The Automated Financing
As an enhanced equity management platform that goes beyond equity to make the day-to-day work of a startup easier, Shoobx has more than 50 workflows. The most expansive is its automated equity financing, which starts with an interactive dilution calculator based on the terms of the deal and uses that model to generate all the financing documentation—and even automate the entire closing process.
Within a couple days of signing the term sheet, Clear Ballot sent initial drafts of its Series A-1 documents to Bessemer’s counsel. It was able to do so because once the term sheet details were entered into the Shoobx workflow, the platform dynamically generated the first drafts of the financing documents based on those terms—the Charter, Stock Purchase Agreement, Right of First Refusal and Co-Sale Agreement, Voting Agreement, and Investors Rights Agreement. Those documents were then shared with Clear Ballot’s legal team at Morse. About those initial drafts, Michael Jabbawy said, “When the financing documents were generated, our team was impressed with how much of the crossing the T’s and dotting the I’s had been automated by the platform. Shoobx helped free us up to concentrate on the more substantive issues in the financing, something the client benefited from through the process and in the final legal bill.”
There were not many revisions required because Clear Ballot’s Counsel at Morse, and Anthony Pergola of Lowenstein, representing Bessemer and the investors, had agreed to leverage the standard NVCA documents generated by Shoobx. With 500+ pages of documentation generated for review, Shoobx saved Clear Ballot time and money, and reduced its risk.
Felda Hardymon, Harvard Professor and Bessemer Ventures Partner; and author of Venture Capital, Private Equity, and the Financing of Entrepreneurship, said: “It’s great to see innovation actually helping the innovation economy. Shoobx has automated out the drudgery part of the entire financing process from drafting, to editing, to escrowed signatures, to updating the cap table and data room. It’s been a pleasure to do deals this way—fast, efficient, more consistent and allows us to focus on building the business. F*cking awesome.”
In parallel, the Clear Ballot team was able to focus on completing the required disclosure schedules and ensuring that the investors and their counsel had access to everything they needed in the Shoobx data room. Clear Ballot’s CFO, Avin Bansal, said, “The financing went smoothly. Having all of the documents already automatically in the dataroom is fantastic. In previous financings with other companies there has been a ton of paper management, so it was a huge improvement over a typical process.” CEO Bob Hoyt commented, “the Shoobx automated financing made it possible for us to get back to a busy time, responding to our current and future customers, and preparing for the Presidential election”.
Final documents were sent to the Board and investors within a couple weeks of the signing of the term sheet. As all parties e-signed the documents in Shoobx, their signatures were digitally held in escrow within the Shoobx platform until released at closing by counsel. All the documents associated with the round were saved in the data room, categorized appropriately and tagged with the names of the relevant parties both there and on Shoobx’s dynamic cap table, ready for the next phase of growth and any associated follow-on funding.