How do I record escrow?

To record escrow, you need to first enter a Contingent Payment (escrow) Round for your company followed by a Transaction or a series of Transactions. 

Add a Contingent Payment (Escrow) Round

  • Add a round.
  • Enter the Name of Round, for example "Escrow".
  • Select the Company to which it applies.
  • Enter the date you were assigned the escrow as the Closing Date.
  • Select "Contingent Payment" as the Security Type.
  • Enter the Expected per unit value of payment (optional).
  • Enter the Target Payment Date (optional).
  • Enter the Expiration Date (optional).
  • Enter notes in the Memo field (optional).
  • Click "Save".

Next, add one or more escrow-related transactions. 

Add an Escrow Assignment Transaction

  • Add a transaction.
  • Select the Company to which the escrow applies.
  • Select the Round of Investment to which the escrow applies (or any one round if multiple rounds), but not the new round you just created (i.e. If you sold Series A stock and received escrow, then select the Series A round).
  • Select "Escrow Assignment" as the Transaction Type.
  • Enter the Date you were assigned escrow.
  • Enter the Escrow Amount assigned.
  • Enter the Share Price (optional).
  • Enter the Escrow Release Date (optional).
  • Select the new Contingent Payment (Escrow) round you created as the New Round.
  • Verify that the Exit Transaction box is checked.
  • Enter notes in the Memo field (optional).
  • Click "Save".

Repeat the above process if there are multiple escrow assignments. Once entered, you will be able to view your Contingent Payments in Current Investments by selecting the by Round tab and in Exits & Returns in the Remaining Value column and by selecting the Contingent Payments tab. 

Once payment of escrow is made, add a new transaction to show that the Escrow has been released.

Add an Escrow Release Transaction

  • Add a transaction.
  • Select the Company to which the escrow applies.
  • Select the Contingent Payment (Escrow) round you created as the Round of Investment.
  • Select "Escrow Release" as the Transaction Type.
  • Enter the Date the escrow was released.
  • Enter the Escrow Amount released.
  • Enter the Share Price (optional).
  • Enter the Shares (optional).
  • elect the new Contingent Payment (Escrow) round you created as the New Round.
  • Select the box if 1244 Qualified, if applicable (optional).
  • Verify that the Exit Transaction box is checked.
  • Enter notes in the Memo field (optional).
  • Click "Save".

Once the escrow is properly released, you will see it on the Exits & Returns table in your account.

Have more questions? Submit a request

Comments

Powered by Zendesk