Or let us say that you want to issue additional shares to a founder.
In both the above situations, this method would help you learn how to add a founder after the company has been created and how to issue additional shares to both a new founder or an old one.
Process of how to add another founder after you have created your company
Step 1: From the main dashboard, click on “Shareholder” from the column on the left-hand side of the page. You would then be directed to the following page where you get the option to “Add a Shareholder”. Click on it to add a founder to the company.
Step 2: By clicking on “Add Shareholder”, a form appears at the top of the list of shareholders as shown below:
In this, you would have to fill in the details like the first name, last name, and the person’s designation. As soon as you have filled in the details, click on “Save”.
Step 3: Step 3 would include the process of increasing the share number in the Founder’s Equity Class. This is can be done by clicking on “Securities” and then “Equity share class” as shared below:
Once you get to the page, click on the row that says “Founders (common equity)”.
Step 4: By clicking on “Founders”, you would be directed to the next page as shown below from where you would need to click on “Action with Security”. A drop down menu would come up from which you need to select the option “Edit Security Issuance” as shown below.
Step 5: As soon as you have clicked on this, a pop-up dialogue box will appear where you can edit the number of shares in the Founder’s Equity Class.
In this case, we have increased it from “1,500,000” to “3,000,000” since the second founder would have a 50% ownership of the business.
Step 6: After you are done with this, click on “Save”. You would be directed back to the main Founder Equity Class page as shown below.
Over here, click on “Issue Shares”.
Step 7: After you have selected the option to “issue shares”, you would be directed to the following page.
Here, you need to choose the type of equity you are about to issue. Since you are issuing the shares to the founders, you would need to select the option “Founders” from the drop down menu that would show when you click to fill in the Equity name. Once you have done this, click on “Add a Shareholder” to issue the shares to the founder whose profile you just created in the previous steps.
Step 8: By clicking on “Add a Shareholder”, a drop down page would show up as below.
Fill out the details such as the shareholder’s name, the date of issuance, the number of shares issued, the price per share, the share name and select the option and if there is a vesting schedule or not. Once you have done this, click on “Submit”.
Step 9: After this, you would reach back to the page for Founder’s Equity Class, and the shares would have been issued to the founder. On the following page, you would find the details of the total number of shares in the class and who have been issued the shares from this class along with the number of shares that they own, as shown below:
Note: Now let us say that the founder of the company wants to add capital in the company in exchange for equity just like any normal investor. In this case, the founder would need to have shares issued to them from another equity class like the Class A or Class B, depending on the round of funding that the company is undergoing.
With this, let us say that the company is still in its initial funding rounds and the founder is funding the company. In this case, the founder would be issued shares from the Class A. Taking this, let us see the steps to issue additional shares to a founder.
Step 10: Click on “Dashboard” on the left-side panel and then on “issue” as shown below. After clicking on “Issue”, a drop down option would appear. Click on “From Shares” to begin the issuing process:
Step 11: Once you have done this, you would be directed to the following page.
Remember that founders are also shareholders. In fact, they are the first shareholders of any company.
Here, you need to select the Equity Name. We have selected “Class A” in this example. After this, click on “Add a Shareholder” to whom you want to issue the additional shares too.
Step 12: Once you click on “Add a Shareholder”, a drop down page will be displayed. Here, you will need to first select the “shareholder (founder)” to whom you want to issue the shares to from the drop down list in the field to add the name of the shareholder.
After adding the name, mention the date of issuance, the number of shares issued, the price per share at the moment of issuance, the share certificate number (share name), and the vesting schedule.
Step 13: Fill in the details and click on “Submit” to issue the shares to the shareholder. You would be directed to the following page where you can see all the details of the shares that have just been issued to the founder from the Class A.
Step 14: To view all the shares owned by “John Lee” (the founder) in the company, you would have to view the details of the cap table. For this, click on “Cap table” on the left-side panel of the dashboard and the “Detail” from the drop down menu to reach the following page:
From the above, you can see how much “John Lee” owns in the company along with the share class and the number of shares that he owns from each class.