AngelList Venture is launching Stack Equity Management, a way for startups to organize and manage their cap tables natively within the platform. Stack Equity is a suite of products that companies use to set up, update and purchase founder, employee and investor equity. It is available, starting today, to U.S.-based C Corporations.
It may sound like a niche product launch, but here’s the real news: The company is going head to head with its largest competitor, Carta, when it comes to pricing the management of cap tables. Stack Equity Management charges companies based on team members, while Carta charges companies based on stakeholders, aka investors, on the cap table.
Why? AngelList claims that stakeholder-based equity management software means that people on your cap table can cost you hundreds of dollars per year, despite their position in your company not changing.
“The messier the cap table gets, the more it costs in terms of software fees and costs in terms of lawyers,” CEO Avlok Kohli said in an interview yesterday.
AngelList’s view on the pricing change is meant to incentivize founders to take as many checks as they need from investors -- which may become especially necessary during a downturn -- without facing more expenses.
“What happens in this environment is that investors still keep investing; they'll just reduce their check size so founders need to talk to more investors,” Kohli said. “It ends up being more of a pain… Capital is oxygen, and for us, team-based pricing means that startups could easily raise early on and not worry about it.”
The company, which last raised at a $4 billion valuation, has spent the past few years bundling founder services, making today’s product announcement another example of how it views the future of starting (and scaling) a company.
Last year, AngelList teased out its intent for today’s product launch. The new software was created to cover four bases: end-to-end incorporation, business banking, advisor equity grants and cap table management. Months earlier, it launched roll-up vehicles (RUVs), which allow founders to raise capital from up to 250 accredited investors with a single line on the cap table.
As RUVs have grown, Kohli explained, founders asked AngelList Venture for a better way to look at RUVs within their cap tables; of course, that’s difficult if AngelList doesn’t host cap tables to begin with. It’s what led to the conversation that eventually inspired Stack Equity Management.
When asked about how this product helps AngelList Venture compete with Carta -- which acquired its own AngelList-type startup last month -- Kohli said that he doesn’t have anything new to add.
“Ultimately, there's going to be a small number of folks who actually have the ability to build a calculated product,” he said. “When I say ability, I don't mean technical abilities, but the institutional knowledge to build something.”