How Does It Work?
EquityX allows startups to easily engage with experts and service providers. Through the platform one can easily define and track tasks and pay through a flexible set of arrangements (hourly, by-task, maintainer) with future equity, which gets valued when the next round of financing occurs, and with all experts under one single line on the cap-table. Using the platform is through these simple steps:
SETTING A POOL
See if You qualify
Startups that have at least raised a Seed investment can register and set up a pool. The application process is straightforward, once you submit the relevant data about yourself and your startup, our team will put your request in motion in the shortest time possible.
Set the pool credit amount
Once your startup qualifies, you can determine a cash-equivalent budget, which can go up to 50% more of the cash you already raised. This provides a clear, USD based budget for working with outside experts who provide key insights and skills.
Get board approval
The amount you requested goes into our standard agreement, which then needs to be approved by your board, only once. The whole approval process is managed automatically within our platform with full transparency for the stakeholders.
USING A POOL
Define your Task
You control each assignment, including setting timeline expectations and budget constraints, and you can also clearly communicate about what you require for completion.
Assign the Tasks
Once you define the task, you can pick the right talent to do it. You can either choose one of your existing and known talents or you can either choose and import one of your existing, who’ll complete the task as needed.
Approve the Payment
Only after the task is approved by you, experts become vested for the negotiated dollar amount, which will later convert to equity with the next qualifying round.
Finalizing the Deal
- Startup CEO approves transactions marked as done by the expert
- Each micro-transaction is done via a click of a button
- For each micro-transaction, the expert receives rights to future optionss, which are digitally signed
- The rights are granted when the CEO approves the task
Qualified Funding Round
When the startup secures a qualified round with a VC, there is a process of conversion to equity.
- Funding round – EquityX’s platform calculates the amount of options each expert gets
- The options are for the exact class of stock received by the new VC. The experts invest their time instead of cash, and proceeds from that investment is similar to that of the VCs with the same terms and with a fair discount mechanism between 6% – 30% on the price-per-share (6% + 1% for each month, capped at two years)