How to exclude pools?

This article explains how to exclude a pool of shares from the cap table and, thus, from the company valuation.

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Written by Support Team
Updated over a week ago

Intro

If you don't want a specific share pool to dilute your cap table and alter the ownership percentage of actual shareholders, then you can exclude the share pools and the associated plans from your cap table.


How to exclude a pool of shares in Ledgy?

  1. Go to Equity Plans > Pools & Plans page.

  2. Search the pool you want to exclude and click the Edit button.

  3. Under Optional fields, expand the Dilution settings, and toggle on Exclude pool from cap table.

  4. By clicking the Save button, you confirm the pool exclusion.


What are the effects of pool exclusion?

  • Pools, attached plans, and issued grants do not appear on the cap table when you turn on this setting. The diluted value is always 0, so your other stakeholders' shares will not get diluted.

  • You cannot exercise grants from excluded pools. Otherwise, they will start to dilute your cap table.

  • Equity plans from excluded pools cannot have a stock grant type.

  • However, you can create cash settlements for grants if the shares come from excluded pools.

  • Your employee can see these grants on their employee dashboard and their value, but the valuation differs from the company valuation (please see next point).

  • The pools excluded from the cap table do not increase the company valuation because we use the number of diluted shares for the valuation calculation.

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