How do I record a contingency?

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

Add a Contingent Payment Round

  • Add a round.
  • Enter the Name of Round, for example "Contingent Payment".
  • Select the Company to which it applies.
  • Enter the date you were assigned the contingency 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 contingent-related transactions. 

Add a Contingent Payment Assignment Transaction

  • Add a transaction.
  • Select the Company to which the contingency applies.
  • Select the Round of Investment to which the contingency 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 a contingency, then select the Series A round).
  • Select "Contingent Payment Assignment" as the Transaction Type.
  • Enter the Date you were assigned the contingency.
  • Enter the Contingent Amount assigned.
  • Enter the Share Price (optional).
  • Enter the Shares (optional).
  • Enter the Contingent Payment Date (optional).
  • Select the Contingent Payment round you created for 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 contingent payment 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 the contingency is made, add a new transaction to show that the contingent payment has been received.

Add a Contingent Payment Transaction

  • Add a transaction.
  • Select the Company to which the contingent payment applies.
  • Select the Contingent Payment round you created as the Round of Investment.
  • Select "Contingent Payment" as the Transaction Type.
  • Enter the Date the payment was made.
  • Enter the Payment made.
  • Enter the Share Price (optional).
  • Enter the Shares (optional).
  • Select the Contingent Payment round you created for 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 contingency payment has been recorded, you will see it on the Exits & Returns table in your account.

Have more questions? Submit a request

Comments

Powered by Zendesk