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Looking for a 123R Stock Option Compliance Tool or Service

Shel Perham's Profile

Eprosper vs Equity Edge vs Solium vs TrueEquity Stock Compliance Tools

Has anyone used "eProsper" by SVB Analytics Inc to manage their equity and 123R stock option compliance? Any alternative recommendations for a tool or service? Any thoughts on cost?

 

Answers

Topic Expert
John Kogan
Title: CEO/CFO
Company: Proformative, Inc.
(CEO/CFO, Proformative, Inc.) |

Shel:

I used eProsper a couple of years back. It was in conjunction with our law firm who did most of the data entry and then we would check their work, run reports, etc. I understand that this is a popular mode of operation with eProsper. The system was fine as a record-keeper and had some basic reports. At the time, and remember this is a couple of years ago now, we had to dump info into Excel for more advanced reporting. They may have more reports included now.

Also, I remember wanting to run some valuation exercises but our firm did not have the proper modules so we once again dumped to Excel and did our analysis. Net, net I thought it was fine for record-keeping and basic reporting but had to go the Excel route for more complex work.

Oh, let's not forget price! It was a free service through my law firm. But I did shop for compliance tools at the time and as I recall eProsper was the less expensive alternative to Equity Edge (now owned by E*Trade) which is the long-standing leader in the field.

Liz Armstrong
Title: Controller, consulting
Company: Consulting
(Controller, consulting, Consulting) |

I haven't used eProsper but have experience in using Equity Edge and Express Options (Computershare product). I would recommend Equity Edge. From a financial reporting disclosure perspective, EE essentially covers all the requirements. Unfortunately, their pricing is probably the highest. However, if you have a plain and simple stock option plan, then you can go with a less robust system (e.g express options). But if you have restricted stock awards, restricted stock units, non-employee stock options and other stock grants, then go with a system that can handle it all and do the valuations and provide the reporting.

Shel Perham
Title: CFO Consultant
Company: CFO Services, Robert Half
(CFO Consultant, CFO Services, Robert Half) |

Thanks to you both. We contacted Equity Edge and surprised to find out they will not sell their product to us as we do not have a S-1 event on the horizon. We will look at both eProsper and express options. Thanks again for the input.

Naresh Bansal
Title: Vice President Finance
Company: Zscaler, Inc.
(Vice President Finance, Zscaler, Inc.) |

Hi Shell,

I have used the eProsper (EP) fairly recently and have also used Equity Edge (EE) in the past.

I was fairly impressed with the ease of use and the reporting capabilities of EP. Unless you are a public co, I would prefer EP, it's hosted and was able to handle the typical start up with multiple rounds of funding and options to over 500 employees.

We were easily able to get the APB25 & 123R reports, cap tables etc..

Naresh

Michael Tamaru
Title: Board Advisor and Investor
Company: Consultant
(Board Advisor and Investor, Consultant) |

I used equity edge and prefer that. If you're looking for a service provider, who can turnkey the whole process, try SOA Projects in Mountain View. They will maintain the option data and cap table, prepare the expense entries and support the annual audit including drafting footnotes and equity roll forward for a fixed annual fee. I'm at a smaller start up so we can't justify doing all this in house and our attorneys are pricey to be doing all of the work

Topic Expert
John Kogan
Title: CEO/CFO
Company: Proformative, Inc.
(CEO/CFO, Proformative, Inc.) |

Mike, great to see you on board.

At my last CFO gig, small private company, our outside counsel maintained our cap table for free. Kind of like they attended our board meetings for no charge. I think in today's economy you should ask for and get this sort of thing as part of their core offering to you. Heck, it's only an admin's time for an hour a month or so.

The one drawback, however, is that I was used to managing my own cap table and I did miss having that level of visibility and control, which you lose a bit of once you have someone else updating things on their own system.

Topic Expert
Tom Pai
Title: CFO consultant
Company: Sunstone Group
(CFO consultant, Sunstone Group) |

SVB does a good job, but they are a bit pricy. If you're a early-stage company (pre-IPO) you can go with cheaper firms. But be careful, unfortunately there's a lot of low-cost providers out there who's work is lacking and may cause you problems down the road. PM me if you'd like more info about what our firm, Ravix Group, can offer.

Louis Almerini
Title: CFO
Company:
(CFO, ) |

Shel,
Merrill Lynch (now owned by Bank of America) owns a small company, Equity Methods, whose sole business is providing state of the art 123R compliance software. If you or your colleagues have a relationship with a Merrill Financial Advisor, contact him or her and they can connect you. If not, I'd be happy to introduce you directly. I used to worked for Merrill as CFO of its retirement services business, and I was a member of the board of directors of Equity Methods.
Best,
Lou Almerini

Richard Connelly
Title: CFO
Company:
(CFO, ) |

I recently explored http://www.solium.com/ for the 123R software. They have an online app that rocks. I will be signing them up when we get our option plan going in the next 6 months.

Paul Johnston
Title: CFO
Company: OneSoft Solutions Inc.
(CFO, OneSoft Solutions Inc. ) |

We signed up for StockVantage and very happy we did so. They were very good on conversion from Excel to their system and we have found it easy to use and accurate so far. We converted using Canadian GAAP, then changed the program over to IFRS compliance - an easy one step process.

Keith Taylor
Title: CFO
Company: Lyris, Inc.
(CFO, Lyris, Inc.) |

I have used Equity Edge (ETrade), eProsper (SVB Analytics), and EASI software for Stock Options Admin and Fas123R computations and all stock options accounting. All have their pros/cons, and pricing issues...

Instead I would very much recommend using Global Shares Stock Administrators - I have used them twice, in companies from 10 to 400 Option Awardees as an outsourced Stock Option Administrator (SAS70 compliant) and provide much peace of mind.

Achaessa James
Title: Product Manager
Company: National Center for Employee Ownership
(Product Manager, National Center for Employee Ownership) |

Just to clarify, EASi is a SaaS solution that hosts a company's equity database - they do not provide administration services. Global Shares is an outsourcing service for plan administration. Global Shares evaluates a company's needs and then decides what SaaS platform to recommend. It's my understanding that EASi is one of the SaaS platforms that Global Shares uses.

Jerry Sweas
Title: President
Company:
(President, ) |

A word of advice for all Controllers/CFOs of VC-backed startups: do not be penny wise and dollar foolish. If there is any possibility that your company someday will be in a position to file an S-1 to go public, your investment bankers will most likely require a Big 4 audit opinion as part of the filing. The last thing you would want to happen would be for a material control weakness (as defined by SOX) have to be disclosed related to compliance with FAS 123R. Or, similarly, for the Audit Partner to report to the Audit Committee of your pre-IPO company that the chief accounting officer of the company is technically not up to speed (because you were trying to "save on fees"). DO NOT FALL INTO THIS TRAP.

Besides the other fine advice on software vendors in this thread, I recommend considering outsourcing all FAS 123R work to a firm like Corefino, Inc. which itself utilizes EASi and can handle any level of complexity in tracking and reporting on stock plan administration. It never ceases to amaze me that almost no Controller/CFO would think twice about not outsourcing payroll to ADP, but then try to handle all the complexities of FAS 123R in-house where the risk of making an error can result in them losing their job because this is still such a hot button topic of corporate Boards/Audit Committees following the recent backdating scandals on Wall Street.

Topic Expert
Joan Varrone
Title: CFO
Company: Cloud Cruiser
LinkedIn Profile
(CFO, Cloud Cruiser) |

Our law firm uses E Prosper (SVB) to track our equity and they will run reports for us for free. E Prosper offered to just license us the 123R module which made it less costly.

Joan

Carla Quinn
Title: CFO
Company:
(CFO, ) |

I have used OptionEase which is a SaaS based product. I was on of their first "installations" and so I went through their learning curve. The CEO and her staff are dedicated to their customers and are tremendously helpful. I would highly recommend them.

Achaessa James
Title: Product Manager
Company: National Center for Employee Ownership
(Product Manager, National Center for Employee Ownership) |

Before making your platform/service decision, indeed, before beginning to vet providers, I suggest you make a checklist of your company’s specific requirements for equity administration and then measure each provider against your company’s needs. Important questions to include in your evaluation list are:
• Are you willing to troubleshoot for the vendor? This is especially important when deciding to go with a vendor based on a low/lower subscription fee. Newer platforms charge less, but you will spend more time with issue resolution because their programs have not already been de-bugged by a long history of users.
• Is the FAS123R expensing module as mature as the administration module? This, too, goes to the willingness-to-troubleshoot item and will apply to platforms such as eProsper and EquityEdge which are more mature administration platforms with relatively new FAS123R expensing modules.
• Are you a public or private company? Some vendors, like EquityEdge no longer accept private company subscriptions unless an IPO is on the horizon. Some vendors, though they say they can handle both non-public and public companies, are not really configured to address the unique needs of non-public companies, like robust cap table management functionality.
• Will you be going public in 18-24 months? Some platforms are suitable only for non-public companies and you will have to migrate to a new platform when you go public. Data migration expenses will have to be worked into the transition budget for your IPO or you will need to have a long-term vision when selecting a platform pre-IPO.
• Can you afford necessary in-house expertise? Stock plan administration is one of the highest regulated financial services and requires expertise in tax regulations, securities laws, accounting regulations, plan design and administration, and international administration issues and the administrator must be able to interface with your HR, legal, tax, finance and executive teams. There is only one professional certification that assures an administrator is knowledgeable in all of these fields – the CEP (Certified Equity Professional) designation awarded by the CEP Institute at the Santa Clara University Leavey School of Business. If you do not have a CEP on staff, you can be assured that your CFO will be less strategic and legal and financial expert fees will be proportionally higher as your administrator looks to you – and you to your experts – for advice in managing your equity compensation plan. Outsourcing plan administration to a provider with a CEP on staff can be an economic alternative that ensures you have the requisite level of expertise without the burden of FTE expenses.
• Is the outsourcer process-driven? If you elect to outsource your plan administration, be sure to inquire about their production processes. If a provider works on a consultant-based business model, with a single person servicing your account, it is unlikely that they have processes in place that meet QA and segregation of duty standards. The 404 Institute’s third annual Benchmark Study found that companies reporting lower SOX 404 compliance costs and more effective audit outcomes had four things in common:
o Higher degree of centralized transaction processing and control
o Higher percentage of automated vs. manual controls
o Higher percentage of preventive vs. detective controls
o A greater reliance on company-level controls
A process-driven outsource provider can be uniquely positioned to help a company execute on the first three points and should be able to assist in the design of company-level controls for interacting on equity administration activities.

Leslie Murdock
Title: Partner (lmurdock@murdockmartell.com)
Company: Murdock Martell
(Partner (lmurdock@murdockmartell.com), Murdock Martell) |

We (Murdock Martell) have worked on eProsper (CAPMX) quite a few times over the past year and it has all been good. The product has matured nicely and it has been able to tackle most everything we have thrown at it. The audit firms have seen it a lot and are now very comfortable with it's output. Also their tech support folks are very knowledgeable.
We have evaluated the other principal offering out there and they are all fairly capable, however, the market has become crowded and one wonders how they can all survive. As eProsper is backed by SVB it looks like a front runner in the survival stakes.

Sundararajan Sampath
Title: CFO
Company: CSS Corp
(CFO, CSS Corp) |

You can also try http://optiontrax.com/. This is a "SAAS" platform.

Scott Gunn
Title: CFO
Company: In-Transition
(CFO, In-Transition) |

I would like "revive" this discussion. Any new tools or resources to share around FAS 123R?

Joan Nevins
Title: CFO
Company: Kalido Inc
(CFO, Kalido Inc) |

We moved away from Equity Edge and have been using 2Step,by Corporate Focus. We find it to have terrific reporting capabilities and have been through two audits with it so far. Captable capabilities are fine too

Scott Gibson
Title:
Company:
(, ) |

I've also used Optionease the last couple years and have been impressed with the software as well as the customer service. I'd recommend it.

Patty Falo
Title: Consultant
Company: Bridgepoint Consulting
(Consultant, Bridgepoint Consulting) |

I also had very a good experience with both Optionease software and customer service.

Scott Gibson
Title:
Company:
(, ) |

I've also used Optionease for the last couple years and have found it to be good product with good support. I'd recommend it.

Topic Expert
Kim Kovacs
Title: Executive Vice President
Company: Solium
(Executive Vice President, Solium) |

Greetings! I thought I would add to this chain with some recent industry updates. Both eProsper and OptionEase have been acquired by Solium.

Stephanie Hamilton
Title: Controller
Company: Leads360, Inc.
(Controller, Leads360, Inc.) |

Any current suggestions on the best option for 123R stock otpion complaince tools? We are currently privately held.

Hagi Schwartz
Title: Founder
Company: Magnolia Capital
(Founder, Magnolia Capital) |

take a look at http://www.truequity.com

(Agent, JKS Solutions, Inc.) |

I agree with Jerry Sweas's post above.

As someone who has had the displeasure of performing reconciliation and financial reporting for a private company with 100M in sales, whose president refused to get a good tool to manage a gigantic cap table with several equity transactions per year over the course of 10 years, I highly recommend investing in a tool to assist.

The cost of the tool will be overcome by the lower cost of maintenance over time and the reduced worry about errors, the increased reliability and transparency and internal control. Spreadsheets at this magnitude cannot be relied upon when there are multiple people in the process.

Here is the link to Solium's private company solution:

http://www.solium.com/us/html/solutions/private.html

Constance Jimenez
Title: Controller
Company: TouchCommerce
(Controller, TouchCommerce) |

Sorting through the various questions. So it appears that as of Sept 2013, outside of Solium, Option Trax is the other available product. How about EASI?

Patty Dumond
Title: Chief Accounting Officer
Company: Invitae Corporation
(Chief Accounting Officer, Invitae Corporation) |

I have used Equity Edge in the past but have been an Easi user for over 5 years and love the tool, you should take a look

Christopher Schuster
Title: CFO
Company: Protonex Technology Corporation
(CFO, Protonex Technology Corporation) |

I've also used EASi for the last 4+ years, in both a private and public company setting. What convinced me was that the system was able to handle unique grants, all 123R reporting, and provided all the pertinent details for external audits and disclosures. I agree ...take a look at EASi.

Elena Thomas
Title: COO/ CFO
Company: Plan Management Corp.
LinkedIn Profile
(COO/ CFO, Plan Management Corp.) |

To update here - OptionTrax is from Plan Management Corporation, and EASi has now been renamed Certent.

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