What's new?

GPs on Carta now have full visibility into the progress of their quarterly financial reports – 15 days before quarter-end.

What’s valuable about this change?

Previously, the process to complete your financials was opaque. A series of emails and phone calls were required to project manage your reporting. Now, conveniently located in your Activity tab, you can see a complete checklist of the tasks required to prepare your financial statements. 

Starting today, you can take action and share information with us directly in Carta. We’ll mark those tasks as complete in real-time. Plus you get a look into everything the fund admin team is working on.

What’s next?

On October 2, you'll receive an email with your draft Q3 financial report(s). If your open tasks are resolved between now and then, your financials will be ready to review, approve, and send to your LPs just one business day after the quarter ends. 

What do I need to do?

1. Check your inbox for a “Get started on Q3 2023 financials” email from Carta
2. Log into your account to view your Financial Reporting Progress experience
3. Toggle between your entities using the dropdown on the top right

Didn’t receive an email or are some of your entities missing from the Financial Report Progress Tracker? Learn more about why.

How do I learn more or get help?

Get in touch with your Account Director or talk to one of our representatives today. 

What’s new?

We have three new updates included as a part of this benchmark version:

• Quarterly benchmark refresh 
• New Life Sciences industry benchmarks 
• Peer group updates

Quarterly benchmark refresh

We have updated salary, total cash compensation, and equity benchmarks for all job areas and specializations. 

Market Trends

Salary and total cash compensation benchmarks are generally flat since our last update. These trends are fairly consistent across company valuation and level. 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 1%, less than last quarter’s 9%. Equity benchmarks have been decreasing steadily since the beginning of the year, and it’s possible that the market is starting to stabilize close to a “new normal”. We did observe larger decreases, however, among later stage companies indicating that these companies (similar to public companies earlier in 2023) are focused on managing dilution in the face of falling valuations

What were the largest areas of movement from these benchmarks?

Salary - Project Management roles saw the largest increase this quarter (+5%), balancing out the larger decrease that this job area saw last quarter. Notably our AI/ML engineering benchmarks increased by approximately 3%. IT and Legal salary benchmarks decreased by 3% versus last quarter. All other job areas saw salary changes that were within 2% of last quarter’s benchmarks.

Equity - Human Resources and Finance roles saw the largest decreases. Some job areas and specializations did see overall increases to equity benchmarks this quarter, such as Sales Development, Sales/Solutions Engineering, and Art and Graphic Design. Most other job areas changed by 3% or less versus last quarter though there can be variance by level and valuation peer group.

Life Sciences industry benchmarks 

We have released initial benchmarks for three new specializations specific to the Life Sciences industry:

• Scientist
• Research Associate
• Lab Operations

Benchmarks for these roles were developed based on employee data taken exclusively from the Life Sciences companies in our database, making these benchmarks our first industry specific benchmarks. These benchmarks are reflective of the geographic distribution of Life Sciences talent, with markets like Boston, San Diego, Seattle, and Los Angeles joining San Francisco and New York as the top labor markets for these roles.

Peer group updates

Finally, in an effort to increase the overall quality of our benchmarks, we will no longer provide data for the Below $1M valuation peer group. Variability of pay within that group tended to be high, and many of our benchmarks were less relevant for companies at such an early stage. Any customers with Plans set to use the Below $1M will automatically default to the $1M - $10M peer group after updating to the latest benchmark version.

How do I update my benchmark version?

You can also preview the new benchmarks on your Scorecard by navigating to the Benchmarks page and clicking on the "Preview benchmarks" bubble in the top left.

Here 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.

How do I see benchmarks for the new Life Sciences industry specializations?

You can view benchmarks for the new specializations by:

1. Visiting the Benchmarks page and selecting “Research” under Area. Once the job area is selected, you can select “Life Sciences” from the Industry dropdown and any of the new specializations by selecting the Specialization dropdown.

2. This will allow you to view salary/equity benchmarks for levels 1-3 for Research Associate, levels 4-6 for Scientist, and levels 1-5 for Lab Operations

Questions?

If you have any questions about these new benchmarks or if you have suggestions for additional Life Sciences specific data, please reach out to your Customer Success Manager.

What's new?

Carta now has an exportable Open Cap Table report.

OCX, also known as the Open Cap Table Excel Standard, is an initiative led by the Open Cap Table Coalition to establish standardized practices for equity data.

OCX serves as a cap table report, similar to Carta's existing cap table feature. However, it represents our commitment to a more standardized approach to equity practices.

To access OCX, navigate to Cap Table > Run reports. You will find the OCX report in the equity report list as well as under the Capitalization folder.

Why is this important?

OCX aims to standardize an ecosystem where various stakeholders operate differently in terms of their practices and data presentation. By adopting a more uniform approach, it enables seamless interaction with equity data and smoother movement across different processes and platforms.

Where can I learn more?

Soon, we will have a dedicated support article for the OCX report, and you can read about our existing reports on our support site. You can also find additional information about OCX in Announcing the Open Cap Table Excel Standard (OCX).

What’s new?

Carta is adding support for custom SAFEs and side letters. Companies now have the flexibility to use customized SAFEs and side letters for their financing round. This release expands the types of documents that can be used to issue, transact and manage through Carta. 

Why is it valuable?

Companies and investors may agree on a different set of terms that are not supported by a YC or SAFE template, and require a SAFE and side letter that reflects these terms. With this feature, customers can have their custom SAFE agreements signed and funded on Carta, benefiting from Carta’s streamlined investor and stakeholder signing, status tracking, faster funding, and automatic cap table updates. 

How does it work?

Users can upload a custom, pre-filled SAFE document and side letter to be signed and funded through Cata. 

For acceptance, custom SAFE templates require all of the following: 

• The SAFE document uploaded has all information filled out (e.g. investor name, purchase amount, etc.).
• The terms match what is entered in the platform. 
• The document does not contain a signature page. The Carta SAFE financing tool will generate your company and investor’s signature pages. 

Getting started:

1. Navigate to the SAFE Financings page under the Fundraising tab
2. Create a new SAFE and select Custom SAFE Template

1. Upload your complete, pre-filled SAFE document.
   
   Note: Ensure there are no signature pages.

1. Make sure the information you entered directly on Carta matches the terms on your uploaded document. 
2. Attach any custom pre-filled side letters, if available. 
3. Close and send the SAFE for signing.

How do I learn more or get help?

To learn more about SAFE Financings, check out this support article or reach out to your Account Manager for a demo. You can also learn how you can securely, quickly, and conveniently transfer funds directly within Carta. 

What’s new?

You can now use the Equity Forecasting and Burn Calculator to automatically calculate the impact on your option pool from three different types of equity grants:

• Refresh / Tenure grants – For employees eligible for a tenure grant, use the calculator to forecast the equity grants they should be awarded based on their start date 
• Promotion grants – For employees eligible for a promotion, use the calculator to forecast how many grants they should be awarded based on their start date or their next level’s benchmarks 
• True-up grants – For employees compensated under the market rate, you can view the size of a grant to bring them up to the market rate, and optionally include it within the equity pool burn

With these grants incorporated into your calculations, you can more accurately model your equity pool’s burn over the coming year to make informed decisions around strategies for your compensation program.

How do I access the Equity Forecasting and Burn Calculator?

You can access the Equity Forecasting and Burn Calculator, along with any other Carta Total Comp reports, from either:

• The top of your Scorecard page in Carta Total Compensation
• The Total Compensation folder within the Equity Reporting section in Carta

If you want to have access or want to schedule a demo to understand what you can unlock with the calculator and Carta Total Comp, reach out to your CSM.

What’s next?

We are planning a few additional enhancements to improve ease of use of the Equity Forecasting and Burn Calculator:

• Clear descriptions on how to use each tab
• Incorporation of planned exits / attrition assumptions
• Incorporation of suggested quantities to reach certain targets

This calculator is also a living and growing tool – and so any feedback you have will be appreciated. You can either provide it via reports-feedback@carta.com, through your CSM, or directly within Carta Total Compensation after downloading the calculator. Your feedback will help us improve this and other reports to fit your needs.

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.