Welcome to Cake! 🍰

We're super excited to see you throwing in the towel with spreadsheets and moving into the world of Cake. As we like to say, equity should be a piece of Cake and we are here to make sure of it!

First thing's first - let's get you set up.

This article will take you through the key steps to set up your company correctly on the platform and ultimately set you up for success! From importing your existing share registry, importing your ESOP (or setting up a new one) and inviting your stakeholders, we'll cover all the basics here so read on!

The article is split into the following sections. Feel free to skip to what is going to be most relevant for you first up -

  1. Importing your Cake (Cap Table)

  2. Importing your ESOP

  3. Set up a new ESOP

  4. Inviting your Stakeholders

  5. Connect with our legal & accounting partners

  6. Educational resources

If you're hungry for more (because let's face it, you can never have enough Cake!), you can continue to read more about the platform in's and out's in our How-to section.

Step 1: Importing your Cake

Watch this 5 minute video on uploading your shareholders or scroll down for detailed instructions!

Rather than just uploading the current shareholdings into your Cake account, we recommend building out the transaction history to create a full Register of Members - in other words, if you have a complete record of everything that has happened since your company was first incorporated, let's built that out in Cake!

If you have a relatively straight forward share registry (let's say, less than 10 shareholders), we recommend adding the transactions in one at a time into Cake.

  1. Head to Equity --> Shares

  2. Use the + Add button in the top right corner to issue shares, or check out the 'More' button next to this to add in share transfers, a share split, company buy-back or share conversion.

  3. Start with the shares that were first issued when you registered the company and continue to build out what transactions have happened since. It's really that simple!

For more complex structures, perhaps you might want to use our Bulk Upload Template. Check out the Instructions tab for a quick video on how to use the template. You can use the template to quickly import share allotments, transfers and buy-backs but for share splits and share conversions, these will need to be added in manually!

If the above options don't appeal to you and you just want to get your existing share registry into Cake so you can move onto bigger and better baking, why not get our customer success team to take care of it for you? We'll aim to get it uploaded to your account within 48 hours AND it's free, so you can sit back and focus on your next steps. Just look for the link in the bottom left corner of your account to notify the team or use the chat in the bottom right corner 💬

Step 2: Importing your ESOP

Watch this 6 minute video on uploading your ESOP or scroll down for detailed instructions!

Similar to importing your existing share registry, we recommend adding all historical ESOP grants into Cake. To get started, head to Equity --> Options.

The first thing you need to do is create your option plan - in other words, how big is your Cake? When setting up the option plan, you are prompted with two options (no pun intended) - do it yourself or get Cake to help you. The headings really speak for themselves, but let's go into them in more detail anyway.

Do it yourself -

Firstly, set up your total option plan (i.e. total allocated + total unallocated options in your pool).

If you have a fairly straight forward option plan at this stage, it's super easy to add your options into the pool one at a time. Whether it is an already granted offer or a new offer, the process is the same at this stage.

Click + Add Offer and in the editing window, complete the four quick steps to add in the information on your existing grants. N.B. any options that have been exercised, lapsed or manually vested since the initial grant, this information will be added in down the track so can be left out for now.

  1. Add the employee name & email (optional)

  2. Specify the total number of options they were granted (including any already exercised or lapsed options)

  3. Vesting - you will notice we have set up standard time-based vesting as the default in your account when setting up your grants (i.e. 4 year vesting with a 1 year cliff period). If your existing grants have a different vesting schedule to this, no problem at all! Just click on customise vesting schedule and add in the relevant details for your offer. If you need any help with working out how to customise a specific vesting schedule in the platform, just send us a message and we'd be happy to draft one as an example for you!

  4. Final offer details - add the vesting start date (the date that kicks off your time-based vesting) and the exercise price (the price the employee pays to convert their options to shares).

Once you have saved the offer, this is where the process differs if your offer has already been accepted outside of Cake compared to sending a new offer. For existing ESOP grants, click on More and you will see Grant. Pop in the grant date and upload the executed Offer Letter to link it to the offer in Cake. This will also ensure the employee has access to the final offer document when you give them access.

After finalising the offers, if relevant you can move onto exercising or lapsing any relevant options! Otherwise, skip down to step 4 to read how you can invite your employees to get set up with their own access to Cake.

Get Cake to help you -

As the name suggests, we are more than happy to get your existing ESOP offers uploaded and granted in your account for you. We know how busy founders are and migrating your existing employee offers out of spreadsheets and into a new platform may not be sitting at the top of your to-do list, so why keep pushing it down the list?

Just upload your existing spreadsheet in the link provided with the following details, and we'll take care of it!

  • Employee name & email

  • Total # of Options

  • Vesting Schedule

  • Vesting Start Date & Grant Date

  • Exercise Price

Step 3: Set up an ESOP

If you're new to the world of employee equity, not to worry! Most will even argue that you've come to Cake at the best possible time.

We have taken all of the stress, uncertainty and guess work out of setting up an employee share option plan with our best practice standards and offer documents, you really couldn't be in better hands!

Head to Equity --> Options and get started in just a couple of clicks. We know what you might be thinking - just a couple of clicks? We couldn't tell you the number of times we've heard founders tell us they've spent the last 6-12 months telling their employees that "offers are coming"! Well, gone are those times because it's never been easier than it is through Cake.

Select + New Option Plan and pick the 'do it yourself' option on the left. This will prompt you to set up a standard 10% option pool based (calculated on fully diluted equity). If you haven't completed step 1 above, no problem! You can just add in the total shares on issue in the company into the relevant field here and let the platform work it's magic (i.e. calculate 10% for you).

Once you have created the Option Plan, you're one step closer to getting those offers out the door. Head to the Contracts tab of your option plan to check out our standard offer templates including the Offer Letter, Plan Rules and should you require them, the Shareholders Resolution and Directors Resolution. All of our templates are completely editable so you can make any relevant amendments by clicking 'Edit Template'. Our contract engine automatically saves any changes, so once you have made the necessary updates, just exit the tab and refresh Cake!

Next, let's start to add in your individual offers. This is a super simple 4 step process -

  1. Add the employee - all you need is their full name & email (once you send out the offer, the employee will be prompted to add their remaining contact information)

  2. Specify the total number of options you want to offer them - you can either do this on a percentage basis or specify the exact number. Not sure how much to give? Check out our article here on how to distribute your employee equity the right way.

  3. Vesting - we've set up standard time-based vesting as the default for your offers. We see a lot of startups choose to utilise a 4 year vesting schedule with a 1 year cliff period, so we've set this up for you to take some of the guess work out of it. You also have the ability to customise this should you wish to including adjusting the time-based vesting or adding milestone-based vesting (e.g. bonus milestones for hitting KPIs).

  4. Final offer details - add the vesting start date, this is important as it will kick off any time-based vesting once the offer is finalised. We see a lot of companies tie this to the employees date of employment, particularly if they are using the standard 4 year vesting with a 1 year cliff - that way the cliff falls on their one year anniversary with the company! Once again, it is entirely up to you how you'd like the options to vest and you can customise this for each employee. In this step, you will also be prompted to add in the exercise price. This is a very important step and setting the exercise price will often depend which jurisdiction you are in. In most countries, you will be required to obtain a tax compliant valuation to set the exercise price - i.e. the price the employee must pay to convert their options to shares. Just ask us for an intro to our valuation partners should you need a hand here!

Now your offers are in draft, they're just about ready to go! You can preview the offer documents before anything gets sent to the employee or even preview the entire offer on yourself. Click on the relevant option holder and you will see the document preview links on the right and also a 'Preview Offer' link if you would prefer to 'try it on yourself' before sending to the employee.

That's it! Once you're happy with the offers, click on Invite and send out the offer to your employees. The rest is up to the employee and then the platform takes over from there and it's all automated. If your employees need any guidance, we have a detailed how-to article on Accepting an ESOP Offer, or they can reach out to our CS team on the chat 😊

Step 4: Invite your Stakeholders

Cake is better when shared with friends so let's get your shareholders, employees, directors, lawyer and accountant involved in the party!

Check out this 3 minute video on inviting stakeholders to Cake or scroll for detailed instructions!

There are two methods of inviting your stakeholders to Cake - which one you choose, depends on how much (or how little) you want them to have access to.

The first method we recommend you use if you are looking to invite other team members to help manage your account - including your accountant or lawyer -

  1. Head to Settings & Billing --> User Access

  2. Click the Add User Access in the top right corner

  3. Enter the email of the person you want to give access, set their permission level and click Invite

The next method should be used when you are ready to send out invites to your shareholders and employees. Don't worry! Your shareholders and employees will only be able to see their own shareholding and the documentation you have specifically shared with them - they will not have access to other shareholder or employee information!

  1. Head to Stakeholders

  2. Select the individuals you wish to invite (or select all)

  3. Click Invite in the top right corner

There is SO much value in getting your shareholders and employees involved in your equity journey and we want to make sure that's possible!

Unfortunately, we too often see talented founders giving away equity to investors and employees because they know it’s the right thing to do, but they do it in a way that just doesn’t work. For instance, an employee will sign a piece of paper with their ESOP offer, just to leave it in their drawer at home and never think about it again - does this sound familiar? What a waste!

That's where Cake comes in. Cake allows your team to log in to their own investor / employee portal whenever they want to view their holdings and their own equity journey. We've made it so it's quick and simple for them to login and see the real value in their ownership - making them feel more involved and even more excited to be along for the ride!

Your employees will receive automated vesting updates, and you can keep them in the loop with any increase in the value of their options as your company scales 📈

Investors will feel the peace of mind that their investment is safe, and they won’t need to bother you for updates or their Share Certificate or a Holding Statement because they can download it all from the one place themselves!

By having your team and investors all connected to your account, you're bringing them along on the journey, and the benefits from this will flow - you will truly understand what we mean when we say Cake is better shared with friends!

Step 5: Need further advice? Chat with our amazing legal & accounting partners!

Whilst we have worked to provide you with best practice standard templates to assist with your ESOP and Capital Raise, we understand that sometimes you want that little bit of extra hands on help and as much as we'd like to, our team is unable to provide any legal, tax or general accounting advice.

That's why we have found the best start-up focused lawyers and accountants around to partner with who are here should you need further assistance that we aren't able to give! We work with a number of fixed-fee partners that offer simple, fast and effective assistance.

Just let us know by completing the partner referral form, which you can find by clicking the chat icon in the bottom right corner. This will notify our customer success team and we will connect you with the most suitable partner within 24 hours!

Step 6: Check out our educational resources 🤓

We have a stack of really awesome resources on all things equity that you can check out on our Blog too!

From employee options to capital raising and everything in between, you'll find it on the Blog so be sure to head over if you're keen to keep on reading.

We'll that's it for now! Thank you for making it this far - there's so much you can do with Cake that we could be writing forever but we hope that it has given you a solid foundation to start your equity journey on Cake.

If you need any support or guidance when using the platform, reach out to our team at any time - we are always more than happy to help, in fact, we encourage you to ask questions and challenge us!

Look for the chat icon in the bottom right corner or email us at hello@cakeequity.com

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