Learn how to manually record option exercises as an admin when exercises occur outside Pulley's online approval workflow. This process updates your cap table with exercise details, generates share certificates, and maintains accurate records of stakeholder holdings.
When to use this workflow
Recording historical exercises that occurred before using Pulley
Logging exercises that happened offline or outside the platform
Backdating exercises to a previous date
You're on Startup plan (manual recording is your only option)
⚠️ When NOT to use this workflow: If you're on Growth plan or higher and stakeholders submit exercise requests through Pulley's approval system, those exercises record automatically when you approve them. You would only use this process to manually record exercises that were facilitated outside of Pulley.
Understanding manual exercise recording
Manual exercise recording is how admins enter exercise information directly into Pulley without the stakeholder submitting a request in Pulley. This will inform cap table changes based on exercises that took place outside of Pulley.
For more information on reviewing/approving Pulley exercise requests, see our guide here →
Common scenarios
You're migrating to Pulley and need to record 50 historical exercises from the past two years. Rather than having stakeholders re-submit requests for exercises that already occurred, manually record each one with the historical date and payment details.
A stakeholder exercised options before your company started using Pulley's exercise request feature. You have their payment records and documentation, so you manually log the exercise to reflect it in your cap table.
You're on Startup plan, which doesn't include the exercise request workflow. All exercises in your company get recorded manually by admins after stakeholders complete the offline exercise process.
Step-by-Step: Recording an exercise
The following workflow walks through the basics of how to create and record exercises that occur outside of Pulley to be added to you Pulley cap table.
Step 1: Navigate to an existing options grant
Starting from your admin dashboard, go to the Cap Table
Locate either the grant or stakeholder whose exercise you're recording.
For grants: Select the Certificate ID to view the grant
For stakeholders: click their name (Stakeholder column), then select the correct grant Certificate ID from within their stakeholder profile.
By clicking the Certificate ID, you will see the grant's current status, vested and unvested options, and any previous exercises.
Step 2: Start the recording process
With the grant details open, click the Actions button
Select Record Exercise from the dropdown.
Step 3: Enter exercise date and basic details
The form opens with fields for the essential exercise information.
Exercise date: Enter the date the exercise actually occurred. This can be today's date for a current exercise, or a historical date if you're backdating. The date you enter here determines when the exercise appears in your cap table timeline and activity feed the amount eligible for exercise.
💡 Important for backdating: When recording historical exercises, use the actual exercise date from your records. This maintains accurate cap table history and ensures proper sequencing of events. However, be mindful that backdating has compliance implications, so only use historical dates when recording exercises that genuinely occurred in the past.
Step 4: Specify exercise share quantities
Indicate how many options were exercised. Depending on the grant structure, you may see one or two quantity fields: ISO and NSO.
For grants without splits
If the grant doesn't have an ISO/NSO split, you'll see a single quantity field. Enter the total number of options exercised. Pulley recognizes the grant type automatically (whether it's all ISOs or all NSOs) and applies the correct treatment.
For grants with ISO/NSO splits
You'll see separate input fields for each type:
ISO quantity - Number of ISOs exercised
NSO quantity - Number of NSOs exercised
Enter the quantities that match what the stakeholder actually exercised. You can enter amounts for both types, just ISOs, or just NSOs, but ensure that the inputs reflects the share breakdown of the actual exercise.
If you're recording a historical exercise and you're not certain of the ISO/NSO breakdown, check the original exercise documents or agreements. They should specify which type was exercised. For compliance and tax accuracy, it's important to record the split correctly.
Step 5: Verify cost and tax information
For each option type, you'll record the financial details of the exercise.
Strike price: This auto-fills from the grant, but verify it matches what the stakeholder actually paid per share. If there's any discrepancy (for example, if early exercise had a different price), adjust accordingly.
Tax withholding (NSO portions only): For NSO exercises, you need to record the tax amount that was withheld from the stakeholder. This represents the ordinary income tax on the spread between fair market value and strike price at exercise.
Enter the actual tax amount that was withheld. If no tax was withheld, common for offline exercises where the stakeholder will handle taxes separately, enter $0. Don't estimate or calculate what should have been withheld; record what actually happened.
For ISO portions: ISOs typically don't have immediate income tax withholding at exercise (though they may trigger Alternative Minimum Tax). The cost you record is primarily the strike price times quantity.
Step 6: Generate certificates
Click Assign IDs & Legends to prepare the share certificates that will be issued for this exercise.
Pulley automatically generates certificate numbers in sequence for your company. You'll see:
Prefix: Usually your company abbreviation or a standard prefix (e.g., "CS-" for common stock)
Certificate ID: Sequential number for this certificate
You can accept the defaults or customize them. Some companies prefer specific numbering schemes or prefixes that match existing systems.
For ISO/NSO split exercises
Pulley generates separate certificate IDs for each type. You'll see one ID for the ISO certificate and another for the NSO certificate. The system handles this automatically to maintain proper documentation.
Stock legends
Select any applicable stock legends that should appear on the certificates. Legends are legal notices about transfer restrictions, securities law compliance, or other requirements.
Common legends include:
Securities law restrictions (Rule 144, etc.)
Transfer restrictions per stockholder agreements
Right of first refusal notices
Other company-specific restrictions
If you're unsure which legends apply, consult your legal counsel. Most companies have standard, default legends that appear on all certificates.
Step 8: Review before finalizing
Click Review & Submit to see a comprehensive summary of everything you've entered:
Exercise details |
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Share quantities |
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Financial information |
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Certificates |
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Review every detail carefully. Exercise records become part of your cap table's audit trail, so accuracy matters. If you spot any errors, use the back button to return and correct them before submitting.
⚠️ Especially important for historical exercises: When backdating, triple-check the date, quantities, and financial amounts match your original documentation. Inaccurate historical records can create compliance issues later.
Step 9: Record the exercise
When everything looks correct, click Record Exercise to finalize the entry.
Pulley processes the exercise and updates your cap table immediately. You'll see confirmation that the exercise was recorded successfully.
What Happens After Recording
Cap table updates instantly
The moment you record the exercise, your cap table reflects the change:
The stakeholder's option holdings decrease by the exercised amount
Their common stock holdings increase by the same amount
The option grant shows reduced available quantities
Fully diluted share counts adjust to reflect the new common stock
Share certificates generated
Pulley creates new share certificates for the exercised shares. These certificates document the stakeholder's ownership of the newly acquired common stock.
For single-type exercises: One certificate is generated for the full exercised amount.
For ISO/NSO split exercises: Two separate certificates are generated—one for the ISO shares and one for the NSO shares. Both appear on the stakeholder's profile under their securities. Each certificate clearly indicates its type and references the originating option grant.
All certificates are immediately available in the stakeholder's portal (if they have access) and appear in your admin view of their holdings.
Activity feed logging
The exercise appears in your activity feed. This creates an audit trail showing:
What shares generated from the exercise
When it was recorded
Who recorded it (your admin account)
This audit trail is permanent and helps with compliance, financial audits, and historical review.
Grant status updated
The original option grant now shows:
Reduced total options (original amount minus exercised amount)
Exercise history (link to view all exercises from this grant)
Updated vesting status (exercised options are marked as such)
The grant remains visible on the stakeholder's profile even after full exercise, maintaining complete grant history.
Handling special scenarios
Backdating exercises
When recording historical exercises, the exercise date you enter determines where the transaction appears in your cap table timeline. This date should match when the exercise actually occurred, not when you're entering it into Pulley.
Why accurate dates matter
Cap table events occur in sequence. If you're recording a March 2023 exercise in February 2026, using today's date would incorrectly show the exercise happened after subsequent events like fundraising rounds or new grants. The historical date keeps your timeline accurate.
Tax reporting also relies on correct exercise dates. Forms like W-2s and 1099s need to reflect when income was recognized, which is the exercise date, not the recording date.
Best practices for backdating
Use the exact date from original exercise documentation
Keep original documentation on file to support backdated entries
Consult your tax advisor if backdating spans multiple tax years
Correcting recorded exercises
If you discover an error after recording an exercise, don't attempt to record a "correcting" exercise. This creates duplicate entries and confuses your cap table.
Instead, contact Pulley support for assistance. Exercise records are part of your audit trail, so corrections require careful handling to maintain data integrity. Support can help you:
Correct exercise dates
Adjust quantities or amounts
Fix certificate numbers
Update payment details
Please provide support with the corrected details and any documentation supporting the correction.
Common Questions
Q: What's the difference between recording an exercise and approving an exercise request?
Q: What's the difference between recording an exercise and approving an exercise request?
A: Recording an exercise is manual admin-initiated data entry. You're logging an exercise that already occurred outside Pulley's system. Approving an exercise request is part of the Growth+ plan's workflow where stakeholders submit requests through Pulley and you review and approve them.
If you're approving stakeholder requests, you don't need to manually record those exercises. Pulley handles it automatically after approval.
Q: How do I know if an option grant has ISO/NSO splits?
Q: How do I know if an option grant has ISO/NSO splits?
A: Open the grant detail page. If the grant exceeds the $100,000 annual ISO vesting limit, you'll see it displayed as two separate quantities: "ISO" and "NSO" with amounts for each. The split is calculated at grant creation based on vesting schedule and fair market value. If you only see one quantity, the grant doesn't have a split.
Q: What if I'm not sure how much was ISO versus NSO in a historical exercise?
Q: What if I'm not sure how much was ISO versus NSO in a historical exercise?
A: Check the original exercise documentation—the agreement should specify whether shares were exercised as ISOs or NSOs. If the documents don't clearly indicate the split or are unavailable, contact the stakeholder who exercised for clarification, or consult your company's records from when the exercise occurred. For tax compliance and accurate reporting, it's important to record the split correctly rather than guessing.
Q: What if the stakeholder paid a different amount than the calculated exercise cost?
Q: What if the stakeholder paid a different amount than the calculated exercise cost?
A: Record what actually happened. If the stakeholder paid less (perhaps due to company financing assistance) or more (due to additional fees or charges), enter the actual payment amount. You can add a note in the payment details explaining any discrepancy. For significant deviations from standard exercise terms, consult your legal counsel about proper documentation.
Q: Can I undo or delete a recorded exercise?
Q: Can I undo or delete a recorded exercise?
A: Exercises can be undone within the grant directly by selecting Actions > Undo Exercise(s)
❗Warning: This will undo ALL exercises that took place on the option grant
Q: Do I need to upload any documents when recording an exercise?
Q: Do I need to upload any documents when recording an exercise?
A: The manual recording workflow doesn't support document uploads, but you should maintain original exercise documentation separately (payment records, exercise agreements, stakeholder correspondence). If documents need to be attached to the stakeholder's profile in Pulley, you can upload them through the stakeholder's documents section or as an attachment to the grant after recording the exercise.
Q: How do recorded exercises appear to stakeholders in their portal?
Q: How do recorded exercises appear to stakeholders in their portal?
A: If stakeholders have portal access, they'll see their updated holdings after you record the exercise. Their option quantities decrease, common stock increases, and new share certificates appear in their documents. The exercise appears in their transaction history just as if they'd submitted it through a request workflow.