Carta is a financial technology (FinTech) platform that offers software solutions for companies looking to manage equity and ownership of their company with a cloud-based solution. Created in 2012, Carta has globally managed over 2,200,00 equity owners, 30,000 companies, and $2.5 trillion in assets on the platform. From providing equity management and compensation tables to supporting Venture Capital (VC) firms and assessing company liquidity, Carta offers its clients a package of features to support asset management and financial distribution for their company.
What is Carta used for?
Carta attempts to ease the process of managing and distributing capital inside and outside of a company. To do so, the solution focuses on four preeminent use cases:
- Venture Capital
- Equity Management
With respect to liquidity, Carta has curated a platform for stakeholders and investors alike to simplify share management. The FinTech solution allows shareholders to easily convert shares into cash and vice versa all while updating capital tables automatically.
Aside from supporting a company’s liquidity efforts, Carta also addresses compensation. With the help of Machine Learning (ML) technology, Carta is able to provide current market insights to companies about the compensation ranges that can be broken down by job level, position, department, and more.
Not only does Carta support the development of compensation packages, but it also helps venture capital partners with managing their firms. The platform allows partners and associates alike to track their deals, identify current ownership, evaluate companies, and much more. By automating administrative tasks, Carta enables VC firms to focus on prospecting, talking with founders, and securing deals.
Additionally, Carta supports the development of equity within a company. With the use of Capital Expenditure (CapEx) tables, Carta helps company owners manage shares, valuations, accounting, and fundraising all in one place. From detailing how much and how many employees own shares to identifying a Series A valuation and the number of available shares, Carta is built to support a wide range of equity management tasks.
Who uses Carta?
Supported by notable clients such as Canva, Tribe, Calendly, QED Investors, and more, Carta has curated a platform to support the financial management of many. Aside from companies that are currently Carta users, the platform has catered specific solutions for the following users:
- Law Firms
- Finance Department
- Human Resources (HR)
Carta is able to support VC firms and angel investors alike by allowing them to transfer energy spent in the back office and on to startup growth. This FinTech solution supports investors by allowing them to automate accounting, administrative, and financial services while accessing top-tier analytics breakdowns and dashboard summaries to evaluate their performance.
For Founders and Law Firms, Carta supports provides a similar infrastructure for companies and partners to build off of. Founders and partners are able to generate company-specific cap tables, issue legal agreements, track valuations, and stay compliant with current equity regulations.
On a deeper level, Carta supports the tasks of tax, audit, accounting, and finance departments together. It enables them to forecast financial scenarios, prioritize CapEx tables for auditing, and manage liquidity automatically.
The last user base that Carta tailors to is the Human Resources department. HR representatives are able to view the latest compensation information, assess liquidity, deliver accurate information to interviewees, and address pay gaps if necessary.
What Does Carta do?
With respect to Carta supporting Compensation, Liquidity, Equity Management, and Venture Capital inside a company, the platform offers the following solutions for each use case:
- Compensation: Benchmarking, Total Rewards
- Liquidity: Tender Offers, IPO Support, Auctions, and Secondaries
- Equity Management: Cap Tables, 409A Valuations, Expense Accounting, LLC Management, and Tax Advisory
- Venture Capital: Fund Administration, Fund Formation, SPVs, ASC 820 Valuations, and Line of Credit
For founders, human resource personnel, and the finance department, all important parties are able to access compensation benchmarks to reward, track, and update personnel salaries, shares, and bonuses across the board. In addition, not only can business personnel track and update compensation and equity, but Carta also allows employees to view condensed rewards statements that details pay, benefits, stock options, and more.
If companies are looking to receive a tender offer to sell their company or VC partners are looking to exit their positions, Carta allows all involved personnel to issue and view tender offers. On the contrary, if companies are looking to take their company public rather than sell to the next Private Equity (PE) firm, then Carta offers its users access to resources that prepare them for an Initial Public Offering (IPO).
Carta enables founders to manage their equity across the board. It allows ownership groups to track shares, access accurate capital tables, prepare for a 409A audit, readily access tax advisors, and generate important compensation reports to continue supporting their business.
For the VC world, the FinTech solution offers partners the ability to automate administrative tasks, access startup financial reports, start a fund to onboard lead partners and develop a thesis, create an isolated Special Purpose Vehicle (SPV), access needed capital with a line of credit to close a deal, or prepare for audit inquires during an ASC 820.
How Does Carta work?
Carta’s platform targets private companies to assist them with managing equity and ownership with a number of features and tools. At the core of the platform, Carta consists of a dashboard-like management tool where founders and other personnel can input numbers and other information into tables and allow machine learning technology to automate results on the backend.
- Personalized Dashboard
- Automatic Updates
The main component of the Carta platform is the cap table management tool, which empowers companies and investors to track, manage, and update equity distribution among key stakeholders. This includes issuing new shares to employees and new investors, changing ownership percentages, and optimizing equity for a new fundraising round. The platform also includes a 409A valuation tool that helps companies estimate the value of their equity and a compliance tool that helps companies ensure that they are meeting all relevant regulatory requirements.
In addition to these primary features, Carta also offers other tools and features to manage equity such as tender offers, fund formations, compensation packages, and guidelines on how to comply with regulatory agencies.
|Cap Tables||Tender Offers|
|Fund Formations||409A Valuations|
|Compensation Packages||Regulatory Compliance|
What Does Carta Integrate With?
Carta is built to integrate with a number of different platforms in the accounting, business management, and human resource sectors. The following are examples of the top integrations that Carta offers to its clients:
Who are Carta’s Competitors and Alternatives?
Like any financial technology platform, Carta competes with an array of companies that offer their own set of services for equity and capital management. From providing additional features that help companies securely manage finances with regulatory approval to providing simple, yet affordable access to a cap table management platform, the companies highlighted below are key alternatives to Carta:
- Vestd: Offering an affordable solution for companies looking to set up simple share distribution.
- Astrella: Leverages blockchain technology to set up cap tables, ownership data, and stock distribution plans for law firms, VC firms, and startups.
- Gust: Helps companies manage equity accumulation from the start-up phase to IPO.
- OptionTrax: Provides companies with an automated solution or a team to help them manage their cap tables accordingly.
- Pulley: Specially designed cap table management software for startups growing rapidly.
- Certent: Creating an equity management platform for public and private companies to securely manage compensation plans.
- Ledgy: An international company focused on providing private, secure, and accurate cap tables for companies looking to grow.
- Shareworks: Focused on recruiting top-performing employees with a simple equity and distribution platform.
As of now, there is a free plan called ‘Launch’ that companies interested in digitally managing equity can use. The ‘Launch’ plan is available for newly established startups that have less than 25 stakeholders and $1 million in raised capital. Those interested can start with this plan and access elementary features of the platform such as capital table management, SAFE financing, board consents, payroll integration, and more.
Although, for parties interested in unlocking the full potential of the Carta platform, the team at Carta works with each company and investor group separately to generate pricing models that are tailored to their needs. Future users are encouraged to contact the sales team, schedule a demo, and work with their representatives to negotiate a price and set up their accounts.