Being addicted to Cake is nothing to be ashamed of.
Sweet, sweet equity. So tasty. Yet without Cake, it can be so terribly confusing.
If you think we’re trying to get you high on sugar, you might not have heard of Cake Equity. We’re an equity management software platform that makes it easy to motivate and reward your team for their hard work and onboard investors with ease. Everything from creating and issuing Employee Share Option Plans (ESOPs) to running your company’s capital raise, Cake makes equity easy.
It’s no surprise we have accumulated a growing stable of what we like to call “Superusers.” Our very own Cake addicts, of which Jamie Davison is one.
Davison is the Co-Founder of Carbon Group, offering expertise in financial services across accounting, advisory, bookkeeping, R&D and grants, payroll, cloud integration, business insurance, finance and financial planning.
Davison works as CFO for multiple companies including Bunsters, Yappy Group, 1question and Medicann and uses Cake’s products for everything from capital raising, onboarding new investors and ESOP set up and administration.
We all know running a startup can mean working with laughably thin budgets at times. Finding “creative” solutions when it comes to accounting can seem a little like trying to juggle swords - a dangerous proposition.
In Davison’s view, Cake solves this problem by offering seamless solutions to a raft of previously complex financial functions, that once required paying multiple third party stakeholders. Now he just needs Cake.
According to Davison, “whether bringing on 1,000+ new shareholders after a successful Crowd Sourced Funding Raise, or continuing to raise capital through structuring select supplier payments via SAFE Notes and sweat equity or using an ESOP to reward and retain top talent - we use Cake on a daily basis.”
A significant function of Jamie’s role as CFO with every company for which he works, is executing capital raising. This means, ensuring investors are issued with the correct stock certificates and that every technical and financial detail of an investor’s capital injection is recorded for the company and for the investor. It also requires ensuring any updates to the cap table also flow on to update investors about how their equity position may have changed.
Done manually, this can mean a lot of painstaking admin. A.k.a the bane of a CFO or finance specialist’s existence.
Cake automates all of these functions, which not only saves time but reduces the possibility for human error when crunching numbers that are populating like mushrooms.
Davison says, “If I didn’t use Cake across the portfolio of companies I work with, we would have spent upwards of $100,000 on lawyers in terms of subscription and raise agreements, ESOP documentation and updating ASIC. Not to mention the time and momentum lost via back and forth dealing between lawyers and tax accountants who don’t always play nice.”
“Additionally shareholders love it as they can login and see their shareholding at any time and all the investor updates and other communication is through one platform,” he adds.
That’s a heck of a lot of time and money saved!
Onboarding New Investors
When onboarding a major investor during a capital raising round, you’ve likely spent months in negotiation and have accountants and lawyers on hand to execute the deal.
But what about onboarding investors outside of institutional capital raising rounds?
By this, we mean new shareholders that come out of the woodwork at a moment's notice, usually when it’s less expected- and you need to quickly scramble to get the paperwork in order.
Cake makes this process easy with one-click tools that allow investors to be onboarded seamlessly.
Working with Medicann Health, Davison says “at the end of the financial year we had several new shareholders who wanted to come onto the cap table whilst we were still an ESIC registered company. With a few clicks we were able to add them all, have them sign and return subscription agreements and meet the deadline before lunchtime.”
It’s not the efficiency alone that excites Davison but also the fact that no other platform offers the same functionality. He says “it would simply not be possible with any other software (or combination of software) out there.”
Davison acts as CFO for Bunsters Worldwide, one of the many companies he has used Cake’s platform to implement and distribute an Employee Share Option Plan (ESOP) to employees.
“Cake has made our ESOP a breeze and allowed us to reward and retain our top talent,” says Davison.
What has traditionally been a complex process, requiring significant input from lawyers and accountants, Cake has transformed into a process that can be executed within its platform, in a few easy steps. Companies can create and send offers and employees’ equity is then reflected by the cap table that lives in Cake. Employees receive updates regarding the vesting status of their options, to make sure they know exactly how their hard work is paying off.
The best part? It’s all automated, so the company doesn’t need to constantly remind their employees about the value of their options. Cake does it for them.
Davison sees this functionality as one of Cake’s highlights because, he says, “it allows our team to see what options have vested and when the next milestones will occur, whilst also allowing them to calculate the equity they have built whilst sharing in our success.”
Cake doesn’t just create visibility for employees but for anyone who needs to see a top-line or granular view of the company’s equity position, at any given point in time.
With Cake, investors can get a bird's eye view, or dive deep into the company's equity position, giving them confidence to invest. Equally, founders can quickly grab a snapshot of the company’s equity position using Cake’s cap table tool, to make intelligent decisions when negotiating with investors or giving equity to employees.
Working with Bunsters, Davison says “with over 1,500 shareholders across the globe, we have been able to manage the cap table transparently and effortlessly, whilst also offering a platform for monthly updates. It has streamlined our communication and created a community we wouldn’t have been able to do otherwise.”
Jamie’s Top Takeaways
As a CFO who works across multiple organisations, we asked Jamie how he would feel Cake was taken off the table.
“Xero, Cake and Excel are the three tools I use on a daily basis. If Cake was no longer available it would be like going back to a world of stone tablets before computers were invented. It would be impossible to work at the speed my portfolio companies expect and things would go back from minutes to execute, to months” says Davison.
To put it simply, Cake will make your life easier, employees happier and your business better.
This blog is designed and intended to provide general information in summary form on general topics. The material may not apply to all jurisdictions. The contents do not constitute legal, financial or tax advice. The contents is not intended to be a substitute for such advice and should not be relied upon as such. If you would like to chat with a lawyer, please get in touch and we can introduce you to one of our very friendly legal partners.