Revamped Employee Onboarding Experience

Employees registering their account on Carta for the first time can now provide their personal information as part of the onboarding process to complete their user profile. 

Who this affects?

Employees who have been issued ISO/NSO option grants or Restricted Stock Units and are registering with Carta for the first time. 

What’s new?

With an objective to provide insightful experiences, we’ve revamped the employee onboarding process to allow users to complete their user profile. Every employee registering with Carta for the first time to accept their first RSU or ISO/NSO option grant will now have the ability to provide the following information:

  • Personal details such as name, date of birth and country of citizenship 
  • Tax ID 
  • Address

Capturing these details upfront allows employees to be transaction ready for events such as exercising.

 

After successfully completing their user profile details, users will be directed to the Tasks page where they can accept their security.  

Timing

  • Available now to 20% of randomly selected Carta customers 
  • General availability for all Carta customers coming by the end of Q2

Improved Capitalization > by Share Class Experience

Soon, companies will have access to the updated Capitalization > By Share Class view. This page comes with improved performance for large Cap Tables, allowing you to view and interact with your Cap Table up to 5x faster.

To access this view, you can navigate to Capitalization > By Share Class.

What’s next?

We will continue to improve the experience, adding a new summary visualization to the top of the page, and improving the navigability between the By Share Class and the By Stakeholder Cap Tables.

Resources

Support Article: Capitalization Table - By Share Class

New Updated User Roles

Soon, Carta customers will start seeing an expanded set of Roles to help you reflect the different individuals who are handling different aspects of Cap Table management.

For now, users assigned to new roles will serve as point of contact for their areas. Over time, these individuals will see updated experiences and be guided to relevant Carta tools.

To see this experience, Navigate to "Company > Permissions and Roles > Roles"

Portfolio Overview Redesign

Users with holdings in private and public companies can now view their holdings details directly from the Portfolio screen for easy access.

Who this affects?

Shareholders with holdings in private and public companies.

What’s new?

With an objective to provide insightful experiences, we’ve redesigned the Portfolio Overview screen to surface important holding details for each company. This redesign introduces usability enhancements by eliminating extra clicks and effort required to find the information needed to view and understand equity. 

We know things like the quantity of option grants, vesting schedule, and values of securities are some of the most important metrics to have top of my mind when reviewing your portfolio. In the Portfolio Overview, each private company card will now present the following information with the ability to view further details when clicked:

  • Details of your holdings in each company and their vesting schedule 
  • Summary of your securities
  • Current FMV if you have holdings in the company or have exercisable options 
  • A vesting progress bar highlighting the number of options exercised in comparison to the amount granted 

Each public company card will now present the following information with the ability to view further details by clicking on the company name:

  • Market Value
  • Total number of shares held
  • Total holdings value
  • Net holdings value

Carta Web now has Section 6039: Form 3922 tax form generation

What's new? 

Carta Web now supports the generation of Form 3922 for Employee Stock Purchase Plans in the Company Administrator view. Companies that would normally have access to the Compliance tab, can now request access to Section 6039 from their Customer Success Managers. Form 3922 forms are due to stakeholder portfolios by January 31, 2022. By enabling this functionality in Carta Web, administrators are now in control of the Form 3922 generation and distribution, similar to Form 3921 for Incentive Stock Option Exercises.

NOTE: This feature can be enabled upon request from companies that have an Employee Stock Purchase Plan.

From the IRS:

Corporations file this form (3922) for each transfer of the legal title of a share of stock acquired by the employee pursuant to the employee's exercise of an option granted under an employee stock purchase plan and described in section 423(c) (where the exercise price is less than 100% of the value of the stock on the date of grant, or is not fixed or determinable on the date of grant).

How to Use

  1. To generate Form 3922, navigate to Compliance > Section 6039.
    NOTE: TCC is not required to generate Form 3922 Copy B for employees.
     
  2. Click Generate.
     
  3. Select the Effective Year of the report.
     
  4. Review any missing information, check off the box to confirm company data, then click Next: add contact info. If any information is missing, complete the information, then return to this stage.
     
  • If Company tax data is not complete:

    1. Navigate to Company > Settings.
    2. Click into the Profile tab.
    3. Enter Tax ID, TCC (required to generate Copy A, but not required for Copy B) and address.

  • If Stakeholder tax details are not complete, update missing data under the Stakeholder details tab of the same Form 3922 page

    1. The names, addresses, and SSNs can be edited individually by clicking Edit to the right of the stakeholder’s row.
    2. The stakeholder details can also be updated in bulk via Stakeholders > All stakeholders page. Review these instructions to bulk update stakeholder details.

 

5. If the missing data was entered in, return to the Compliance > Section 6039 page and click Generate to click through the steps to proceed and add company contact information. The company contact is formatted into the electronic Copy A .txt file that will be uploaded to the IRS site.


Click Generate Form 3922 to begin the generation of the files.

 

6. Refresh the page after some time if you see a spinning wheel or navigate away and return later.

 

7. Once generated, click Download reports for the tax year to download a .zip file to your local drive that contains all necessary data for Copy A (efile), and Copy B (statements).

 

The .zip file will be split out into the following three files:

  • efile will be a specially formatted electronic .txt file.
    NOTE: Do not edit this file. Only download and upload to the IRS FIRE site. If any data needs to be updated, repeat the initial steps for the same filing tax year to regenerate the reports and download the updated files.
     
  • statements should be delivered to all holders who acquired stock through an ESPP by the January 31st deadline and can be delivered electronically on Carta by clicking the link to Deliver participant statements

 

For any filing questions, contact your tax advisor. 


Who this affects

Public and Private Market companies with an ESPP. 

Timing

This feature can be enabled on demand by reaching out to our support team or Customer Success Managers.

What's Next

The product team will be enhancing Form 3921 functionality to bring it more in line with the new Section 6039 admin experience.   

Improved Public Exercising Experience

Option exercising with Public companies is now easier than ever. 

The exercising experience for public companies has been improved. The exercise request is now a coherent workflow guiding users through each step and providing key information about the exercise. With this detail, users can be more confident with their selection at each step of the exercise request. If there are issues with the exercise, clearer banners explain how Carta calculates share amounts and market prices.


Who this affects: 🇺🇸 Public US companies

What's new:

  • New experience for exercise requests:

    • Added explanations of exercise transaction methods
    • Clearer confirmation of address and payout method
    • Improved order details with indicators on maximum eligible options and clear explanation of order types
    • Incorporated review of taxes withheld and reminder of potential for additional taxes owed at end of the year
    • Summarized the exercise request clearly laying out the cost and transaction details so users understand what will be needed 
  • Cashless exercising reflects issuer imposed trade limits

Action required: No action required

Timing: Released to 100% of all public companies on Jan 24, 2022

Pre-filled W-9s in LP Closings Tool

What's New

LPs subscribing to Funds and SPVs using Carta's Closings Tool can now E-Sign a pre-filled W-9 while filling out subscription documents. 

Having LPs submit a tax form is an important part of the closings process for any Fund or SPV to ensure tax teams correctly prepare LP K-1s. We received feedback from LPs about the friction of printing, signing, and uploading W-9s and wanted to streamline the process.

How it Works

For Individuals

For U.S. based LPs subscribing as an Individual, we can now optionally pre-fill a W-9 for them to review and E-sign in just three clicks. The W-9 is pre-filled based on the information the LP already provided as part of their subscription. 

For Partnerships and LLCs

For LPs subscribing as a partnership or through a LLC we'll ask some additional questions to ensure we are accurately representing the LPs federal tax classification on the W9.

With the initial release of this product we will not be pre-filling W-8s or W-8BEN-Es for non-US LPs but will still allow them to upload their own form.

Who this affects

This is now available to any LPs using Carta's Closings Tool. The Closings Tool gives LPs a quick and easy way to fill out Fund and SPV subscription documents. 

IFRS Initial Release - Financial Reporting

What’s new

Companies using our newest version of the financial reporting tool can now report following International Financial Reporting Standards (IFRS). 

This is the first release of our IFRS reporting that includes:
1. Tranche based valuations
2. FIN28 amortization
3. Correct relationship valuation methodology (differs from US GAAP)
4. Stakeholder country field added to reports
5. Disclosures
6. Stock-based compensation expense journal entry
7. Report error validations specific to IFRS reporting

Later releases will include:
1. In-app custom assumption overrides
2. Forfeiture rate by grouping

How it works

When going to create a new expense scenario, there is now an additional step where users can select which reporting standard they want that scenario to follow. Users have the ability to create multiple scenarios to support both IFRS and US GAAP.

Once the scenario is created users can create both SBC expense reports and disclosure reports that follow the standard and give supporting calculations. 

Who this affects

Private and public companies using our new financial reporting tool. 

Timing

Available for legacy V1 IFRS users and beta customers. If you have a customer that is interested in being a beta user, reach out to Jess Carthey via slack. 

GA will begin with the second release which includes in-app custom assumptions. 

1099B Cost Basis Report available to Company Admins

What’s new?

We are releasing a report to all Private Market companies for administrators to review their certificate cost basis and original acquisition dates. This report will allow administrators to view cost basis data prior to the delivery of 1099B tax statements to stakeholders by mid-February.

How it works

This in-app report is available by navigating from Capitalization -> Reporting -> Form 1099b cost basis report.

Administrators will be able to view columns like stakeholder details, certificate ID's, quantity of shares sold, date acquired (original acquisition date), proceeds, gain/loss, and including various cost basis fields: 

  • cost_basis_total_certificate = full value going back to the original certificate
  • cost_basis_per_share = cost basis of total certificate / total shares quantity
  • cost_basis_sold_certificate = cost basis per share X sold shares quantity

From this report, Issuers can identify which certificates need to be changed and/or excluded from tax filing, and will have the opportunity to correct the data until late-January.

Who does this impact?

This report will be available to individuals with role permissions of Company Admin, and including Company Editors.

What’s next?

In the next month, Carta's Liquidity team will be reaching out to ensure that data has been reviewed and is considered approved by Issuers for generating 1099B statements. Stakeholders will be able to access tax statements in their portfolios by mid-February.

Tracking Share Class Changes

Private market issuers that go-live on or after 11/09/2021 can now track updates to company share classes’ rights and preferences as they are changed over time. This feature will roll out to other issuers in the next few weeks.

Users with the Legal administrator permissions will be able to make changes to the share class details. Users with the Company editor or Company viewer permissions will only be able to view the share class details.


Experience Overview


  1. Navigate to Securities > Shares.
  2. Click Manage share classes and select Create/edit share classes.
  3. The in-app spreadsheet loads in view-only mode, to prevent accidental input, which is indicated by the grey rows.
  4. Create a new share class by clicking on the related button on the top-right of the screen.
     
  5. To make edits to the share class details, click the Edit to the right of the AOI version date and name. If editing from the active AOI version, Admins will have the ability to reflect both a clerical error or amendment

    1. If you are editing a past AOI version, Admins will only be able to make edits because of a clerical error.
    2. If reflecting an amendment, Admins will be able to upload the related Articles of Incorporation (AOI) or select one from the Library page. In addition, a name can be added to the AOI version.
    3. Click Continue to save.

  6. At this point, the Admin can make changes in the spreadsheet. The side-panel will expand to show helpful content related to the selected cell.
    Cells that are painted light gray cannot be edited because the data may be in-use, a calculated value, or not applicable. Respectively, examples include share class names, the calculated outstanding value, and conversion price for common shares. Reference your AOI or contact your legal partner if you need help filling out this spreadsheet.
  7. After edits have been completed, click Finish editing and save.

Carta will check your entries for any errors and provide actionable messaging to help you make corrections.

  1. Review the summary of changes, then click Confirm and save. No email notifications are sent due to the changes.
  2. Admins can navigate between AOI versions with the AOI version selector, which will show the filing date and version name as dropdown options.


Carta will be making improvements to tracking the company’s cap table, financing history, and reporting in the next few months to incorporate time-versioned share class information.

Have questions? Read about FAQs in our support article.


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