Commitment Increases in Carta Closings

What’s new?

Fund managers using Carta Closings can now easily increase their LP’s commitments directly in the Carta platform. 

We made closings even easier for you and your investors 

Save time by using our new, standard template that allows you to quickly execute a commitment increase for an LP who has subscribed to your Fund or SPV. Simply enter the details of the commitment change, sign, and share with you LP. 

How does it work?

1. On the Partners tab, select the LP whose commitment or contribution you would like to increase.

2. Enter the information required on our template:

  • Manager name: The name of the managing entity for the Fund or SPV
  • LP signatory: The LP, or the contact who will be signing on behalf of the LP
  • New commitment amount: The additional commitment amount the LP will be agreeing to
  • Effective date: You have the option of designating an effective date or making the effective date the date the LP signs the document 

Then, review and sign the document that reflects the adjustment to the commitment amount. 

3. Last, your LP will receive an email notification that the document is ready for their review and signature. They can easily e-sign the document using their LP Portal.


After the LP signs, the commitment increase is automatically booked in the Carta platform. Plus, Carta will share the countersigned documents with all parties. 

Carta makes this standard template available to all fund administration and SPV customers. You must first check with your counsel to ensure this template is suitable for your needs, and that you understand the legal and regulatory implications of increasing an LPs commitment amount prior to using this feature. 

How do I learn more?

To learn more about this feature, please reach out to your account manager.

Have additional questions about Carta Closings? Check out our fund manager resource and LP support article, or request a demo.
 

Redesigned 409A Acceptance Flow


What’s new?

We have redesigned the way you review and accept your 409A valuation on Carta. This new design presents you first with a quick summary of the analysis along with a note from your analyst letting you know the next steps in finalizing your fair market value (FMV). Once you have reviewed the report, if you have any questions you can contact our team of valuation experts through the support module in the valuation review portal. Lastly, receive board approval from within or outside of Carta to finalize the current FMV on your account. 

How it Works

Once you receive an email notifying you that your valuation is ready for review, you can follow the link within that email to access the 409A ledger where you are able to review and download your valuation. Alternatively, you can navigate to the page within Carta at Compliance > 409A Valuation.




Review your valuation

From the 409A Ledger, once you select ‘Review 409A report’ you will be directed to the valuation review portal. Here you will find an overview of the analysis performed and the concluded FMV along with a note from your valuation analyst informing you of next steps and noting any details within the report that warrant extra attention. Once you have reviewed the analyst’s note and valuation summary, you can download the full report or access the support module from the valuation review portal to access support articles or get in touch with our team of valuation experts. 


Get board approval

Now that you have reviewed the valuation, the next step is to send it to your board for review. You can do so using the board consent feature within your Carta account to easily track acceptance from each board member within the Carta platform. Once all board members have submitted their board approval through the platform, your valuation will automatically be accepted on Carta. If you got approval outside of Carta, that’s great too, simply select ‘My board has approved’ to accept the valuation to finalize the current FMV in your account. Once finalized, the new FMV will be visible to your option holders on Carta.




Carta Closings

What’s New

We revamped the entire limited partner (LP) experience of our closings product. Built with the feedback of the 20,000 LPs who have already closed on Carta, we’re excited to release Carta Closings, providing LPs the quickest and easiest way to subscribe to a Fund or SPV. 

How it Works

Carta Closings guides LPs through the subscription process and ensures that all LPs, from first-time investors to experienced institutions, have a smooth experience.

Improvements include:

A Shorter & Smarter Questionnaire

A typical investor questionnaire contains dozens of questions, most of which are irrelevant to a majority of LPs. We reduced the time your LPs will spend on subscription documents by building a smarter workflow that adds or subtracts questions based on LPs responses to previous questions.

Guided Support

Investor questionnaires can contain legal and industry terms that are confusing to some LPs. Now, LPs will see a dynamic in-app sidebar that defines these terms and provides answers to frequently asked questions throughout the questionnaire. 

Pre-Filled Investor Questionnaire

Once an LP fills out Carta’s Investor Questionnaire, their information is saved and will be auto-populated for all subsequent entities they subscribe to. This allows returning LPs to subscribe to new entities in seconds. 

Additional improvements: 

  • Forwarding subscription agreements: LPs can easily forward the documents to another individual to complete on their behalf, like a wealth manager or assistant. LPs will be notified when the documents are ready for their final review and signature.
  • Integrated data room: Carta Closings allows you to share fundraising documents with LPs at any time during the subscription process through our secure data room. Plus, LPs will be able to access their data room at any point during the subscription process. 
  • Wiring instructions & capital calls: Display wiring and initial payment instructions to LPs (optional) as soon as they submit their documents, and have your initial capital call automatically shared once the LP has been admitted to the entity. 
  • Instant KYC: Built directly into Carta Closings, receive instant KYC/AML compliance checks for your LPs (optional). 
  • Pre-filled W-9s: For U.S.-based LPs subscribing as individuals, Carta can now pre-fill a W-9 for them to review and e-sign. The W-9 is pre-filled based on the information the LP already provided as part of their subscription.

See how it works:

Who this affects

Carta Closings is an optional, free product available to all fund administration clients raising new funds or SPVs. 

More Resources

Support Article for LPs
Support Article for Fund Managers
Request a Demo

409A Ledger Redesign

What’s new?

We have redesigned the 409A Ledger Page where you come to request and review the 409A Valuations of your company and enter the Fair Market Value (FMV) of your company’s options. The goal of this refresh is to help you navigate the valuation process with ease and access resources quickly whenever you need assistance. 

With this updated design you will quickly and easily identify where you are in the valuation process and what to expect next. Carta is here to help you along the way with curated support articles and a variety of options to get in touch with us if you have questions not covered within the articles.

How it Works

Under Compliance > 409A you will find a number of new features designed to help you navigate the Carta Valuation process with confidence.

Valuation Status Tracker

The Valuation Status Tracker at the top of the page clearly indicates where your company is in the valuation request process. Whether you are in the middle of completing your request, if your draft is ready for review or if you are anywhere in between, the tracker will let you know what your next step is as soon as you land on the 409A Ledger page. Also included are tools and support articles to help answer common questions that you may have based on where you are in the valuation process.



Review and accept your valuation

Once you have received your valuation, you can download it for review directly from the Valuation Tracker on the 409A Ledger page. After you have had a chance to review the report and are ready to accept, you will be directed to the final step in The Valuation Tracker, the acceptance workflow. 



Get in touch with our team

Have a question? Navigate to our Support Module on the page and select the contact method that works best for you, our team of experts will follow up with a response typically within 1 business day.



Viewing your 409A Valuations

Now that you have completed the valuation process, your most recent valuation will be displayed at the top of the table at the bottom of the page along with any previous valuations saved to your Carta account. If you have any questions for our Valuation team in between valuations, simply navigate to the new 409A Ledger Page to access our Support model to get in touch with our team of Valuation Experts.




Account Recovery Measures

Who This Affects

Users without a verified secondary email address

What’s New

Additional emails are required to assist users with providing a secondary login credential in case access to their primary email address is lost. As part of our efforts to improve our clients' account security, we are updating the process of adding and verifying your additional email address. 

As part of this release, we will be notifying all users without a verified additional email address to add or verify the email they have listed. This subset of users will be receiving an email notification, as well as an outstanding task in their Carta account’s task manager. 


Timing

  • This update is available to 25% of randomly selected Carta users
  • General availability for all users by the end of Q2

Capital Calls on Android

General partners now have the ability to view and track capital calls from the Carta Android app. Investment firms can now track the progress of on-going and completed calls along with investor details, on the go, straight from the Carta mobile app.

Who this affects

  • Fund administration clients

Supported platforms

  • Android (Previously available on iOS)

What's new

Fund Administration clients can now access their capital call details and investor information from the Carta Android app.

  • The home screen now provides a summary of active capital calls with the ability to view individual call details.
  • Navigating to a capital call allows you to view further call and investor details along with a full investor list which can be filtered by Paid and Unpaid calls.
  • The Fund Details page now also provides a capital summary and the ability to view a list of Active, Drafted, and Completed calls.


New Total Comp roles: Area Lead and Recruiter

We've updated the Total Comp permissions system with two new role types:

  • Area lead: Users with this role can edit employees and view bands for their assigned area(s) and level(s)
  • Recruiter: Users with this role can view bands for their assigned area(s) and level(s)

To add a teammate as an area lead or recruiter, go to the Settings > Permissions and roles page click on "Add User" and follow the instructions in the modal.

You will be asked to provide the teammate's email address, assign a role, select which areas that you want the teammate to have access to, and then select the highest level within those selected areas that they can view/edit. You can also change the role and permissions for an existing user by clicking on the action button (three dots) in the user table and selecting Edit user.



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

Notifications for Qualified Small Businesses

What’s New

Users with holdings in companies identified as Qualified Small Businesses (QSB) will now be notified of the potential tax benefit. Carta determines QSB eligibility when performing a 409A valuation and email notifications will be sent to all users associated with the company once the valuation is accepted. In addition, vesting emails will include information about the qualified small business stock (QSBS) tax benefit.

Furthermore, users can now find a banner in the company overview page within their portfolio that informs them about QSBS eligibility, linking to a blog post to learn more. Finally, users will be notified if their exercise qualifies for QSBS once they submit an exercise request.

Who this affects

US Companies using Carta for 409A valuations that are QSBS eligible and all their stakeholders, prioritizing “Vested” option holders. 

How it works

Email notifications

Emails are sent to all users associated with a company that qualifies as a QSB. If Carta determines the company is a qualified small business, emails are sent once the 409A valuation is accepted. Extra emails are sent to all users each time the company’s valuation includes eligibility. 

Vesting emails

Vesting emails will now include information about QSBS eligibility to help make a more informed decision about exercising. 

Company’s overview page

A banner informing users of the QSBS Eligibility Tax Benefit can be found next to the company’s name in their portfolio. This banner appears for companies identified as qualified small businesses, including information about the potential tax benefit from exercising and the expected timeframe of the company’s eligibility. 

Exercise submission message

Upon submitting an exercise request, the Congratulations page will inform users that the shares are QSBS-eligible. It summarizes the conditions and links to an Equity Education article to learn more (highlighted in red).

Timing

  • General availability for all 409A customers by the end of Q1

Additional Resources

Redesigned Capital Call Request Tool

What’s new?

Previously, our capital call request tool only allowed General Partners (GPs) to request capital from all investors in the fund regardless of their close date. Starting today, GPs can use the redesigned tool to: 

  • Make pro-rata capital calls from their existing investor base
  • Call capital from subsequent close investors 

Additionally, GPs will be able to view a list of all their newly closed investors, as well as any investors whose commitments have increased or decreased since the last capital call. The capital call amounts to be called from these investors will be auto-calculated by the tool for the GP to review. 

How it works

  1. There are two ways you can request a capital call. You can navigate to the Firm Management Page or through the capital calls tab in the fund page. 
  2. Select the type of capital call you would like to request:

    1. Pro Rata capital calls is an improved version of our capital call tool. Input a capital call dollar or percentage amount, followed by call details, and go through the final review step before initiating your capital call.
    2. Subsequent Close capital calls will list out investors who are new and those with changed commitments since the last capital call. You will have an optional text box for additional notes, capital call details, and a final review before initiating your capital call.

Who this affects

This is available for all fund administration customers who are on the Carta General Ledger.

What’s next?

We’ll be expanding the tool’s functionality to handle more complex scenarios, such as calling additional capital from both new and existing investors in the fund. We also plan to embed the PDF notices at the review step to give GPs the option to start the capital call without further approvals.



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