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?
Looking for a 123R Stock Option Compliance Tool or Service
Answers
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
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.
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.
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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.
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
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
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Mike, great to see you on board.
At my last
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.
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.
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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
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.
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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.
I have used Equity Edge (ETrade), eProsper (SVB Analytics), and EASI software for Stock Options Admin and Fas123R computations and all stock options
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.
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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.
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
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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
I have used OptionEase which is a SaaS based product. I was on of their first "installations" and so I went through their
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
• 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
• 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.
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.
You can also try http://optiontrax.com/. This is a "SAAS" platform.
I would like "revive" this discussion. Any new tools or resources to share around FAS 123R?
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
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.
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I also had very a good experience with both Optionease software and customer service.
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.
Greetings! I thought I would add to this chain with some recent industry updates. Both eProsper and OptionEase have been acquired by Solium.
Any current suggestions on the best option for 123R stock otpion complaince tools? We are currently privately held.
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take a look at http://www.truequity.com
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
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?
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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
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.
To update here - OptionTrax is from Plan Management Corporation, and EASi has now been renamed Certent.
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