Exercise flow improvements

Optionholders at private companies will now see an improved exercising experience where they can clearly see fair market value (FMV), exercise spread, and option income. 

Who this affects:

  • Optionholders exercising option grants from private companies

What's new: 

  • Current fair market value (FMV) - Optionholders can see the current fair market value the issuing company has on file, which determines the tax implications of their exercise.

  • Exercise spread on option grant - Optionholders can see the per-grant spread when selecting a grant to exercise. This shows the difference between exercise price and fair market value.

  • Overall gain/loss - When selecting the quantity of shares to exercise, optionholders can see the overall gain/loss for their exercise. This is useful for understanding tax implications of an exercise.
  • Tax implications - Optionholders will be able to see tax implications more clearly. If the exercise is taxable and the issuing company has provided tax rates for the jurisdiction of the holder, the holder will see a table of the relevant taxes for their exercise. 

Carta now supports performance conditions for grants with custom vesting schedules

Performance conditions can now be set at the tranche level for vesting schedules that have been customized for an individual grant. Administrators can create custom schedules for individual participants and attach vesting tranches to performance conditions. 

With this enhancement, performance awards can now be attached to grants without vesting templates. This compliments our existing performance award functionality that allows for performance awards to be attached to vesting template tranches.

To create a custom performance vesting schedule, first select Custom vesting in the vesting schedule column when drafting an award:

This selection will bring up a vesting schedule creator. If the vesting schedule is unique to this particular grant, click Custom one time schedule. 

Note: if the vesting schedule for the grant is not unique, we recommend clicking Create schedule as template. Creating a template will allow multiple grants to use the same vesting pattern.

After clicking Custom one-time schedule, enter the vest dates and quantities. If a performance condition applies to one or more of the tranches, select it in the Performance Condition column.

Following the creation of the custom performance vesting schedule and the drafting of the grant, the grant’s vesting schedule and payout will be governed by the performance condition. From this step, the performance condition’s achievement and payout function in the same way as grants with standard and custom performance vesting templates:

Carta now supports multiple performance conditions on a single grant

Performance conditions for performance awards can now be individually set per vesting tranche. Administrators can control the payout of performance conditions, including payouts greater than or less than 100% per vesting tranche. 

Creating performance conditions using custom vesting templates

When creating a custom vesting template, performance conditions can be set at the vesting tranche level. These performance conditions are controlled through the performance module and administrators can set payout percentages upon condition achievement. 

Performance conditions will apply to every grant attached to the performance vesting template. 

Performance awards can also be added on to milestone vesting templates. These act as a second performance condition in addition to the achievement of the milestone event. Milestone vesting templates can be used with or without performance conditions:

Achievement of a performance condition will flow back to all grants tied to vesting tranches set up with that condition:

Email customization for document sharing

This month we released a new feature on Carta to allow users of a fund to customize the email sent to LPs when sharing documents. This feature is available for all Fund Administration and LP Portal customers. To use the feature:

1. Select ‘Share documents’ on the Documents page.

2. After select Share documents you will have three options for sharing documents: Send with daily digest, Send immediately, No notification.

3. When ‘Send immediately’ is selected you will have the option to
Open email editor.

4. The email editor will allow you to:

  • Customize the subject line
  • Customize the header
  • Customize the email body
  • Include dynamic fields in your text
  • Send a preview email to yourself before sending

 5. After completing the email customization, you will be able to share the documents to your LPs.

Performance Awards in Custom Reporting

You will now be able to see data related to performance awards in our custom reporting suite. 

These fields include:

Performance Condition - The name of the performance condition
Condition type - Whether the condition is event based, market-based, or non-market based
Vesting condition details - Any notes regarding this performance condition
Minimum payout - Lowest payout percentage, relative to the original grant amount
Maximum payout - Highest payout percentage, relative to the original grant amount
Vests post-termination - Whether the performance condition could be recognized during a PTEP period to allow vesting
Performance condition recognition status - Whether the condition was recognized or unrecognized
Recognition date - Date the condition is recognized
Actual payout percentage - The payout percentage, relative to original grant amount

You'll see these fields in these reports and are able to add them as optional fields in other custom reports:

Equity Awards outstandingEquity Plan Granted reportOptions outstanding report Securities Ledger 

Improved Equity Plan Balance Report

We're excited to release a new Equity Plan Balance Report for our Private Market customers. This report allows you to see your plan balance across all equity plans and better reflects the effects of plan pour overs and transactional events on securities.

You'll notice some improvements:

  1. All equity plans will be included - you no longer need to select a equity plan while exporting the report
  2. Pour over calculations are more accurate - overdrawn balances are reflected on plans clearly
  3. RSAs are now tracked under "Equity Grants" - we'll be consistently tracking RSAs its an equity award in future reports

You can find this reports under top menu at Capitalization > Reports.

We'll be retiring the older version of the equity plan balance report as part of this release.

Subscription Document Signing for Carta SPVs

Investors can now quickly and efficiently close SPVs on Carta!

General Partners invite prospective investors to their fund, those investors can read and complete the subscription documents, and GPs can close the fund –– all in one simple tool. 

This product currently works with Carta SPVs using standard subscription documents.

Over the next few months, we'll expand this to allow full funds to close on Carta using their own documents and to pre-fill data for LPs that already have a Carta account.we'll  

Information Clarity in the Equity Awards Ledger

What’s coming: The "Quantity" column shown in the "Options" tab of the Equity awards ledger will be re-labeled to "Original quantity" to more accurately reflect the information in this column.

We're highlighting this small change because it comes in anticipation of some improvements to Carta's transactional workflows that will reinforce the dynamic nature of option grants and their quantities.

Who this affects: All companies

What’s better: Information clarity

Timing: Live for all customers December 7th

Roll-forward Reporting for Transaction Modeling

With Carta's new customizable ledger reports, you can easily calculate important values to determine key quantities in potential future transactions.

The fields below are available in all of the customizable ledger reports (Learn more about customizing reports). 

Adjust the as-of date to run the report for a future date. Carta will use existing information, such as vesting schedules, to project future quantities.

Exercisability settings for non-US companies

Non-US, private companies in supported regions now have the ability to enable exercising workflows for their optionholders. Optionholders can access wire payment instructions within Carta after exercise approval to send funds directly to the company.

Who this affects:

  • 🇰🇾   private Cayman Island companies
  • 🇨🇦   private Canadian companies
  • 🌐   + more locations in the future! 

What's new: 

  • Supported non-US, private companies can enable offline wire exercising, allowing their optionholders to initiate and track an exercise request within the Carta platform. 
  • Company admins can manage payment instructions that are provided to optionholders after an exercise is approved. 
  • Company admins can toggle exercisability on and off, as well as select which grant types are exercisable.

Action required: 

  • Company admins must visit the Transaction Settings page to enable exercising
  • Companies must have a valid fair market value (FMV)


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