Uploading Additional Closing Documents for an Equity Financing

Introduction

This article will walk you through the process of uploading additional closing documents from an Equity Financing. The workflow will capture the data for those investments, update your Capitalization Table, store the documents in your Data Room, and allow you to create stock certificates for the new investors.

Currently, this workflow only allows for uploading of existing documents. While there is a generative option for the initial closing of an equity financing (which you can read more about in this article), additional closings must be administered off the platform. 

Additional Financing Closing Workflow

Getting Started

1. Go to Start New Workflow > Financing > Additional Financing Closing
2. Select which Stock Purchase Agreement governs the additional closing that you want to capture.
   NOTE: generally speaking, Stock Purchase Agreements have a window for additional closing spelled out (usually 90 or 120 days), so if you don't see the appropriate Stock Purchase Agreement listed, it may be that too much time has passed beyond that window. If that is the case, please reach out to our Support and we will be happy to assist. 
   
3. Click Add Investor and enter in the details of the investment, including the stock class, investment amount, number of shares, and the closing date. If the investor is new to your company, you'll be asked to provide their contact information, including fund details if the investor is an entity. 
   
4. Click Upload Management Rights Letters to attach any Management Rights Letters that were entered into between the company and new investors. If this is not applicable, click Continue to proceed through this step. 
   
5. Upload a Joinder Agreement for each investor by clicking Provide Document. Joinder Agreements are usually short documents through which new investors agree to be bound by the terms of the financing documents that were executed in the first closing of your Equity Financing. If these were not used in your closing, you can click Continue to proceed to the next step. 
   
6. Confirm which documents the new investors should have access to. Generally, they receive access to the financing documents, as they reviewed them prior to the closing and may have agreed to be bound by them through a Joinder Agreement, but this access can be tailored as needed. 
   

Creating Stock Certificates

The workflow will allow you to upload or create a stock certificate for each of the new investors. It will utilize the next available certificate number for that class and add the legends that were entered during the initial closing process (regardless of whether the financing was completed done on the platform).

If you choose to create the stock certificate(s) now, they will be sent to the company officers for signing. If you choose to defer the creation of stock certificate(s), you can run the Create New Stock Certificates workflow at a later time.

Once the stock certificates are created and the company officers have signed, the new investor(s) will get an email inviting them to log in and view their stock certificate. 

Next Steps

Once the stock certificate(s) are created and new investors are invited to the platform, the workflow is complete. Your cap table will be updated, and the additional closing documents are stored in your Data Room. You can repeat this workflow as needed to capture any additional closings that occur. 

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Screenshots are for illustrative purposes only.

Fidelity provides cap table management and other administrative services to private companies and their equity compensation plans.

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