Processing Stock Splits

What is a stock split?

Stock splits are a change that increase (forward stock split) or decrease (reverse stock split) the amount of outstanding shares on the cap table. The price of the shares is adjusted as well, so the overall aggregate value that a shareholder holds remains the same.

For example, if John Doe holds 100 shares at $1 per share they have $100. If you process a forward stock split by a factor of 10, John Doe would hold 1,000 shares at $0.10 per share, or $100 total.

Recording Stock Splits in Shareworks Startup

The way to process a stock split in Shareworks Startup is to make two versions of your cap table. One version will contain the pre-split numbers while the primary cap table will contain the post-split numbers. This will maintain a clean look and accurate historical data.

The steps to creating a new version/copy of your cap table can be found in this article: How to Create a Version of your Cap Table

For example, John Doe originally has 100 shares pre-split and needs 1,000 shares post-split. You would make a copy of your cap table and rename it to reflect the pre-split version. You can then change the primary cap table (now the post-split version) to reflect that John Doe has 1,000 shares. Make any other post-split adjustments as needed as well in the primary cap table (price per share, strike price, etc).

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