Instant KYC for Non-Individual LPs Completing Subscription Documents

Non-individual Limited Partners who complete subscription documents on Carta can now be KYC’ed instantly.

What’s New

This release is a follow-up to our KYC for Individual LPs feature. If your fund leverages Carta’s KYC/AML service and you have non-individual Limited Partners (LPs) completing subscription documents in Carta, these LPs can now be instantly KYC’ed on the platform. Carta instantly KYCs the LP's control person and beneficial owner(s) in addition to the LP entity itself.

Carta’s instant KYC feature is made possible by Carta integrations with identity and verification databases like LexisNexis, Ekata, Socure, and more.


Limitations

  • For this release, only US-based LPs are supported for instant KYC. Future releases will extend support to non-US LPs


How it Works

  1. As an LP completes their subscription documents, non-individual LPs (for funds that avail of Carta’s KYC/AML service) will see a dedicated Know Your Customer section. Upon landing here, LPs will first be asked if their control person and beneficial owner(s) are all US persons - 





  2. If the control person and beneficial owner(s) are all US persons, then the LP will be shown forms to enter KYC information for these individual(s) -






  3. Finally, the LP is also able to upload any entity formation documents and photo IDs here:



  4. Once subscription documents are signed by the LP, the following are instantly KYC'ed: the LP entity, control person, and beneficial owner(s). If all pass KYC, this is immediately reflected in the Carta UI and General Partners are notified to countersign -


    Timing: Rolled out to all on Aug 31, 2021

    Audience: US-based Limited Partners, General Partners


Instant KYC for LPs Completing Subscription Documents

Limited Partners completing subscription documents on Carta can now be KYC’ed instantly.


What’s New

If your fund leverages Carta’s KYC/AML service and you have Limited Partners (LPs) completing subscription documents in Carta, these LPs are now instantly KYC’ed on the platform. 

Carta’s new instant KYC feature is made possible by Carta integrations with identity and verification databases like LexisNexis, Ekata, Socure, and more.


Limitations

  • For this first release, only individual (as opposed to entity) LPs are KYC’ed. Future releases will support KYC for entity (non-individual) LPs as well. This includes KYC for the LP entity, LP control person, and LP beneficial owners
  • For this first release, only US-based LPs are supported. Future releases will extend support to non-US LPs


How it Works

  1. As an LP completes their subscription documents, individual LPs (for funds that avail of Carta’s KYC/AML service), will now see a dedicated Know Your Customer section. Here, LPs can input the additionally required information for KYC -


  2. Once subscription documents are signed by the LP, the LP is instantly KYC’ed. If the LP passes KYC, this is immediately reflected in Carta and General Partners are notified to countersign -


    Timing: Rolled out to Limited Partners on July 1, 2021


    Audience: Limited Partners, General Partners

Improvements to our login screen

What’s coming: We've made a few changes to our login screen to help users get access to their Carta account. We want to make sure your first interaction with Carta is clear, simple, and secure.

Who this affects: 

What’s new:

  • Added a new link to help troubleshoot log in issues and contact support.
  • Updated the show password toggle to an icon to simplify the page layout. This is consistent with our designs also on our registration page.


New log in page

Previous log in page


PWERM Valuations, In-app

We’ve released a new feature that helps our staff value late stage private companies. The feature allows staff to conduct a “PWERM” valuation in-app, eliminating the need for them to rely on excel spreadsheets and saving them time on your 409A or ASC 820 valuation.

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PWERM stands for Probability Weighted Expected Return Method. This methodology is often relied upon in the valuation community when there is a possibility of several future outcomes for the Company being valued. For example, Airbnb has said its resuming plans to IPO. However, real world events could come up, such as a global pandemic, that could stall these plans. Due to this uncertainty, a PWERM valuation methodology could better simulate real world outcomes where companies could either continue business as usual or could reach an exit event.

Updated Email Design - Coming in One Week

An email from Carta is often the first interaction we have with our users—and we aim to make this first impression a great one. That doesn’t mean we need to be splashy. Rather, it means we want to provide clear information to our users that helps them understand what Carta is and how we can help them manage their assets and equity. For users who’ve been with us a while, we hope these emails continue to reflect the high quality or our software and services.

Carta last updated its emails in November 2017. We’ve changed a lot since then, and we’ve learned a lot, too. In one week, we will release a revamped version of our emails that we hope solve some problems that our users and data helped us identify as well as better reflect our brand today. Today, we’re giving you a preview of what those changes will look like:

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We’ve said hello to many employees, companies, investors, board members, law firms, and others around the world the past few years. We think these emails will help us say hello even better going forward.

CCL Compliance Certificates

CCL borrowers and Fund Admin can now submit compliance certificates in-app.

On a quarterly and annual basis, CCL borrowers must certify that they are in compliance with all required covenants in their Loan & Security Agreement by submitting a compliance certificate.

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A Fund Admin (Operator) can complete the certificate and submit to the Borrower (Signer) for signature. A Borrower can either sign these submitted forms or fill one out, sign, and submit directly. Both an Operator and a Signer can retract unsigned compliance certificates (e.g. certificate was filled out in error or is no longer applicable).

SBA Paycheck Protection Program - Applicant ownership detail report (Beta)

In this difficult time for many private companies, our team has been monitoring the public policy closely and thinking through ways in which Carta can help our customers.

Today we launched the SBA Paycheck Protection Program - Applicant ownership detail report in Beta. The report allows company admins to download all the information they need to populate the Applicant Ownership section in the SBA Borrower application form. You can download the report under the capitalization section of your reports page.

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We hope this helps you easily get the data you need from Carta to apply for the Paycheck Protection loans and create more owners!

Technical improvements to navigation

The Design Technology team at Carta is updating the top level navigation of our app, to benefit from the latest Ink Design System improvements.

With this architectural change, user experience will be more consistent, future design improvements will be easier, and we will be able to better support our future product roadmap.

There will be minor changes to visuals and interaction. On the visual side, the text is now bolder and more legible. On the interaction side, menu items will now open on click, instead of on hover.

Note: there is no change to menu items or to the way you get to different corners of the app. This update is unrelated to the navigational structure of our site.

For feedback, please reach out to design-technology@carta.com.

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New and Improved Exercising Flow

We’re excited to announce our enhanced exercising flow coming early next week!

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The updated in-product experience aims to help employees feel more confident throughout the process and reduce the finance and HR team’s burden of managing (and answering questions about) option exercises.

To begin, your company must have online transactions turned on in Carta. Once they do, all you need is:

  • A US bank account
  • ISO, NSO, or ISO/NSO split grants that are vested

As part of the update, we’ve added an Exercise button directly on the Holdings page, under the new vesting chart. Click on the button to begin.

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Once you’re ready, Carta will guide you through a step-by-step process that includes:

  • The ability to select which grant and how many shares to exercise
  • Estimated tax breakdowns to help you understand your obligations at the time of exercise and the end of the fiscal year
  • In-flow profile and payment management to streamline the exercising experience without friction
  • Autofilled 83(b) election form for employees who early exercise
  • A clear timeline of next steps you should look out for before the shares are in your portfolio

Have more questions about your equity? Click here to learn more >

New valuation methodology for ASC820 customers

We’ve released a new valuation methodology to help Investors determine the fair value of their holdings. Investors can now apply an equity adjustment to the post-money valuation. Equity adjustments are generally applied to backsolve or post-money valuations when the last preferred financing round was greater than 6 months ago and there is reason to believe that the market has changed since the last financing was raised, or when the portfolio company does not have sufficient revenue to support a meaningful indication of value.

To use the post-money equity adjustment methodology to value a portfolio company, follow these steps:

  1. Navigate to the portfolio company’s valuation page.
  2. Create a new valuation.
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  3. Add your public comparable companies. These will be used to estimate the equity adjustment.
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  4. Navigate to the Value company page and select the post-money valuation methodology. Indicate the weighting you would like applied and save!
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  5. Once saved, you will see a new page where you can record the post-money valuation, apply the equity adjustment, and include an explanation as to why you are applying the equity adjustment.
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