What’s new? 

Today, we’re releasing the Communication Center to all Carta customers, which gives you the ability to easily provide updates to your stakeholders from a central location using advanced messaging functionality. 

How does it work? 

You can now use the Communication Center to: 

• Send a message as a one-way announcement to your stakeholders, or enable two-way communications so that recipients can leave comments and start a tread 
• Limit access to sensitive messages for a specific period of time
• Keep track of open and read statuses
• Enable PDF Analytics to see page views and drop-offs
• Apply watermarking
• Send communications to recipients who are not on the cap table yet (for example, prospective investors)

How do I access the Communication Center? 

Ready to send a company update? Log-in to your Carta account and head to the Communications tab on the left-hand navigation. See how it works.

Sending 701 Disclosures is now seamlessly integrated into the issuance process on Carta. After drafting shares, a company can quickly run a report to check whether a 701 disclosure is required. If they are, they can upload and securely send to both new and existing stakeholders without leaving the app. 

What is a 701 Disclosure? Am I required to send them? 

A 701 Disclosure is a notice you may need to send to employees and investors if your company wants to sell or issue more than $10 million in securities within a 12-month period. This includes employees and other service providers who will be receiving equity in your company. They must be given the chance to review the disclosures before the purchase decision (or acceptance of an equity award) is made. You can read more about Rule 701 and how it applies to your company here. 

Companies can use Carta’s compliance features to check if they are required to send 701 Disclosures before issuing securities. Go to Essentials > Run reports to find the 701 report to check whether you meet this requirement.

Who is this available for? 

Companies in Scale. If you would like to upgrade your subscription to include Rule 701 Compliance, talk to your Account Manager or schedule a demo. 

How does it work? 

1. After drafting RSUs, click Add RSUs to the ledger.

2. Next, you will be prompted to either run a 701 report or begin preparing the 701 Disclosure without running a report. Running a 701 report will let you know if you are required to send 701 disclosures before issuing these RSUs. 

   1. NOTE: Clicking Prepare 701 disclosure does not trigger an email to your recipients or company signatories. 

3. After clicking Prepare 701 disclosure, you will be taken to the Communication Center,  where you can prepare a message and attach a disclosure PDF. Click Next: Choose recipients or Click Save Draft to save this draft for another time. 

   1. If you save your draft, Carta will add a reminder to the top RSU ledger. Click Draft Rule 701 disclosure on your RSU ledger to continue working on this disclosure.
4. Carta automatically includes all  RSU recipients of your drafted RSUs. Additional recipients can be selected from the table on the left, if applicable. To proceed, click Next.
5. Review the message and recipient list. If everything looks good, click Send communication.
6. Recipients will be able to access the disclosure from their Carta inbox as well as via email. 
7. Once all recipients have received this disclosure, Carta automatically sends RSUs to your company signatories.
8. As soon as signatories sign the RSUs, holders will receive them.

What will recipients see? 

Once a 701 Disclosure has been sent, recipients will receive the following email. This communication will be sent to the stakeholder’s Contact Email on file. 

How can I trust that these disclosures are sent securely? 

All disclosures will be watermarked individually. These documents will be shared with recipients directly in Carta, not over email. Your recipients will be blocked from downloading the document, and any admins on your account will see who opened the disclosure and when. Admins will also have access to analytics to see which pages of the disclosure each recipient spent the most time on. 

Can I resend a 701 Disclosure to a recipient? 

You cannot resend a 701 Disclosure in the app. If you need to resend a 701 Disclosure for any reason, contact Carta’s support team for assistance. 

What's new?

Fund managers can now see an expected completion date for all tasks in their Activity tab.

What’s important about this change?

You can now see when your fund admin team is expected to complete a task, bringing greater transparency to your back office.

Plus, you’ll see when you need to complete your portion of the task to meet the expected completion date.

How does it work?

On your Activity tab, click into any task to view the expected by date.
 

View the Action Needed By date to see when you need to complete your portion of the task to meet the expected by date.

What's new?

We’ve released a new bespoke waterfall modeling engine that is encoded with your distribution rules and connected to your most up-to-date cap table in Carta.

What's important or valuable about this change?

The new waterfall modeling engine allows you to build and run any waterfall model in minutes.

• Run even the most complex models with a bespoke modeling engine that is encoded with the unique distribution rules from your operating agreement
• Increase speed and accuracy by automating waterfall modeling with an engine that is always connected to your most up-to-date cap table in Carta
• Model potential scenarios and estimate equity values with a detailed summary of proceeds for each interest holder

What do I need to do?

Waterfall modeling is available as an add-on to your current Carta subscription. Please reach out to your CSM to learn more and request a demo. 

This solution requires a custom implementation to encode the distribution rules from your operating agreement into Carta’s modeling engine. Your CSM will walk you through what is needed from you to get started.

If you currently have the new waterfall modeling solution enabled and implemented on your Carta account:

1. Navigate to the Valuations tab and click on Waterfall modeling.

1. On the Waterfall modeling page, input the valuation date, the total equity value, and choose your vesting treatment to run the waterfall.

1. You can view your distribution rules by clicking on the Distribution rules button in the top right.

1. Once you run the waterfall, you can view a complete breakdown of proceeds based on your inputs and distribution rules. You can run as many waterfall models as you want by customizing the valuation date, total equity value, and vesting treatment. For each waterfall analysis, you can:

   1. View proceeds by Interest Holder or Interest Type
   2. View overall proceeds or filter by proceeds type(s)
   3. Filter by interest holder(s)
   4. Access interest details and documents
   5. View the breakpoint summary
   6. Export the analysis to Excel

How do I learn more or get help?

If you’re interested in Waterfall modeling, please reach out to your CSM to get started. For support with waterfall modeling, visit our support site.

What's new?

Interest holders with multiple Carta portfolios can now choose the portfolio they want to accept their interests into.

What's important or valuable about this change?

Interest holders with more than one Carta portfolio, such as a family trust or a portfolio they share with their spouse, have the flexibility to accept their interests into the portfolio of their choice.

What do I need to do?

As an interest holder, when you’ve received a new interest, you can either choose an existing Carta portfolio you want to accept your interest into or create a new one.

How do I learn more or get help?

For more information, please visit our support site.

What's new?

We’ve released some usability improvements to Documents that provide Admins more flexibility to make updates to Data Rooms and Templates. 

What's important or valuable about this change?

When managing documents, Admins now have the flexibility to:

• Delete or rename data rooms, the folders inside a data room, and any files they’ve uploaded to the data rooms
• Delete or rename the interest agreement templates that are used for agreement execution, which allows you to simplify the end-to-end interest issuance workflow with fully executed legal agreements

What do I need to do?

1. On the Data Rooms page, navigate to the menu on the right side of the data room, folder, or document to rename or delete it.

1. On the Templates page, navigate to the menu on the right side of the interest agreement template to rename or delete it.

How do I learn more or get help?

For more information, please visit our support site.

What's new?

Fund managers can now view an audit of all changes made to LP contacts.

What’s important about this change?

You now have full visibility into any changes made to your LPs contact information, including: 

• Who added each contact 
• When they were added  
• Any permission changes
• Who changed the permissions 

Plus, you can now easily see if a contact is associated with additional LPs in your firm or switch between fund commitments to view a contact audit across investments.

How does it work?

Select the entity, navigate to the Partners tab, then select Contacts. Find the contact you would like to audit, then click on the last updated date. 

You can now view who added the contact, when they were added, and more. Click the carrot drop down to view contact permissions.

Click the carrot drow down next to Show contact audit in fund commitment to view a contact audit across investments.

To view recent changes made to contacts, sort your contact list by clicking the Last updated column header.

How do I learn more or get help?

To learn more about LP Contact Audits, check out this support article or reach out to your Relationship Manager for a demo.

What's new?

Submit invoices directly on Carta. Now, you can skip the back-and-forth over email and upload all the required information to set up a wire in two simple steps.

What’s valuable about this change?

From the moment you initiate a vendor payment to when your wire is set up, you can track its progress from anywhere, at any time. Plus, you can maintain your operational cadence and submit invoices to Carta in bulk.

What do I need to do?

1. Log into your Carta account and click Initiate a vendor payment in your Quick Actions list
2. Upload the invoice and indicate which bank account to make the payment from
3. Submit the expense and get an instant progress tracker for your wires

How do I learn more or get help?

Get in touch with your Relationship Manager or talk to one of our representatives today.

What’s new?

Starting August 10, 2023, companies that issue NSOs and RSUs with event-based performance conditions attached to their vesting schedules will now be able to automatically calculate and expense these awards in their SBC Expense, Disclosure, and Dilution reports. Previously, companies that gave out awards with event-based performance conditions calculated their SBC Expense, Disclosure, and Dilution values manually outside of Carta. 

Who is this available for? 

All Carta Cap Table users with Financial Reporting in their subscription. If you do not yet have Financial Reporting in your subscription, please talk to your Account Manager or email 718@carta.com.

How does it work? 

• Log in to Carta, and navigate to Compliance & Tax > Financial Reporting. 
• Create a new report. The date range for the report should include the date when a performance award was granted.  
• Once an award has met all performance conditions, there will be a true-up of the expense and any values will be allocated accurately as per FASB US GAAP guidance.
• If the performance conditions have not been met, the expense will be reported as 0 per US GAAP guidance.

What’s an event-based performance condition? 

If an award has a performance condition, it means that the award has a vesting condition that is subject to performance-based criteria. An event-based performance condition is one in which vesting is contingent on a liquidity event such as an IPO.  Carta’s cap table includes support for NSO and RSU awards with event-based performance conditions. Now, companies that issue NSOs or RSUs with event-based performance conditions can automatically expense these options in their financial reports. 

How does Carta calculate the fair value assumptions? 

Companies can choose to use either Carta’s default fair value assumption or to create a customized one. Carta’s default fair values assumption is calculated with the Black Scholes pricing model, using your company’s Fair Reporting Value at an award’s grant date. 

Can I create reports using both US GAAP and IFRS scenarios?  

Not at this time. Companies can only expense awards with event-based performance conditions in US GAAP. 

Can I attach event-based performance conditions to a specific vest date? 

Yes. As of September 14, 2023, companies that issue NSOs and RSUs with event-based performance conditions attached to a specific vesting date can be expensed using our Financial Reporting tool.  

Where do I go if I have more questions about financial reporting? 

If you have more questions about our Financial Reporting product, please contact 718@carta.com. 

What’s New?

Institutional investors can now view confirmed sell-side opportunities directly on Carta.  Investors can view, filter, and review the full set of confirmed sell orders, along with details about company fundraising details, reference price ranges (if applicable) and applicable transfer restrictions.  

Investors can also indicate interest in purchasing the shares listed. 

How does it work?

Log into your Carta account, complete an onboarding questionnaire and then enter the liquidity platform under the “marketplaces” tab.  From there, investors can browse opportunities.

You can submit interest in buying shares listed on Carta:

1. Log into your Carta account and navigate to the Investor Dashboard under Carta Liquidity.
2. View the Supply Board on the “Marketplaces” tab.
3. Clicking on the “Buy” button to submit your interest
4. If you don’t see a company you’re interested in, you can still submit interest by emailing: investor_coverage@cartacapitalmarkets.com 

Who is this available to?

This is only available to Carta Liquidity customers. If you’re interested in learning more about Carta Liquidity and get access to the platform, please reach out to investor_coverage@cartacapitalmarkets.com or your account manager.

Disclaimer: Carta, through its wholly owned broker-dealer subsidiary, Carta Capital Markets, LLC, offers a streamlined experience for executing pre-negotiated stock transfers, tender offers, and other secondary liquidity transactions. Carta Capital Markets, LLC is a member of FINRA/SIPC.