Posts in Educational
Advantages of Electronic Shares of Stock

Instead of using paper-based stock certificates that are laborious, time-intensive and expensive to administer, companies can issue electronic shares. To understand how electronic shares work, consider what happens when you directly purchase shares of stock in a public company today (if you purchase them through a brokerage, the brokerage is registered with the company as the owner of the shares, not you).

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Disadvantages Of Paper Stock Certificates

If you bought shares of stock in a public company in the early 1900s, you received your shares in the form of paper stock certificates. While they might be pretty to look at, paper stock certificates are pretty in many other ways, too. For companies, they are pretty expensive to maintain, pretty laborious to manage, pretty onerous to track, pretty burdensome to replace and pretty tough to audit. For shareholders, they are pretty hard to track, pretty challenging to value and pretty difficult to use.

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Why A Startup Doesn't Need To Hire A Transfer Agent

Many startups begin tracking their cap table using a spreadsheet. However, once a startup begins using stock grants or stock options that vest over time to attract, retain and reward employees, it quickly becomes apparent that a cap table with these complexities can't be maintained in a spreadsheet. A startup that has outgrown a spreadsheet to manage their cap table has two options. Insource by using software specifically designed to maintain cap tables. Or outsource by hiring a transfer agent.

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Incentive Stock Options Can Give Tax Advantages

When a company awards incentive stock options or ISOs, it forfeits its tax deduction to provide the most tax advantageous stock option to an employee. Companies typically reserve ISOs for senior executives, who have the potential to be taxed entirely at the long-term capital gains rate for stock option income. To qualify for preferential tax treatment, an executive must fulfill holding and employment requirements. Executives who exercise ISOs and hold the stock can incur significant alternative minimum tax liabilities.

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Incentive Stock Options (ISO) vs. Nonqualified Stock Options (NSO)

What are the differences between Incentive Stock Options (ISO) vs. Nonqualified Stock Options (NSO)?

When a company grants stock options, it might grant non-qualified stock options (NSOs) or incentive stock options (ISOs). While both are stock options that provide the right to purchase stock at a redetermined price at a future date in time, they have different restrictions and might have different tax consequences for both the company and the grant recipient.

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Better For Founders, Investors, Employees, and Customers - Part 6

Founders are the heart and soul of the equity markets as without founders there are no companies. Our mission for Equity Token is to increase the level of support founders receive around the world by increasing their access to the best backers. Currently, startup founders have three main financial instruments to fundraise through:

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Programmable Equity Ownership - Part 5

The short-term success of ICO fundraising to date and the long-term success of Venture Capital’s ability to drive innovation are two industries ripe for combination due to how well they complement each other. Coindesk’s “State of the Blockchain” Q4 2017 survey they found that the majority of people believe that ICO & VC investment are complements to each other.

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The Rise of Blockchain - Part 4

Last year token sales grew nearly 100x from Q1 to Q4 with the total raised by ICOs hitting $3.23bn in Q4. During this same time, digital assets outperformed traditional assets by nearly 13x. Some of this growth is being driven by highly reputable financial institutions, such as Andreessen Horowitz and George Soros, allocating investment to this emerging asset class.

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