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
The new Form 3921 Dashboard is available now to all companies subscribed to this feature.
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:
As a reminder, here is a walkthrough of in-app valuation updates:
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,
Companies using our newest version of the financial reporting tool can now report stock based compensation expense following International Financial Reporting Standards (IFRS).
This release of our IFRS reporting includes:
1. Tranche based valuations
2. FIN28 amortization
3. Correct relationship valuation methodology (differs from US GAAP)
4. Stakeholder country field added to reports
6. Stock-based compensation expense journal entry
7. Report error validations specific to IFRS reporting
Later releases will include:
1. In-app custom assumption overrides
2. Forfeiture rate by grouping
When going to create a new expense scenario, there is now an additional step where users can select which reporting standard they want that scenario to follow. Users have the ability to create multiple scenarios to support both IFRS and US GAAP.
Once the scenario is created users can create both SBC expense reports and disclosure reports that follow the standard and give supporting calculations.
Private and public companies using our newest financial reporting tool.
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.
Carta Closings guides LPs through the subscription process and ensures that all LPs, from first-time investors to experienced institutions, have a smooth experience.
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.
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.
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.
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!
All customers that have relationships with Plaid, SVB, FRB, and Brex.
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.
Ready to check your cash balances in app? It is automatically updated in your General Ledger
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.
All users exercising for private companies on Carta.
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.
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 the key information that Transfer Agents need to 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 company’s stock program shares to make it easier for the company to move the eligible portion of their 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.
Experience a secure and smooth data transition as you move your private equity records to a public Transfer Agent.
The Mass Issuance report:
Are you preparing to go public? Reach out to Carta’s public markets team (email@example.com) to begin planning your IPO journey.
The Mass Issuance report can be found under your Reports section in Carta.
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:
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.
The early lockup release feature:
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’s Public Markets team (firstname.lastname@example.org) to begin customizing an early lockup release benefit for your employees ahead of an exit.
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.
Any US-based users with early exercisable option grants, and ACH eligible who choose to early-exercise through Carta.
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.
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.
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.
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.
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.
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.
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.