How Secureframe Maximized the Value of Its Cap Table With a Roll Up Vehicle
“It felt like we were managing one check instead of 50.”
May 12, 2021 — 5 min read
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(Roll Up Vehicles have moved to Rollups.com, AngelList's new brand for startups)
Secureframe attributes a lot of its early success to its investors. When the data security and compliance startup raised its $4.5M seed round in October of 2020, co-founders Shrav Mehta and Natasja Nielsen offered allocations to operators—including angel investors, other founders, customers, and employees.
These individuals proved to be motivated members of Secureframe’s cap table—introducing Secureframe to new customers, sourcing qualified candidates, providing tactical advice, and helping propel Secureframe to an $18M Series A in less than two years.
When it came time to raise their Series A in January of 2021, Mehta and Nielsen knew they wanted to let more operators in on the round. But this presented a challenge.
The Problem: Raising Money From a Lot of Investors is Expensive and Time Consuming
Secureframe sought to add a few dozen operators to their cap table. To do this, they would need to solicit a few dozen signatures, collect a few dozen checks, and review the accreditation status of a few dozen investors.
Managing these obligations would slow down the financing process, while driving up Secureframe’s legal fees. Having too many names on their cap table could also present logistical challenges and bottlenecks as the business scales.
“There’s so much complexity involved in raising from a lot of investors that it’s almost not even worth it,” said Mehta. “We needed something that would reduce all this friction while still allowing us to include all of these smart and resourceful people we had built relationships with.”
