor into Mercury or Flutterwave.
  • Upload your Pariti score automatically to deal rooms, and run scenarios within Pariti's deal room.
  • Automate your shareholders' identity & financial transactions with Mono, Okra, Smile Identity, and Stitch.
  • Create companies or SPVs in seconds with Norebase and Simple.Capital.
  • Integrate lending as a service for startups with Credable and Evolve Credit.
  • Plug-in market intelligence data from Briter and StartupList Africa.
  • Fundraise from your community & investors through different platforms like Pariti, Figg, and GetEquity.

Build the Raise Protocol for decentralized finance

Now, for our fellow crypto-heads and web3 people.

A core part of our mission and identity is to build a liquidity and trading protocol for Africa’s capital markets. Over the years this has been deep in research, and these standards bring us closer to realizing that dream. A liquidity protocol means that startup equity, real estate, and assets across Africa can be digitized to operate and integrate with smart contract protocols. With this, we can explore new kinds of liquid securities in web3 that we have experimented with:

  • Earn Bitcoin for holding stock options in your favorite company as an employee.
  • Swap preferred shares in multiple companies and automate the transfer restrictions.
  • Run secondary transactions to drive liquidity events.
  • Invest in startups directly from Yellow Card, and your favorite wallets in the industry.
  • Leverage OTC desks like Buycoins, Lazerpay, Honeycoin, Bamboo, Yellowcard, and Cowrywise to automate swaps (AMM’s) of large chunks of equity across the Pan-African tech marketplace.
  • Bundle indexed assets (e.g. Nigerian Fintech fund) through an investor dashboard.

Those are just some of the many ideas in research and development at the moment. However, they all start with the right standards for equity tools and cap tables. As a member of the Open Cap Table coalition, we can leverage these tools and our experience with smart contracts to build the right equity & DeFi infrastructure. We are excited to be a part of the coalition because we’ve been ready for this for a few years:

  • We helped build the continent’s first digital asset framework with the African Union, African Development Bank, and 5+ countries. View more details here.
  • Participated in the drafting of digital securities acts across multiple countries.
  • Architected a security token framework with Africa’s largest law firm. Find more details here.
  • Wrote 6+ papers and memorandums on architecture for security tokens

What’s next

Here at raise, we’re all about making equity ownership simple. We’re delighted to be a part of this industry initiative and as time goes on we will be providing feedback with the Open Cap Table Coalition to provide support in building out web3 and Pan-African regulations into the codebase. From there, we’ll start incorporating those standards into our product development process.

We’re here to create more transparency, accessibility, and trust across the Pan-African tech ecosystem. Watch this space!