eShares has raised $17 million in a Series B funding round according to a report BizJournal. Spark Capital was lead in the funding that included participation from Union Square Ventures, Subtraction Capital and Industry Ventures. eShares raised $7 million in a Series A round this past January at a valuation of $24 million. The new funding was said to be used to power global expansion.
eShares is the “first and only” SEC registered transferred agent that helps companies manage equity from seed stage to pre-IPO. As a growing number of companies stay private longer and key employees are remunerated with equity, eShares is positioned to benefit from this phenomena. eShares charges a one-time fee of $100 to create a company and then allows startups to send shares to founders and advisors for free. The eShares site states over 1000 companies are using its services today.
more VCs we speak w. ask founders to switch cap table + employee option management to @eshares. founders = love it! https://t.co/USJSOzyIGv
— Dave Ambrose (@daveambrose) August 14, 2015
eShares may also be well positioned was new securities exemptions come into play. Regulation A+, just recently made actionable by SEC rules, is allowing small companies to raise capital directly from retail investors. Title III of the JOBS Act, retail crowdfunding, expects to have final rules later this year. Each of these exemptions creates challenges for SMEs in managing their cap tables. eShares cloud based application seeks to provide a solution to this challenge. The firm has issues more than 17 billion electronic shares since its founding in 2012.