A planning hub for deal managers whose portfolio company is heading to IPO — prepare the distribution to your investors.
One of your portfolio companies is heading toward an IPO. Once it's public and its shares are transferable, you can distribute those shares to your investors — Seed Labs can handle the distribution in-kind, as cash, or a combination of both.
When the company goes public, your deal holds public, transferable shares. To get them to your investors, you'll need a brokerage account in the deal entity's name, your position details on hand, and each investor's brokerage information on file. Seed Labs runs the calculations and forwards investor brokerage details to the brokerage firm; you open the account, authorize the transfers, and interface with the broker.
The next sections walk through each piece, in the order to tackle them.
Opening the brokerage account is the GP's responsibility, and it's the longest lead-time item — so start during the lock-up, not after it expires.
Seed Labs assists through its preferred partner, Alex Brown, seeding the conversation with the KYC data we already have on file. Alex Brown runs its own KYC, separate from Seed Labs, and handles most of the process from there. You may instead use your own broker with an account held in the deal entity's name, but Seed Labs won't assist with KYC in that case.
To bring the position into the brokerage account, have these ready for the shares being moved in. This information is held by the entity that will be sending you the shares:
Pulling DRS statements can take time, so request them early.
Seed Labs can capture brokerage information for each investor and forward it to the brokerage firm. The earlier your investors add it, the fewer last-minute delays. Each investor needs:
Inaccurate brokerage information is the most common cause of delayed in-kind transfers. Nudge your investors to add and double-check their details ahead of time.
You can send this link to investors to add their brokerage information in one click: seedlabs.com/brokerage
Once the account is open and the shares are in it, here's the sequence — from shares landing in the deal's brokerage account to reaching your investors. Shares always come into the vehicle first; Seed Labs runs the waterfall and confirms carry before anything is distributed out.
| Seed Labs handles | You (the GP) handle |
|---|---|
| Distribution preview and carry waterfall calculations | Opening the brokerage account |
| Capturing investor brokerage info and forwarding it to the broker | Authorizing and executing share transfers |
| Tax review and any required withholding | Interfacing directly with the brokerage firm |
| — | Pulling shares into your account with the brokerage firm |
Seed Labs provides the calculations and brokerage details but cannot place orders on your behalf.
Questions? Contact us at team@seedlabs.com.
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