Introducing Session Types for Tax Advisory


What's new

Employees who have access to Carta Tax Advisory through their employer may now choose from up to four different tax advisory session types. This aims to provide transparency and flexibility so you can have the conversation that's right for you. 

Who this affects

US-based employees subscribed to Carta Tax Advisory through their employer

How it works

Scheduling a session

Log in to your  Carta employee account, navigate to the Tax advice tab.

From there, click on "Book a free session" to browse different session types. 

Once you're on the session type selection page, you'll see a brief outline on how to schedule and a selection of three to four different session types. 

Select the session type that's right for you and click "Schedule free session" to book a time with a tax advisor. 

If you're not quite sure where to start, we recommend starting with the "Understand equity basics" session type to learn about your equity and taxes at a high level.

Note: The "Discuss tender offer participation" session type only appears if your company is currently undergoing a tender offer. 

Preparing for a session

Session types: Discuss tender offer participation | Create tax scenarios

Once you've scheduled a time to speak with a tax advisor, you'll be prompted to upload a few documents. Tax advisors will create personalized tax scenarios using this information so you can have the most accurate tax picture. 

If you don't have these documents on hand now, you can skip this step for later. However, you must upload documents at least 24 hours before your session so advisors have enough time to prepare. 

After uploading your documents, you're ready for your session. 

You'll receive a calendar invite with a zoom link to attend your session at your scheduled time. You can also see this information in your tax advice tab in Carta, with the option to reschedule or cancel using the "View details" button. 

Session types: Ask a quick question | Understand equity basics

Once you've scheduled a time to speak with a tax advisor, there's nothing else you need to prepare ahead of your session.

You'll receive a calendar invite with a zoom link to attend your session at your scheduled time. You can also see this information in your tax advice tab in Carta, with the option to reschedule or cancel using the "View details" button. 



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.




New Hire Onboarding for Tax Advisory

What's new

New hire onboarding allows new hires to access their Carta account before they receive and accept their equity grant. By creating a stakeholder record for the employee, employees receive an email to register for a Carta account. This grants them access to Carta Tax Advisory.

If you do not add new hires they will need to wait to accept their equity grant in order to access Carta resources, which can take several months to approve and issue. 

New employees often have questions about their equity as soon as they join a company, Carta Tax Advisory gives them access to dedicated 1:1 support from equity tax experts from day 1 to help them understand their equity packages. 

Who does this affect?

Companies subscribed to Carta Tax Advisory

US-based employees (new hires) at companies subscribed to Carta Tax Advisory

How can I give new hires access to their Carta account?

Important notes before starting: 

  1. The new hire onboarding process only applies to companies subscribed to Carta Tax Advisory
  2. Tax advisory sessions are only available to US citizens or residents
  3. Adding an employee into Carta as a stakeholder provides them access to Carta services like Carta Tax Advisory. Ensure you only add employees you intend to issue equity to.

The Stakeholder ledger allows users with Company editor or Legal administrator permissions to view and modify information for a person that holds multiple securities across the company 

Navigate to Stakeholders > All Stakeholders


Under the Manage Stakeholders drop-down, admins can add stakeholders individually or in bulk

Individually add stakeholders

Select “Add stakeholder” in the Manage stakeholders dropdown list



A modal will appear requesting information about the stakeholder

Required fields:

  • First name
  • Last name
  • Relationship (i.e. employee)
  • Relationship effective date
  • Add and save an address 

Tax ID, Employee ID, Payroll ID, and other address fields can be input as available, but are not required before equity grant issuance

Bulk add stakeholders

Select Bulk add stakeholders from the Manage stakeholders dropdown


Download the template spreadsheet to import stakeholders’ information, save, and upload the modified file. Carta will run a check on the data entered before saving the changes


Note: Admins should not add new columns or move columns in this sheet. They must use the template as is


Required columns: 

  • First name
  • Last name
  • Relationship (i.e. employee)
  • Relationship effective date (MM/DD/YYYY)
  • Country (3 digit) 
  • State (2 digit)

After the updated xslx sheet is uploaded, click “Submit changes” and a confirmation modal will appear

Confirm to complete stakeholder creation


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

Payment Status Updates

What’s New

The Payment Status Updates on the Exercising workflow provides users a more accurate reflection of the status of their exercise during the money movement step of the exercise. Error messaging will now provide a single failure message clarifying what caused their exercise to become stuck during the money movement step of the exercise including errors around cancelation requests, bank account removal, and insufficient funds in the bank account.

Who this affects

All users exercising for private companies on Carta.

How it works

Today, users can view the status of their exercises in progress on the Holdings page and with the new Payment Status Update feature, these exercises will now display an ‘Error’ bubble beside the active step when the exercise gets stuck. Clicking the ‘View details’ button will navigate the user to the Exercise tab on the Option grant modal with user instructions to help resolve their stuck exercise. 

On the Exercise tab, error messaging will provide user action to contact their company admin through the Option grant modal’s Report Issue tab, to contact Carta Support through the chat, or update their bank account information on the Payment Information page. 


83(b) Automated Submission

What’s New

Users that choose to early-exercise will now be able to submit an 83(b) form automatically to the IRS while exercising. Furthermore, users can now update their SSN, digitally sign the 83(b) form, and review personal information during the exercise request. In addition, users now have an improved UI to access the PDF and tracking number of their 83(b) form on the 83(b) Elections tab on the Option Grant modal.

Who this affects

Any US-based users with early exercisable option grants, and ACH eligible who choose to early-exercise through Carta. 

How it works

83(b) Automated Submission Option During Exercise Request

The 83(b) Automated Submission option will be available during an exercise submission. Users will be able to choose between performing an Automated 83(b) Submission or a Manual 83(b) submission (if the user selects to submit their 83(b) form manually, they still have the option to utilize the automated submission feature through the Option grant modal as long as the current date has not exceeded 25 days from the exercise date).  







Figure 1: On the Review Tax page, users now are given the option to automatically submit an 83(b) form or manually submit the form; If the user chooses to submit the automated 83(b) form, they can add/update their SSN directly






Figure 2: Updated Sign and Submit modal which includes an Automated 83(b) Submission Agreement section signed via digital signature.


Figure 3: Updated Congratulations page stating that the 83(b) form is being sent to the IRS. 



Figure 4: 83(b) elections tab on the Option Grant modal to view the USPS tracking number and the submitted 83(b) form.  


Included Personal Information

To submit an automated 83(b) submission, a Social Security Number (SSN) is required by the IRS to properly verify the identity of the user. If the user’s SSN isn’t filled in the Account settings, users have the ability to add and confirm their SSN when selecting their submission method. Otherwise, when users navigate to the Review Exercise page, the automated submission will pull the user’s Name, SSN, and Address directly from the Account settings.


Digital Signature

On the Sign and Submit modal (Figure 2), users agree to automatically submit the 83(b) form by signing the agreement via digital signature. The digital signature is added directly into the PDF of the 83(b) form.

Status of submission 

The 83(b) form PDF and Tracking number will be provided and displayed in the Option grant modal on the 83(b) Elections tab. The user will be able to track and check the status of their 83(b) Automated Submission.

83(b) Manual Submissions

Manual 83(b) Submissions UI has been improved on the 83(b) Elections tab providing users with an 83(b) form to print and sign which is to be mailed manually by the user. To complete their manual submission, users will be required to upload their signed copy of the form in addition to the date that the 83(b) form was sent to the IRS on Carta. Further, users may choose to submit an automated submission on the 83(b) Elections tab.



FAQ

1. Can I still use the previous workflow for 83(b) Submission?

Yes! If you would prefer to file your 83(b) form manually, you still have the ability to do so! During the exercise workflow, you may select “Submit an 83(b) form later” as your submission method, and you’ll have the option to download and print an 83(b) form from the 83(b) Elections tab on the Option grant modal.


2. What happens if my exercise gets stuck or canceled?

If you select automated submission of your 83(b) election, it will be initiated immediately after you finish submitting your exercise.  If your exercise gets canceled, you should consult with your legal and tax advisors on what to do with your filed 83(b) election form.

3. How will I know that the IRS has received my automated submission? Will I be able to closely follow the progress of the 83(b) submission?

You can navigate to the 83(b) elections tab on the Option grant modal to verify the status of the 83(b) form using the tracking number provided by USPS to follow the progression of your 83(b) submission. Status updates are available as soon as the package is delivered to the USPS.

We highly recommend printing and storing the online USPS confirmation as this information is only available for a limited amount of time. 



Additional Resources

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.




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.


Cashless Exercising on Mobile

Carta users will now be able to perform a Cashless Hold Exercise and Cashless Sell Exercise on the mobile app. 

Who this affects

  • Public Markets Users

Supported Platforms

  • iOS and Android

What’s new

Users with holdings in public companies on Carta will now be able to exercise and sell their shares via a Cashless Hold or Cashless Sell transaction while on-the-go through the Carta mobile app. These features were previously available to users via desktop, and this launch closes the previously existing gap in functionality between the Carta web experience and the Carta mobile app. 


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