LTSE shutters cap table management business (formerly captable.io)

https://equity.ltse.com/lp/important-updates

by mrobins • 2 years ago

60 28 2 years ago

equity.ltse.com

wmf• 2 years ago

LTSE Equity appears to be kind of a side project of the main LTSE Exchange which is not shutting down.

mortehu• 2 years ago

Note, however, that only a few hundred thousand shares trade on LTSE each day, for a market share of approximately 0.00%.

https://www.cboe.com/us/equities/market_share/

eej713• 2 years ago

Agreed. LTSE has a very tiny market share of the daily trading.

I honestly can't figure out how they are making enough money to stay in business. I have to assume that by getting a seat at the big boy RegNMS table, they are getting a share of the fees paid to the SIP. But even with that, seems like a tough way to get by.

swyx3• 2 years ago

but, like, holding things for the long term is the point of LTSE, taking market share by daily trading volume as a measure of succcess is exactly the sort of attitude the LTSE is trying to fight against lol

xwowsersx• 2 years ago

Long-ish

swyx3• 2 years ago

editorialized title. this reads like "the LTSE is shutting down" whereas its basically LTSE getting out of their cap table business confusingly called "LTSE Equity", presumably following the Carta drama of a few weeks ago. core LTSE business is fine.

it's also noteworthy that their chairman/founder Eric Reis is now also cofounder of Answer.ai, so perhaps his personal focus is shifting a bit? idk, probably reading too much into a chairman's activities vs company focus.

mrobins2• 2 years ago

Title edited for clarity

benplumley• 2 years ago

You've landed on an excellent garden path sentence, as shutters, cap, and table are all both nouns and verbs!

swyx3• 2 years ago

oh thats nice of you! tip of the hat

hdmoore• 2 years ago

The sell-off of captable.io/LTSE Equity was announced to customers a couple months ago, predating the Carta drama (but many folks picked LTSE specifically because it wasn't Carta).

mrobins2• 2 years ago

Was it? I’m a customer and I didn’t get any emails prior to this announcement.

shreezus• 2 years ago

I feel like they could have spun it off separately (especially given what's going on with Carta).

lopatin2• 2 years ago

So LTSE is like a private investors club for companies with "long term purpose"? But as the FAQ says the companies have to already be listed on the NYSE or Nasdaq. So if you can access LTSE trading, you'll be able to arbitrage the stocks, which sounds completely antithetical to the idea of LTSE but how do they stop it?

HighFreqAsuka• 2 years ago

By having nearly no volume to begin with. Many US stocks are listed across many of the ~13 US exchanges, so what you're describing is already the status quo. According to RegNMS regulations, traders cannot trade through protected quotes, and so trading firms already have to be aware of the prices on all US exchanges.

But LSTE has so little volume, that you frankly forget they exist most of the time.

lopatin2• 2 years ago

The exclusivity and (assumed) low volume is what made me think of arb opportunities in the first place :) I doubt I'll be getting an invitation to trade.

xtracto• 2 years ago

So, what happens if I have shares in there from a previous company? Would my account be automatically migrated to the new provider? Do I have to contact the company ? :(

JumpCrisscross2• 2 years ago

what happens if I have shares in there from a previous company?

You never had shares “there.” You have shares. They recorded that fact.

Contrast this with buying Apple stock through Fidelity. Legally, Fidelity owns the stock [1]. (Well, technically probably not [2].) You properly own your stock “through” Fidelity.

Private cap tables are different. The cap table is what the investors and company say it is. To avoid mistakes and have an independent record for disputes, many companies opt to use a third party for administration. But the shares they track aren’t “there.” The cap table manager can go under with zero implication for the value or propriety of your shares. (Not necessarily true for Fidelity.)

As a practical matter, keep an eye out for an update from your company. As long as they have a proper notice address for you, you shouldn’t be subject to anything explosive.

[1] https://en.m.wikipedia.org/wiki/Street_name_securities

[2] https://en.m.wikipedia.org/wiki/Cede_and_Company

kasey_junk• 2 years ago

Not all shares are owned street side by Cede. Almost certainly most founder shares are directly listed with a transfer agent (in the west probably at Computershare).

That is to say, none of what you said is wrong but it’s not peculiar to private shares. Public shares are directly analogous.

Fidelity isn’t a great example as it’s likely too big to fail, but even if they did go under it would mean systematic collapse of the western equities markets. That said philosophically Fidelity failing _doesnt_ impact your legal claims precisely because Cede & DTC exist.

Gaessaki• 2 years ago

Welp, there goes another SaaS platform in our corporate ops toolchain. Anyone have a recommendation for a tool to handle the cap table for an early-stage cooperative with several hundred members that won’t cost us an arm and a leg? Excel?

hn72774• 2 years ago

What is your budget? Curious what folks pay for this type of service and how the billing is structured.

It seems like there's a gap to be filled between the recent Carta issues and now this.

epeate2• 2 years ago

Usually structured based on a couple of variables; 1. features required and 2. seats required

epeate2• 2 years ago

Hi @Gaessaki - feel free to checkout cakeequity.com we are suited for early stage companies and provide the tools required without costing an arm and a leg. It's free to get started and check the platform out.

mifeng• 2 years ago

In which the guy who wrote The Lean Startup builds the most unlean startup possible.

arthurcolle• 2 years ago

I wonder if this is related to the Carta scandal that recently happened. Just suspicious timing amongst the "startup elite crowd"

sebastiennight• 2 years ago

They just sent an email sending customers notice that they're offloading the customer base to Astrella.

As a customer I need to figure out whether I want to opt in, by January 31st at the latest.

Luckily, there is an Astrella demo webinar every week ! (And the next one is... on January 31st in the evening).

I would call this a short deadline.

LTSE shutters cap table management business (formerly captable.io)

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