What’s new?

We're introducing the latest addition to our platform: the beta release of Carta Distributions. Our team has been hard at work, dedicated to simplifying the distributions process and providing a seamless experience for our users. With this release, we're transforming what was once a multi-step process into a matter of clicks. Say goodbye to cumbersome inputs and hello to streamlined efficiency.

With Carta Distributions, you can:

• Seamlessly connect to your cap table and customized distribution rules
• Automate calculations to determine holder payouts
• Integrate distributions with waterfall modeling 
• Direct holders to a dashboard that tracks their invested capital and any preferred returns that have been paid out to date  

Why it matters:

Our customers have spoken, and we've listened. Distributions are a critical aspect of their financial operations, signaling value generation for stakeholders. However, the previous tool fell short of expectations. With Carta Distributions 2.0, we're addressing these pain points head-on, enhancing user experience and satisfaction with the tool.

What’s included?

The release focuses on revamping the user experience of the Distributions tool, with support for both pro-rata and custom distribution methods. We're committed to providing a seamless and intuitive interface, making it easier than ever for our users to manage distributions.

What do I need to do?

If you’re interested in trying out the new Carta Distributions, you can reach out to your account manager or schedule a demo here.

What's next?

In the coming weeks, we'll be rolling out additional features and enhancements. Users can expect to see improvements that allow them to visualize the impact of distributions on invested capital balances across the platform. Plus, we'll be introducing email notifications to keep users informed every step of the way.

What’s new?

We are introducing a new page available to Launch customers - Carta Insights. This page will provide both education and data that we believe will be helpful to Founders as you build your company.

The information we’re including today is built around compensation. Carta Insights will provide you with:

• Educational materials on how to think about setting up your compensation program
• Data on typical option pool sizes and equity grants for your first employees
• Salary and equity benchmarks for Engineering and Marketing roles

How can I access the Carta Insights?

1. Select “Carta Insights” from the side navigation bar
2. Click on the section of Carta Insights that you would like to access

Questions?

If you have any questions about this new report, please reach out to launchsupport@carta.com.

What’s New

You and our shareholders can  now see exactly which securities are eligible for the QSBS tax benefit on Carta. Companies who purchase a QSBS Attestation letter with Carta, can share a personalized version of their QSBS attestation letter with their individual shareholders.

For company administrators

Give your shareholders access to a personalized QSBS statement in their portfolio with one click. Log into Carta.com --> navigate to the QSBS Tax Break page --> click on 'Share QSBS Attestation'.

By selecting ‘Share QSBS attestation’, all individual shareholders will receive an email notifying them that they have a QSBS statement available for download in their portfolio. They will be able to see the statement in their portfolio on Carta.

Sample email that will be sent to individual (or direct) shareholders

For individual shareholders with QSBS eligible securities

When viewing your portfolio on Carta, you will see a banner on top of any company that you hold QSBS eligible securities. If your company has shared the QSBS attestation with you, you will be able to download the statement directly from the main portfolio page.

If you hold securities that may be QSBS eligible - you will also see two new sections on your holdings page:

1. QSBS Tax Benefit tile that will show you

   1. Number of shares that are QSBS eligible today
   2. Number of shares  that will be QSBS eligible when the holding period requirement is met
   3. Maximum tax savings amount based on your cost basis in the securities
   4. If shared by your company administrator, a link to download and view your personalized QSBS statement.

2. Table of QSBS eligible securities that shows:

   1. Security label
   2. Purchase date
   3. QSBS Eligibility status
   4. Link to your personalized QSBS statement if shared by your company

In addition to the new sections in the holdings page, your certificates on Carta will have a new section for QSBS status and the QSBS Attestation.

Personalized QSBS statements

The QSBS statement will show you a personalized snapshot of the QSBS eligible securities you hold as of the download date. The PDF can be used to share with your tax or legal advisors when going through the sale of your shares or discussing your personal situation. The QSBS statement will only be available to individual holders in this release, and not investment firms. 

Disclaimer:
eShares, Inc. DBA Carta, Inc. does not provide tax, accounting, or legal advice. You are advised to consult with your tax, accounting, or legal advisors regarding any financial, tax or legal implications of exercising your options or selling any shares.

Learn more about how Carta can help you with QSBS

If you or your company would like to learn more about how Carta can help you take advantage of the QSBS tax break, or check out our announcement: https://carta.com/blog/introducing-qsbs-attestation/ 

What's New?

Carta has revamped the Equity Plan report – consolidating key information from different reports, and adding brand new, highly requested functionality. This update provides a comprehensive overview of your equity landscape via summary figures, the ability to tie the change in values over a period via baked-in formulas, and granular security-level details.

What does the report contain?

Base version:

• Available Report: Obtain a holistic snapshot of your equity plan, including reserved, outstanding, and available shares, for centralized monitoring and management.
• Equity Plan Granted: Delve into security-level details to track issued, outstanding, vested and more, for optimized management of individual security allocations within your plan.
• Canceled And Returned: Stay informed about cancellation transactions, understanding the status of securities returning to the pool due to various events, ensuring accurate reconciliation and planning.
• Pourovers: Track share movement between equity plans transparently, for seamless reconciliation and efficient equity management.

Optional add-ons when exporting:

• Transactions Ledger: Monitor all share movements with a breakdown of transactions affecting equity pool values, for detailed reporting and analysis.
• Rollforward: Tie out the movement of equity issued under the plan, filtering by period, plan, and even stakeholder to gain insights into share movement over time with ease and clarity.
• Stakeholder Sums: Get a concise summary of outstanding securities for each participant, for efficient monitoring of individual stakeholder positions within your equity plan.

How can I access it?

You can download the new Equity Plan report from your Carta company account by navigating to Essentials > Run reports > Equity plan, or by going to Cap Table > Run reports > Equity plan.

Where can I learn more?

For more information on Carta's new Equity Plan Report, please refer to our dedicated support article. Additionally, you can find details on exporting reports in general on our support site.

What’s new?

We are introducing a new interactive report – the Compensation Summary report. Users can now see a complete view of employee salary and equity spend by by Job Area, Track, or Location and evaluate headcount costs to market targets for these groups.

How can I access the Compensation Summary report?

1. Navigate to the Reports page in Carta Total Compensation
2. Navigate to the “Compensation Summary report” tile and click “View report” 
3. The interactive report will open 

How do I use the Compensation Summary report? 

With the Compensation Summary report, you can view employee salary and equity spend grouped by Job Area, Track, or Location in a table view. Any datapoint that is +/- 10% of the market benchmark will display in red. The Compensation Summary report provides several summary insights including: 

• Projected Annual Salary Spend - the projected calendar year salary spend based on all current salaries and how it compares to market data
• Largest Salary Spend - the area with the largest salary spend and how it compares to market data
• Largest Equity Spend - the area with the largest equity spend and how it compares to market data

Summary insights take into account only employees with complete information and eligible benchmark targets. Users can export their Compensation Summary report to share and use in reporting. 

Questions?

If you have any questions about this new report, please reach out to your Customer Success Manager.

What's new?

An IPO demands meticulous preparation to ensure a company’s governance, finances, and internal protocols   comply with the high regulatory standards for selling shares to the public. The journey to listing day often takes months or years, with the most arduous and time consuming part of the process being the financial and cap table audit.

Recognizing the critical need for thorough preparation, Carta now offers a comprehensive bundle of IPO readiness reports. This streamlines the preparation required for the audit and S-1 drafting by consolidating applicable reports in one location and allowing a one-click bulk download.

What does the bundle contain?

The IPO Reports Bundle packages three different sets of IPO relevant reports: Equity Reports (security and stakeholder specific information), Valuation Reports (all 409A valuations during the company's lifecycle with Carta) and Financial Reports (stock-based compensation expense and minimum disclosure reports). 

How can I access it?

You can find the IPO reports bundle from your Carta company account by navigating to Essentials > Run Reports, or by going to Cap Table > Run reports.

Where can I learn more?

For more information on Carta's IPO reports bundle, please refer to our dedicated support article. Additionally, you can find details on exporting reports in general on our support site.

If you have questions about other ways Carta helps our customers prepare for an IPO, please refer to our IPO Readiness Guide and Checklist.

What’s new?

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

Benchmark Trends

Since our last quarterly refresh, we’ve seen an increase in the number of companies and employee records in our data set, with the largest influx among higher valuation companies. As a result, some benchmarks saw slightly larger changes compared to previous releases.

In aggregate, salary and total cash compensation benchmarks are flat to slightly higher than our last release. Salaries increased more for higher valuation companies. Similar to previous updates, specialization level data continues to change more than the broader sample, as sample sizes for these roles are smaller than job area level data.

Equity benchmarks are flat in aggregate, showing a slight downward trend from last quarter’s 1% increase. Looking at equity trends by valuation, equity benchmarks are flat overall for most peer groups but have declined by about 3% for companies with valuations greater than $1 billion.

What were the largest areas of movement from these benchmarks?

Salary - Salary benchmarks for most job areas and specializations are within 2% of last quarter’s data. The Administrative job area has increased by 4%, while CEO salary benchmarks have decreased by 4%. 

Equity - Human Resources equity benchmarks have increased 7% overall following a 3% decrease in last quarter’s benchmarks. Three specializations saw the largest decrease in equity benchmarks (5-6%): Web Engineer, AI/ML Engineer, and Account Executive. All other roles saw increases/decreases within 3-4% of last quarter.

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.

Questions?

If you have any questions about these new benchmarks, please reach out to your Customer Success Manager.

What’s new?

Carta Launch companies can now complete their Corporate Transparency Act report directly in Carta.

What is the Corporate Transparency Act?

The Corporate Transparency Act is a new Law that came into effect on 1/1/2024 that requires companies to report their company and ownership information to the Financial Crimes and Enforcement Network (FinCEN). Many companies registered or doing business in the US are required to comply within 90 days of incorporation and provide continuous updates whenever the company or ownership information changes.

Why is it valuable?

Non compliance with the Corporate Transparency Act has both civil and criminal penalties for companies and their owners. Carta helps simplify the filing process using your data that’s already on Carta.

Who is this product available to?

This is currently only available for companies that are incorporated on or after January 1, 2024 and are using Carta’s free Launch product but it will be made available to all companies in mid 2024.

How does it work?

1. Navigate to the CTA reporting page under the Compliance & Tax tab
2. Review and verify the pre-filled company and ownership information
3. Provide any missing information (e.g owners or company applicants)
4. Submit your Corporate Transparency Act report

Where can I learn more?

Additional information about CTA and how Carta can help you comply can be found here

What’s New?

Carta’s Tender Offer Transaction Model report makes it easy to get ready for a tender offer transaction. By directly integrating with your cap table, this report allows you to model stakeholder and security eligibility ahead of a secondary transaction.

How does it work?

The Tender Offer Transaction Model allows companies to create personalized tender offer scenarios based on:

1. Your cap table data as of a selected vesting date
2. Eligible share class, equity types, and option types
3. Participation caps by stakeholder relationship groups
4. Share or dollar caps by individual stakeholders

The ability to configure these inputs will help answer important size and eligibility considerations as you contemplate and prepare for a transaction.

The report will show you summary statistics of participant counts, maximum share amounts, and maximum dollars by participant group.

Who is this available for?

All Carta Cap Table customers.

How do I access it?

1. Log into Carta
2. Click on Essentials > Run Reports
3. Select Tender Offer Seller Model
4. Select a record date for which all vested totals will be calculated as of
5. Export

You’ll receive a notification once the download is complete, and will receive an Excel spreadsheet with live calculations.

If you’re interested in learning more about liquidity, please reach out to company_coverage@cartacapitalmarkets.com or your account manager.

What’s New?

Option holders can now see the value of their vested, unexercised options using market prices based on our proprietary Reference Price Range. With just a quick look, option holders can also see potential gains from the exercise and sale of options in their portfolio on Carta.

Interested in realizing the gains in exercising and selling your options? Click on the Sell button to start the process of exercising and selling your shares.

What metrics are available and how are they calculated?

Options are displayed alongside any other equity shareholders have in their portfolio for a given company. See our previous release note for the full list of portfolio metrics.

• Mark: A mark is the price used to value a holding. Your holdings are marked to the lower bound of the Reference Price Range, if Carta has calculated one for the company.
• Shares: Number of vested common and preferred shares currently held, as well as vested, unexercised options.
• Basis: Total cost paid divided by the number of shares; for options, the cost to exercise divided by the number of shares.
  Value of shares: Value of shares at the mark. Calculation: Mark * Shares
• Unrealized gains: Unrealized gain (or loss) in value at the mark compared to your purchase price. An unrealized ("paper") gain has not been actualized, but can be by exercising your options and selling the underlying shares for more than the strike price. Calculation: Value of shares - (Basis * Shares)
  Learn more about how options are taxed

How does it work?

You can view and identify to a Carta representative how many shares underlying your options you’d like to sell on Carta:

1. Log into Carta’s Secondary Marketplace.
2. View your holdings on the “My holdings” tab.
3. Click on the “Sell” button to submit your indication of interest to sell your holdings.
4. Identify the number of options you’d like to exercise and then to sell on the modal.

Who is this available to?

This is only available to Carta Liquidity customers. At this time, only Accredited Investors who qualify as Institutional Accounts can purchase securities and only Accredited Investors can sell securities via Carta Liquidity. 

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.

The mark displayed by Carta does not represent an executable price or bid/ask spread and does not reflect any market premium/discounts. The fair market value or executable price, if any, for any security may be higher or lower than the provided price. Many unregistered equity securities are subject to transfer restrictions that may limit transfers at any price.

The mark, Reference Price, and Reference Price Range are not investment advice or a recommendation to transact at any price and should not be your primary basis for determining the value of any security.