What's new?

Companies now can decide how they want their shares to be reallocated within the vesting schedules when stock splits are performed. Two vesting strategies can be selected now:

Option 1: Reapply templates

When companies choose the reapply templates option, Carta will automatically reapply the template for all securities with template vesting schedules upon performing the split. This means that Carta will re-calculate the vesting schedules attached to securities, considering the new total quantity. This can change how the vesting is distributed among the tranches since it will be an entirely new vesting schedule.

For example, a 10 shares grant that time vests with tranches of 2 and 3 shares will, after a 1:10 split, have tranches of 25 shares each if the company chooses this option.

Option 2: Apply stock split ratio to all tranches 

When companies choose to apply the stock split ratio to all tranches, Carta will multiply the stock split ratio by each tranche. In case the shares remaining in a tranche are fractional, the platform will then round down to the nearest integer. This results in fewer differences in the schedule from the pre-split to the post-split security. If a security is tied to a template vesting schedule, Carta will need to update it to a custom schedule to make this change. Custom vesting schedules cannot be reapplied later, as they are not part of any templates.

If companies choose this option, a 10 shares grant that time vests with tranches of 2 and 3 shares, after a 1:10 split, will have tranches of 20 and 30 shares each if this option is chosen.

Why is this important?

Different companies need their post-split vesting schedules to be represented differently. With this change, Carta becomes more flexible to adjust to different vesting scenarios. Having more vesting accommodation strategies also means less time dedicated to manual adjustments after a stock split is performed.

How can I learn more about this?

You can find a detailed explanation of the new vesting strategies with vesting schedule examples in this support article.

What’s new?

Private companies on Carta can now run Dilution reports. The Dilution report will include: 

• Incremental Shares
• Weighted Average Shares Outstanding
• Average Trading Prices

All 3 of these values will help customers calculate Diluted Earnings Per Share for their income statement. 

What’s important or valuable about this change?

Private company Financial Reporting administrators will be able to run a Dilution Report that will provide them with major inputs into the Diluted Earnings Per Share formula. 

In this release, the following will be available:

• Shares outstanding

  • Simple average
  • Weighted average

• Trading prices

  • Simple average
  • Weighted average
• Incremental Shares
• Supporting tabs to help auditors tie out values

What do I need to do?

Log in to Carta and go to Compliance > Financial Reporting. Run a new report (must be 1 year or less reporting period). In the drop down menu to download other reports, such as SBC Expense and Min Disclosure, there will be an option for Dilution. 

Have questions? Contact 718@carta.com 

What’s new?

Soon, you will be able to access 8 new reporting templates under Capitalization > Reporting, which provide you with access to critical data points about your equity pool, company, securities, and stakeholders. You will be able to see exactly how your key option pool values are derived, view equity awards joined with Grant Reason and Employee ID, and even export a detailed list of stakeholders and their properties.

Why is this important?

We’ve been listening to every piece of feedback from you, and have heard the challenges that you face. The new reports address these challenges, providing visibility into how key pool values are derived, and giving you reporting access to over 60 key fields that were spread across multiple places, and in some cases, previously un-reportable.

Those 8 template reports are:

• Equity pool transaction ledger: A detailed view of shares available to issue from your equity pool. This new report includes a double-entry activity log for every transaction so you can see, line-by-line, exactly how available shares and other plan values  were derived.
• Common securities ledger: A ledger of all Common shares in Carta.
• Equity awards outstanding: A detailed view of all outstanding equity awards across all plans on Carta. 
• Equity plan granted: A ledger of all securities granted from the equity plan. 
• Options outstanding: A detailed view of all outstanding options across all plans on Carta. 
• Securities ledger: A ledger of all securities tracked on Carta. 
• Share registry:  Used by companies in many countries to create a share/equity register or register of holders.
• Stakeholder details: Full list of stakeholders and their properties.

What do I need to do?

You should be on the lookout for an email from your CSM letting you know that these reports are now available for you. Once you get that email, you can go to Capitalization > Reporting, and you will see the following view, where the newly added reports will have a ‘New’ bubble next to them:

From there, you just need to export the report as usual!

Where can I learn more?

For more information on exporting reports, visit our support site. We will be adding additional information to the support site as reports are updated and improved.

What’s new?

With Carta's new Deal pro forma tool you can generate an accurate deal-ready pro forma model with iterative calculations in just a few minutes. Users will be able to create a deal-ready pro forma that takes into account all the nuances of the model and handles the complicated conversion math for SAFEs and Notes. 

What's important or valuable about this?

Carta automates the process of building a pro forma so that it can be completed on the Carta platform within minutes. Carta Deal Proforma eliminates unnecessary iterative and redundant work. With the new tool you can increase the capacity for companies to be more versatile with their modeling as it’s easy to make incremental changes instead of starting from scratch. Starting today you can:

• Build a deal pro forma in a few minutes instead of hours and view results instantly
• Share or view on Carta or exported as an excel file.
• Use your latest cap table information for real-time changes to your pro forma.

What do I need to do?

Carta Deal Pro Forma will be available to all Carta customers in their Scenario Modeling tab.

How does it work?

Under Fundraising > Scenario Modeling > Pro forma tab,  you can see create a pro forma and generate a full view of your next round and export a deal-ready pro forma cap table. 

You can:

• Add new round terms
• Add new money investors for this round, including consideration for investors with pro rate. 
• Add convertibles converting in this new round or uncheck convertibles to be excluded from this pro forma.
• Define the share classes for the financing
• Include Investor Pro Rata Rights, including investors with convertible Pro Rata Rights
• Add advanced terms such as conversion methods, anticipated option pool increase, specification of authorized shares and common stock buffers
• View and share in app or export to excel

Have a question or feedback? Visit our support site.

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What’s new? 

This release improves the workflow for matching employees with stakeholders on Carta. Employees with the same name and email as the stakeholder will automatically match, saving their employee ID and thereby linking the stakeholder with the employee record. The improved workflow guides you through reviewing all other employee matches. 

How does it work? 

For the reviewed matches, you can now ignore, to be reminded next time, or to choose a different stakeholder. These decisions will be saved and will not need to be rematched when running the employee matching workflow. You can now review all matches and update the decisions later. 

What do I need to do? 

To get started, you will need to connect your external data to Carta either through connecting your HRIS system, uploading a spreadsheet, or pasting the information into Carta directly.

With your external data connected, Carta will attempt to automatically match your employees. From there you review suggested matches, deciding to approve the suggestion, ignore it, remind me later, or manually choosing a different person.

If there are any employees from external data that don’t match at all to Carta stakeholders, you can choose to ignore them or manually choose a person to match.

The workflow is then completed and all matches can be reviewed.

How do I learn more?

For more information on Employee Matching, please read our support article.

What’s new?

The Share Class Manager page will be updated this coming Monday, February 6th to make it easier to navigate, and provide a consistent experience when you are updating AOI terms.

We no longer display a "Link AOI" button at the top of the page. The new flow is designed to be simple and intuitive, with the "Manage Share Class" button giving you access to update existing share classes, add new share classes, and link Articles of Incorporation.

What do I need to do?

Navigate to Capitalization > Manage share classes. Under Manage share classes, there will be three options:

• Create new share class
• Edit existing share classes
• Add historical AOIs

Where can I learn more?

Visit the Share Class Manager support article or contact us via the In-App Help Center.

What's new?

Private dilution reports can be run on Carta.

How does it work?

Private company administrators will be able to run a dilution report that will provide them with diluted shares, average trading prices, and supporting tabs to back out the incremental shares tab. 

In this initial release, the following inputs will be available:

1. Average and weighted average trading prices, including the ability to add Fair Market Values on weekends and holidays
2. Diluted shares
3. Supporting tabs to help users recalculate their incremental shares tab

In the future, Carta will also support:

• Pre stock split values in dilution reports
• Weighted average shares outstanding (WASO)

What do I need to do to get started?

To participate in the beta and receive early access to this report, please reach out to us at 718@carta.com.

What's new?

We are introducing automated refresh vesting schedules in-app. Now, all private companies have a template ready for refresh vesting, a schedule that mimics Carta's equity strategy of boxcar grants. 

How does it work?

On the vesting schedule templates page (Securities > Templates > Vesting Schedules), you can edit the Refresh Vesting to select when grants under this schedule should start vesting. See detailed instructions to manage vesting templates here.

You will have options from 1 to 4 years after the issue date.

You are all set! 

Now, you can start adding, modifying or applying the Refresh Vesting when issuing new securities, and we will automatically calculate and input the vesting start date for you, based on the criteria selected on the template.

Where can I learn more?

Visit this support article or contact us via the In-App Help Center.

What's new?

Share Class Conversions are now self-serve on Carta.

What’s important about this change?

Skip contacting Support for share class conversions. With our new self-service tool, your law firm will be able to complete this for you in minutes.

Select individual shares, or convert entire share classes when needed. Once the shares classes are converted, Carta handles canceling the existing certificates, issuing new stock certificates, and guiding signatories and security holders through the process of executing signatures. 

What do I need to do?

This feature is currently in beta with law firms and we are releasing it to more users on a rolling basis. By April 2023, all company legal admins will have access to in-app share class conversions too.

If you need to perform a share class conversion, reach out to your outside counsel. If you don’t have a law firm, contact Carta Support using the In-App Help Center.

How do I learn more or get help?

Visit this support article to learn more about the step-by-step process. 

What's new?

Carta now helps private company administrators coordinate the settlement of Restricted Stock Units (RSUs). The end-to-end offering allows an Issuer to:

• configure and schedule a RSU Settlement;
• provide RSU holders with an election period to identify how they want to pay the tax withholding obligation associated with the upcoming settlement;
• collect any cash payments from RSU holders; and
• automatically update the cap table at settlement.

During the election period, RSU holders are invited to access a workflow to view their vested RSUs along with the tax withholding amounts due at settlement. They have the flexibility to meet their tax obligation by electing to net-settle, pay the full amount in cash, or use a combination of surrendered shares and cash. 

This offering helps facilitate the RSU settlement process from setup to share delivery for private Issuers that award RSUs under their equity compensation plans.

How does it work?

Issuers

Private company administrators can go through a four-step process to configure an upcoming RSU Settlement with Carta Liquidity. Issuers can:

• set the parameters of the settlement (e.g., FMV, election timing, settlement date); 
• view and confirm the RSUs that will be included based on the vesting end date (i.e., record date); and 
• view and confirm tax withholding amounts associated with the settlement. 

Issuers can set rates to use when calculating tax withholdings owed based on each RSU holder’s tax jurisdiction(s). Carta Liquidity’s integration with Carta’s equity management platform and tax engine eliminates the need for the administrator to pull and sort cap table information manually or calculate tax withholdings for each RSU holder. Alternatively, Issuer’s can provide tax withholding amounts calculated by their HRIS provider for use in the settlement.

RSU holders

When the administrators invite RSU holders to submit their elections, RSU holders will be able to view which of their RSUs will be settled and the tax withholding amount due per security. In addition, individuals will identify how they would like to satisfy the tax withholding amount owed through a self-service election workflow. 

The three tax withholding payment options include:  

• Share withholding (i.e., net settlement) - The entire tax withholding amount is paid by surrendering a portion of shares from the vested RSUs released for settlement. The net amount of shares after withholding will be delivered to a RSU holder at settlement. This is the default option.
• Cash payment - The entire tax withholding amount is paid by a RSU holder in cash (only USD is accepted). RSU holders are required to fund their brokerage account in order to make this election.
• Share and cash payment - Each RSU holder identifies the mix of cash and shares that will be used to pay the taxes due at settlement, providing them more flexibility. RSU holders are required to fund their brokerage account in order to make this election.

For any cash elections, RSU holders are instructed to transfer the necessary cash to their Carta Liquidity brokerage account*. RSU holders are able to modify their election until the end of the election period. 

At settlement, Carta Liquidity’s integration with Carta’s equity management platform automatically updates an Issuer’s cap table to reflect the shares of stock delivered to RSU holders, and any cash payments received to cover applicable tax obligations will be transferred automatically to the Issuer’s brokerage account. RSU holders will then receive their resulting equity from the Issuer in their Carta accounts. In addition, Carta Liquidity will provide a record of the RSU settlement to both the Issuer and RSU holders. 

Run regular RSU settlement processes with automatic cap table updates and tax withholding calculations, saving your team time and resources 

The RSU Settlement offering will:

• Reduce the manual administrative work required to set up a regular cadence of RSU settlement through equity management and tax engine integrations
• Provide RSU holders flexibility to choose how they would like to meet their tax withholding obligations through a self-service election workflow
• Provide optionality to RSU holders to pay out of pocket for the amount they feel comfortable paying.

Start managing RSU Settlements on Carta!

Reach out to company_coverage@cartacapitalmarkets.com to speak with your relationship manager to turn on this feature. 

*Note: Brokerage accounts and other brokerage services are offered through Carta Capital Markets, LLC (Member: FINRA/SIPC)