How DoorDash onboarded their cap table to eShares in 10 days

Onboarding cap tables can be a difficult and time consuming process for a few reasons. First, there is a lot of data that needs to be transferred without getting lost or misinterpreted. It’s a little like carrying a Jenga tower from one table to another without losing any of the pieces. It’s also tricky if there are multiple versions of the same cap table floating around. If your ledgers are different from your law firm’s, there is some reconciliation that needs to be done. Because of this, onboardings take on average between 2 to 4 weeks. DoorDash, a series B company with a relatively complex cap table, was able to onboard in under 10 days from start to finish. Here are 5 things they did to make that possible:

1. Go to your law firm on day 1 To collect the existing cap table data, we provide you with our “onboarding spreadsheet.” This contains tabs for your stock ledgers and historical transactions. It also includes harder-to-find details that aren’t typically shown in the cap tables provided by law firms. These include details like stock legends, federal exemptions and Rule 144 start dates, which are required for compliance reasons. From the more than 1,500 companies that have joined eShares, we’ve found that having your law firm populate the spreadsheet from day 1 reduces the time and cost to onboard by 50%. The template is formatted to match the ledgers that law firms keep on hand, so it should only take roughly 15–20 minutes for your paralegal to cut and paste the data. This also removes the need to have them review the spreadsheet line-by-line after you’ve populated it.

With DoorDash, we sent the onboarding spreadsheet directly to their paralegal at Gunderson (San Francisco), Eric Rommel, and he was able to complete it in one day.

doordash captableseShares Sample “onboarding spreadsheet”

2. Schedule your kick-off call as soon as possible This is a simple one, but it’s an easy way to shave off what is sometimes a week of the onboarding process. The first step in every onboarding is to have a quick 15-minute kick-off call to get to know your Account Manager and review the next steps. The sooner you schedule your call, the sooner we can get started collecting the data. So please don’t wait! If you’re struggling to find a time that works on your Account Manager’s schedule, just let him or her know and we will do our best to accommodate.

DoorDash’s accountant, Kunal Bajaj, originally scheduled his kick-off call two days out from when he signed up. He then asked if there was anything sooner, and we were able to re-schedule for the next day.
pick an onboarding time and date

3. Getting the email addresses

The one item that we won’t request from your law firm is a list of email addresses for all stakeholders. At the end of onboarding, all existing securities will be sent out to the investors and employees for acceptance. We ask that you use personal email addresses in case an employee leaves the company. There is a column in the onboarding spreadsheet where you can populate these, or if you provide your Account Manager with an Excel sheet he or she can paste them in for you. This is often one of the biggest hold-ups at the end of onboarding, so the earlier you can get started collecting these the better.

With DoorDash, Kunal worked on gathering these while Eric was populating the spreadsheet, and we received them both in the same day.

4. When in doubt, pick up the phone :)

Depending on the size and complexity of your cap table, and whether your paralegal has worked with eShares before, the onboarding spreadsheet can take some getting used to. Option exercises and terminations, various types of equity awards, and vesting schedules are the most common errors we see in the spreadsheet. If you have any questions, please do not hesitate to pick up the phone and call your Account Manager. We are always happy to jump on a quick call to walk your legal counsel through the template.

Kunal called daily to check in on the status of their onboarding. When he had questions on next steps or what was required to move forward, we were able to answer them on a quick 5-minute call.

5. Incomplete or missing data

This is probably the biggest source of back-and-forth during onboarding. We often receive spreadsheets that are partially completed and missing required fields. When this happens, your Account Manager will review the spreadsheet, highlight the missing fields, and send it back to your legal counsel with a list of what’s needed to move forward. In the top row of the spreadsheet, columns that are required are labeled and highlighted in dark blue. These truly are required in order to proceed, so please let your Account Manager know if you or your law firm are having trouble finding them. He or she will be able to point you to the appropriate documents where you can find them.

Going Live! The last step to having a perfect cap table.

Once we’ve gathered all of the data, we’ll import the spreadsheet into “Setup Mode” and invite you to review before Going Live. If your law firm has not been invlolved from the start, this is when they will begin their final review to confirm that the data is correct. The reconciliation process can sometimes take weeks if the law firm did not source the data initially. With DoorDash, the team at Gunderson was able to log in, confirm the data, and give us the thumbs-up to Go Live on the same day that we imported.

Go live modal in eshares“Go Live” Modal in eShares

The biggest incentive to get through onboarding quickly is to lock the data in place. As soon as you Go Live on eShares, your cap table will automatically be updated every time you issue a new security, so it is always 100% correct. If the process gets stretched on for too long, it can get complicated to reconcile with new issuances, option exercises, and terminations that took place during onboarding. Going back to the Jenga metaphor — the farther apart the tables, the harder it is to keep all the pieces together.

Cap tables are a messy business by nature. Almost 100% of cap tables are broken unless they are on eShares, and they typically don’t get reconciled until the mad rush leading up to a round of financing. The key take-away is that there really are no shortcuts when onboarding cap tables. Corners cut now will only lead to longer reconciliations and more legal fees down the road, so the best thing you can do is involve your law firm from the start.

As Fred Wilson put it in his blog post on Employee Equity, “I will end this post by imploring all of you entrepreneurs to hire an experienced startup lawyer. Employee equity issues are tricky. You can and will make a bunch of expensive mistakes with employee equity unless you have the right counsel. There are plenty of law firms and lawyers who specialize in startups and you should have one of them at your side when you are setting up your company and throughout its life. That is true for a lot of reasons, but employee equity is one of the most important ones.”

James Seely

James Seely

James grew up in Seattle before moving to the Bay Area to study at Santa Clara University. He has been a product marketer at eShares for almost three years.