In-app Management Fee Approval

Approve Management Fees in App

What's new?

You can now review and approve management fees directly from your Carta account. When it’s time to review your management fees for a select period, you will receive an email with a link, as well as a task in Carta, that will take you right to the calculations for review.


What’s important or valuable about this change?

The new feature will make it easier for you to review and approve management fees without having to email your Fund Administrator.

What do I need to do?

a) Select "Review and approve management fees" from the email sent to you by Carta (you will receive this email before the start of every quarter - contact your Fund Admin if you have any questions or concerns.




b) Or go to “Notifications” on the sidebar, under the fund you’d like to review management fees for, and click on the task that says "Review Management Fees".

 

Select Continue to progress through the workflow.

Review your quarterly management fees, and select the expand button on the table to see a breakdown of fees across investors, as well as which investors are new or have side letters.

 

If your fund admin sent a separate file with the fee schedule, you will see a link to the document that will open in a new tab

a) If the fees and the fee breakdown look correct, select "Approve Fees".

b) If the fees and/or the fee breakdown look incorrect, select “Request Changes”, specify the changes you’d like to request, and upload a supplementary document, if necessary, before submitting. 

 

If you choose to approve fees, select which transfer option best suits you

Once submitted, you will see a confirmation

 

If you have any additional questions, please contact your fund administrator or account manager. 



Introducing Luxembourg SPVs

What's new?
You can now fund the next global deal from anywhere in the world. 

We are introducing Luxembourg SPVs by Vauban from Carta—the easiest and most cost-effective way to launch an SPV in Europe. Following the release the first fully digital Luxembourg venture fund product, we’ve expanded our offering to service SPVs.

Our end-to-end platform handles everything from SPV formation and banking to LP onboarding and administration.

How it works?

Login to the Vauban Platform to your universe to create a new deal.

Click on + New Deal in the top right-hand corner. 

Step 2: 

Choose Luxembourg as your SPV Jurisdiction!

Step 3:

Set up your SPVs by providing the necessary information. We take care of the legal generation, banking, investor onboarding, and closing.


Raise internationally
Luxembourg SPVs are built for international investors. Fund global deals and onboard LPs across 72 countries and 135 currencies.

Reduce costs
Luxembourg is home to venture capital and private equity in Europe, but the costs of setting up an SPV can be as high as $300,000. With Vauban from Carta, you can spin up an SPV for a fraction of the cost.

Save time
Our end-to-end platform allows you to skip the time-consuming regulatory and legal demands of raising in Europe. This will enable you to focus on finding unicorns and building your investor base.

What do I need to do?

To learn more about Luxembourg SPVs, click here.

If you’re interested in setting up a Luxembourg SPV, please reach out to hello@vauban.io


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.
 

Revenue Procedure 2002-50 (Company Tax and Compliance)

What's new?

Carta has made it easier for private companies running a tender offer to invoke IRS Revenue Procedure 2002-50, which is applicable to certain transactions involving the exercise of options and sale of the resulting securities during a transaction on the same day. This procedure allows for the exclusion of those same day option sales from Form 1099-B reporting if certain conditions are met. For example, this may apply to cashless exercised options in connection with a secondary transaction on Carta where there is no capital gain (Sale Price = Fair Market Value).

How does it work?

To make a Revenue Procedure 2002-50 election on an applicable transaction, company administrators may request an Officer Certificate template from Carta to complete and get signed by a Company Officer who has the authority to make decisions on the tax treatment of cashless exercises in a tender offer.

Fig 1: Sample of an Officer Certificate

The completed form can then be returned to Carta, who will then trigger the Revenue Procedure. 

Any employee whose transactions on Carta were excluded from 1099-B reporting as a result of Revenue Procedure 2002-50 will, if applicable, receive a supplemental Disclosure Statement detailing the fees and gross proceeds on cashless exercises of options so they can complete their Form 8949 reporting. Compensatory income from cashless exercises is reported as ordinary income on the W-2.  

This statement will be delivered electronically by February 15th of the following year in the same manner as all other tax documents on Carta. No such statement will be generated if the employee was not charged any fees by Carta.

Fig 2: Sample of IRS Revenue Procedure 2002-50 Disclosure Statement

The company administrator can also generate a new report of all the Disclosure Statements issued after the transaction. The Revenue Procedure Disclosure Statements Report will assist in auditing transactions ahead of the tax season to ensure completeness and accuracy for tax filing purposes. The report can be found under your Reports section in Carta.   

Fig 3: Sample of Disclosure Statements Report

Make tax reporting easier for same-day option exercises and sales during a tender offer by invoking Revenue Procedure 2002-50

The Revenue Procedure feature will:

  • Remove an employee’s burden to reconcile their Form 1099-B and Form W-2 when determining their Taxable Income after a same day option exercise and sale
  • Reduce the risk of paying capital gains tax on proceeds that were already taxed as ordinary income

Reach out to Carta to get the process started

Is your company running a tender offer? If so, the Revenue Procedure 2002-50 will be enabled on the platform after returning a completed and signed Officer Certificate to Carta. Companies who ran a tender offer previously in 2022 can retroactively upload the appropriate Officer Certificate to benefit from this feature until the end of 2022. Please contact your CSM or Liquidity representative for more information.


Updated Form 3921 Dashboard with Consolidated 3921 Statements (Company Tax & Compliance)

What's new?

After reviewing customer feedback, Carta made several user experience enhancements in the Form 3921 dashboard.

Carta now aggregates individual Form 3921’s for ISO exercises into consolidated statements for ease of use. Individual Copy B’s are still available to download if required. These statements will be available in participant portfolios when companies generate their 3921’s. 

The enhanced user experience also allows company stock administrators to download the Manage Stakeholder Details report to review all stakeholder records at once instead of in a paginated view within the Administrator Experience. Companies with 50+ stakeholders now have enhanced filter and sorting capabilities (e.g, select one or multiple years to download the Stakeholder details ledger) to better analyze historical data.

There is a new tab for “Exclude Transactions” for further flexibility if company administrators need to suppress reporting on individual option exercises. 

How does it work?

The new Form 3921 Dashboard is available now to all companies subscribed to this feature.

Reach out to Carta to get the process started

Reach out to your CSM to enable Form 3921 reporting if you are interested in upgrading your subscription. Public Market companies will have this enabled by default.


 

Valuation Updates for SAFEs and Convertible Notes In-App

What's new?

Valuation Updates: Easily mark up or down SAFEs or convertible notes!

What’s important or valuable about this change? 

We've expanded the capabilities of our valuation update flows to enable clients, where appropriate, to mark up or down SAFEs or convertible notes. We created an addition to the flow which highlights audit and other considerations clients should have when marking up or down convertible assets, and given them the ability to complete this when applicable for their use case.

What do I need to do?

Check out a step by step guide on updating your valuations in-app here.

Here is a summary of how it works: 

  1. Login to Carta, navigate to investments, and click “Update Valuation”
  2. Add a new share price or holding value (the full value of your investment in the asset) for each investment you want to mark up/down
    1. Optional: submit any supporting documents like cap tables/purchase agreements
  3. Carta will check your input for accuracy and automatically post successful changes to your SOI, IRR, and financials. Otherwise, we will review the update first and reach out as needed.

As a reminder, here is a walkthrough of in-app valuation updates:

  1. Log into Carta and navigate to the fund with the investment that you want to update. 
  2. Go to the Investments tab on the top navigation bar and select the Update Valuation option in the top right side of the page. 
  3. Select the portfolio company (or companies) for which you want to update the asset values.

Note: Convertible assets are not able to be selected for marking up or down. For common questions about types of valuation updates, see this FAQ in the Valuations 101 support article, highlighted below,

  1. For each investment, specify the new price per share. For assets without shares, specify the new total holding value. You can observe the change in gain or loss based on the new value. 
    1. Value per share vs total holdings value: Assets that have shares can be marked up or down by share price, or by total value of the asset. These include preferred and common equity.
      Assets that do not have shares and change in value can be marked up by total holdings value. These include Partnership interest and membership interest. Reach out to your fund administrator if you have a specialty asset type and need assistance.
    2. Document support: Supporting documentation is strongly encouraged, but may be added later by emailing your fund administrator. Stock Purchase Agreement is preferred, however any documentation from the company that indicates the new value/value per share and is credible should be included otherwise for your FA to review. For unaudited funds, a screenshot of an email from the founder, for example, can also be provided for review, in absence of other documentation.
  2. Next, confirm which funds you want to apply this valuation update to. All funds in your firm that hold the portfolio company will be listed. In most cases, all funds should be selected. 
  3. You will repeat steps 4 and 5 for each portfolio investment you selected to update. 
  4. On the final review screen, confirm all the updates you made for each investment. Click Back to revise, or Submit if everything looks correct.
  5. After submitting, Carta will automatically check that the update is within reasonable range. If it passes, the changes will show immediately on the investment tab. If further review is required, a task will be generated for your fund administration team. If they need more information, they will reach out directly within 3-4 business days.  

Additional Resources:

FAQs for Updating Valuations


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

Cash Balances in App

Whats new?

Plaid, SVB, FRB, & Brex Cash Balances are now available in app!

We are now pulling in daily cash balances for Direct Connect (SVB, FRB), Brex, and Plaid users!

Who this affects

All customers that have relationships with Plaid, SVB, FRB, and Brex.

What's important about this change?

Cash balances help our clients answer critical questions like “Do I have enough cash on hand to invest $1M into Solana today?”

They will also be used across our application to power health checks and workflows. In the near term, we’re working on automating invoice collection and creating treasury tickets. Using cash balance, we can get ahead of problems where the fund might be unaware they don’t have enough cash on hand to pay the expense.

What do I need to do?

Ready to check your cash balances in app? It is automatically updated in your General Ledger

 

 


Mass Issuance Report

What's new?

Upon going public, issuers must communicate the share positions held on their former cap table to their new public Transfer Agent. Carta’s Mass Issuance report captures key information that Transfer Agents in order to validate and reflect public share ownership following an IPO. 

The Mass Issuance report aggregates pertinent cap table and tax-related (e.g, cost basis) information, typically found in multiple reports, into one export file containing information required by the Transfer Agent. Now issuers can easily export ownership information for communication to their Transfer Agent in one step.  

The Mass Issuance report includes additional information on the Issuer's stock program shares to make it easier for the Issuer to move the eligible portion of its stock ledger back to an equity management provider - such as Carta - from the Transfer Agent. This helps preserve critical tax information while facilitating the delivery of public shares to the stakeholder's Carta portfolio for trading.

How does it work?

Experience a secure and smooth data transition as you move your private equity records to a public Transfer Agent. 

The Mass Issuance report:

  • allows for the easy communication of ownership data to a public Transfer Agent in one file ahead of an IPO, SPAC or direct listing; and
  • includes additional fields needed for when you permission your Transfer Agent to send your public stock ledger to a public equity management provider of choice - such as Carta.

Reach out to Carta to get the process started

Are you preparing to go public? Reach out to Carta’s public markets team (carta.public@carta.com) to begin planning your IPO journey.

The Mass Issuance report can be found under your Reports section in Carta.   

Early Lockup Release Feature (Public Markets)

What's new?

Customers wishing to allow their shareholders to sell a portion of their holdings prior to a traditional 180-day lockup expiration can now control early lockup release programs through Carta. With Carta’s early lockup release functionality, your company can specify the quantity of shares each shareholder can sell during a specified period. 

Carta’s Public Market Equity Management Services team will work with companies to determine: 

  1. shareholder eligibility for the early lock-up release period
  2. the start and end date of the liquidity period
  3. how many shares each individual may sell during the period

After gathering this information, Carta will then work with the customer to complete an import template, which will be uploaded to Carta's public platform. Eligible shareholders will now be able to see the quantity of shares they can trade, what they’ve already traded, and what portion of shares is still remaining. 

Allow your employees to begin trading company shares Day 1 post-IPO

The early lockup release feature:

  • allows your employees to sell prior to the standard 180-day lockup period while enforcing the terms of your company’s early lockup release program; and
  • makes it easy to instruct participation eligibility and quantity limits for all shareholders.

Figure 1: Shareholders can monitor the number of shares they can sell during the early lockup release.

Figure 2: Shareholders are limited to the quantity of shares that they are allowed to sell per the rules of the early lockup release. Quantities can be set specific to an individual.

Trade limits apply across asset types. The sale of long stock, in addition to cashless option transactions, will count against the shareholder’s total allowed quantity to trade, ensuring that the stakeholder won’t oversell per the terms of the early lockup release.

Reach out to Carta to get the process started

Reach out to Carta’s Public Markets team (carta.public@carta.com) to begin customizing an early lockup release benefit for your employees ahead of an exit.

Show Previous EntriesShow Previous Entries