What's new?

You can now pull automated expense and disclosure reports for profits interests with vesting schedules that include time-based conditions and event-based performance conditions.

What's important or valuable about this change?

ASC 718 reporting involves expensing each equity grant on your company’s income statements, which are subject to audits. With Carta, you can now simplify expense reporting for profits interests: 

• Eliminate errors and save time with automated expense reporting based on your up-to-date cap table in Carta
• Define reporting parameters and pull customized reports with a few clicks whenever you need them
• Confidently enter audits with accurate, transparent, and defensible expense reports every single time

What do I need to do?

ASC 718 financial reporting is available as an add-on to your current Carta subscription. Please reach out to your CSM to learn more and request a demo.

If you currently have ASC 718 financial reporting enabled on your Carta account, navigate to the Financial reporting tab to generate your reports.

1. Manage any exclusions (to control which interests are included in financial reports) and provide the ASC 718 fair value for each interest. Once you define these reporting parameters, they're saved so you can pull consistent reports every time.
   
2. Input the report start and end dates to run the report.
   
3. Download the expense and disclosure reports.
   

How do I learn more or get help?

If you need help with your Carta-generated financial reports, contact our dedicated ASC 718 support team.

If you’re interested in automating ASC 718 financial reporting with Carta, please reach out to your CSM to learn more and request a demo.

What's new?

We’ve made updates to the Interest Summary to provide Admins and interest holders more visibility into preferred returns.

What's important or valuable about this change?

You can now easily see the total accrued value for each interest based on the compounding period and accrual rate. The new preferred returns section provides visibility into the:

• Accrued Value
• Compounding Period
• Accrual Period
• Accrual Rate
• Accrual Start Date
• Principal Amount
• Day Count Convention

What do I need to do?

Navigate to the Interest Details page for an interest and find the Preferred Return section at the bottom of the Interest Summary tab. Note that the interest type must be enabled with “preferred returns” for this section to appear in the interest details summary. Contact your CSM for more information. 

How do I learn more or get help?

For more information, visit our support site.

What’s new?

Legal Administrators can now group multiple cities under a single local jurisdiction for tax withholding purposes. 

Why is this an improvement?

Issuers now have greater flexibility in capturing jurisdictions where their participants pay taxes, particularly for county-level taxes or jurisdictions that are not specific to countries, states/provinces, or cities.

How does it work?

Navigate to Carta’s Tax jurisdiction and rates table by following Compliance & Tax -Tax Rules-Tax jurisdictions and rates.

Add a jurisdiction below the state or province level and select Multi-Regional Tax Jurisdiction. Enter all of the cities that belong to that jurisdiction.

The jurisdiction is then displayed as Multi-Regional. Any tax rate or rule set for the jurisdiction will apply to all stakeholders with tax addresses containing any of its included cities and will be used to calculate tax withholding for applicable transactions.

What's new?

Get real-time updates when your portfolio companies on Carta raise a new round.

What's important or valuable about this change?

Now, all Fund Administration clients get automatic notifications when their investments on Carta add a new share class to the cap table with filed Articles of Incorporation. We'll also include the original issue price of the new share class – helping you maintain the latest information on your investments.

What do I need to do?

You will receive an email when your portco adds a new share class with a new price-per-share from the original issue price on the Articles of Incorporation. A task will also appear in your Activity tab. There, you can view the new price-per-share, its impact on your fund metrics like IRR and gross multiple, and update your SOI in a few steps.

How do I learn more or get help?

Visit this support article for a detailed FAQ. Have more questions? Your Fund Admin team is here to help.

What's new?

Beginning on June 21, customers with both Carta 409A and Financial Reporting in their subscription will begin receiving two separate, audit-defensible reports: one with the Fair Market Value (FMV) used for tax purposes, and one with the Financial Reporting Value (FRV) used for accounting purposes.

Delivering these reports separately will more closely align with a changing regulatory environment in which tax guidelines under 409A and accounting standards under ASC 718 diverge.

Historically, Carta has only delivered a single report that values our customers' common stock under section 409A of the tax code. This singular report would double as a valuation used for both tax and accounting purposes, which introduced challenges for customers going through audits - companies are incentivized to keep their FMV low to keep options attractive for employees, while auditors may push companies to increase the Fair Value of stock when calculating stock-based compensation expense.

Disambiguating these two concepts allows our customers to work more flexibly with their auditors while still keeping options and other equity awards attractive as incentives for hiring and retaining talent.

What do I need to do?

If you're a customer with both Carta 409A and Financial Reporting in your subscription, you'll receive two reports the next time you request a 409A valuation from Carta: one with the Fair Market Value (FMV), and one with the Financial Reporting Value (FRV).

The FMV can be used as normal: pricing options, helping employees estimate their tax burden when exercising, Form 3921 filings, etc. The FRV can be used in Carta's Financial Reporting product to calculate the expense associated with stock-based compensation. Customers can work with their auditors to either directly use the provided FRV or adjust it from within Carta's Financial Reporting product as necessary.

For customers with access to both Carta 409A and Financial Reporting in your subscription, you’ll see an additional card for FRV at the top of the Valuations homepage in Carta (Compliance & Tax > 409A Valuations) once you receive and accept a new valuation report from Carta:

You'll also see an extra column in the table at the bottom of the Valuations homepage which shows historical FRVs side-by-side with historical FMVs:

How do I learn more or get help?

We've created a few help articles with detailed information about FRV and how this value differs from FMV and appears in Carta:

• Separate Reports for Fair Market Value and Financial Reporting Value
• 409A and ASC 718 Compliance: Carta’s Financial Reporting Value (FRV)
• Financial Reporting (V3): Carta’s Financial Reporting Value (FRV)

If you've received your FRV report and have further questions, feel free to reach out to val-operations@carta.com - we'd be happy to help.  

What’s New

Employees who have access to Carta Tax Advisory through their employer can now book 1-1 sessions with a Carta Equity Tax Advisor directly on the Carta iOS mobile app. 

This release allows employees to select a session, book a time, and join their session all directly in the Carta app. 

What do I need to do?

Employees with access to Tax Advisory will see this feature on the home screen of their portfolio in the iOS app. To download the Carta visit the Apple App Store. 

Have questions? Contact product@carta.com.

What’s new?

Customers can now download reports directly from the company Scorecard page to gain additional insights into their compensation programs. There are 3 reports available to download: 

• Cost vs. Market report: A comprehensive list of all employees, their total compensation, and indicates whether their compensation aligns with the latest compensation benchmarks.
• Equity Refresh report: Shows all employees, their last refresh grant date, and a suggestion for the appropriate amount and timing for their next compensation refresh.
• Equity Forecast and Burn report: A projection of your equity pool's reserve based on various factors like your hiring plans, employee tenure, and performance reviews.

What do I need to do? 

You can download your Reports from the top of the Scorecard page. 

What’s next?

These reports are currently in beta, so we’d love to hear your feedback as we continue to test and improve them.

After you download a report you can provide feedback directly in Carta Total Compensation. Your feedback will help us improve future versions of these and other reports on our roadmap.

We’ll be releasing other reports over the next couple of months. If there are specific reports that you’d like to see in Carta Total Compensation or have any questions, please reach out to your Customer Success Manager.

What's new?

We’ve enhanced the Activity tab in our GP Portal so Carta fund managers can do even more from one place.

What’s important or valuable about this change?

We’ve expanded the requests fund managers can submit in their Activity tab to include the ability to make a new investment, add a subsequent close, and transfer holdings to a new LP.

Once submitted, they can track the status of that request and receive detailed notifications to update them of any status changes.

Additionally, fund managers can now message their fund admin directly from the Activity tab, consolidating and organizing all Carta communication outside of their inbox. 

What do I need to do?

Navigate to the Activity tab. 

You can now submit additional requests through the Quick Actions bar. If you do not see a request, please use the General Inquiry button to submit any request to your fund admin.

Once a request is in progress, we’ve added additional email and in-app notifications so you stay up-to-date on the progress of your fund’s tasks. These include missing information and action required so you know exactly what’s needed from you to complete a request.

We will be making further improvements to the Activity tab over the coming weeks including the ability to schedule a call with your fund admin.

How do I learn more or get help?

To learn more about our improved Activity Tab, check out this support article or reach out to your Account Manager for a demo today. 

We’ve made some improvements

Beginning in May 2023, we are launching a new navigation experience - making it easier than ever to navigate your cap table, create and issue new securities, and manage relations with your stakeholders.

We are testing this experience with a select list of companies. Companies in this test will now navigate Carta’s equity management platform from the left-hand side. We are using this test to iterate on any improvements that need to be made and hope to roll out to 100% of new and existing companies by Summer 2023.

The new menu can also be collapsed for an optimized viewing experience by clicking the menu icon to the right of the Filter text box once you’ve landed in the right spot.

Finding what you need just got easier

The new navigation will make it easier for you to find what you’re looking for and complete critical tasks, with menu categories that are more intuitive and organized according to the type of task that needs to be completed within Carta. 

Terminology that just makes sense

We have also updated some of the terminology that appears throughout the Carta platform to clarify specific tasks and workflows. The changes that we’ve made are outlined in the table below.

FAQs

Why is Carta making this change? 

Carta offers a wide range of products and services, and users sometimes get  lost as they look through menu items in an effort to find the workflow or platform page they need to access. We understand that time is money, and the less time you spend locating the resources you need frees up more time for you to spend growing and managing your company. The new left-side menu enables users to have an immediate comprehensive view of Carta’s functionality with clearer verbiage, menu filtering, and collapsible dropdowns. 

Can I revert back to the old navigation experience? 

No. Our research has shown that our new navigation menu is not only more intuitive for users, but also faster. Beginning in May 2023, Carta is fully migrating away from the top navigation menu. We plan to be rolled out to 100% of companies by July 2023.

How do I use the new navigation experience to find what I’m looking for? 

The new navigation experience includes a filter to assist you in finding what you’re looking for. The menu will responsively pare down as characters are entered in the text box.

Additionally, left-side navigation enables you to expand and collapse multiple dropdowns at the same time, allowing for a more comprehensive overview of Carta’s functionality at a glance.

Did Carta remove any features? 

No. While the new menu may look more compact than in our current experience, all of the features that you have come to rely on are included in the new navigation. The goal of this initiative is not to change the functionality of Carta’s cap table, but rather, to make that functionality easier for you to find.

May 25, 2023 Benchmarks

What’s new?

• Updated salary, total cash, and equity benchmarks for all job areas and specializations
• Updated US geographic differentials for all metro areas
• New total cash compensation benchmarks for all roles (total cash compensation benchmarks are reflective of employees who receive both base salary and some form of variable compensation)
• 90th percentile data for all roles and elements of compensation. Users can now set their target market position and view 90th percentile data on the Bands page.

Market Trends

Salary and total cash compensation benchmarks have fallen slightly (approximately 1% overall) since last quarter, reflecting a continued down market for startup talent. We’re observing that new hire salaries across many roles are closer to or below our previous benchmarks, causing many salary benchmarks to decrease. On a role-by-role basis, we’re seeing a bit more volatility in this quarter’s data as compared to the last six months. As in previous updates, specialization-level data continues to be more volatile than the broader sample, as sample sizes for these roles are smaller than job area level data.

Equity benchmarks have decreased approximately 9%, less than last quarter’s 15%. Lower benchmarks cut across most roles and levels, though executive equity grants dropped slightly less, and even increased in some cases. 

Looking across updated geographic differential data, most metro areas that moved closer to San Francisco pay levels have maintained their differentials compared to last year. This year, we see more cities outside of traditional tech hubs also moving closer to San Francisco pay levels (in particular metro areas across North Carolina and Florida)

What were the largest areas of movement from these benchmarks?

Salary - Sales, Research, and Strategy roles saw the largest increases, approximately 1-5% versus last quarter. Marketing, Administration, and Project Management roles saw the largest decreases ranging from 5-6%. The decreases for Marketing and Administration are driven by corrections that we have made for how certain roles are being categorized within these job areas. Information Technology also saw a larger decrease, largely due to the small sample size for this job area.

Equity - Support, Human Resources, and Strategy roles saw the largest decreases. Decreases in Product, Finance, and Operations were less pronounced than the overall sample

How do I update my plan to use the new benchmarks version?

You can update your compensation plan to use the latest benchmark versions either by:

Visiting the Plan page and clicking on the "Update available" link in the Active Plan window.

Navigating to the Bands page and clicking on the "Update" bubble in the top left.

You will have the opportunity to preview the new plan with the updated benchmarks version and assess their impact on your Scorecard before accepting the new plan.

What’s next?

Carta Total Compensation is developing benchmarks for new specializations.