What’s new?

This new release gives investors the choice to fund SAFEs online via ACH. By choosing this option investors can quickly fund SAFEs in one-click. 

Why is it valuable?

Direct online funding is the preferred choice for most investors due to improved security, reduced manual entry errors, and hassle-free transfers. But prior to this release, the choice of the method of funding was exclusively made by the company. 

How does it work?

After signing the SAFE, an investor will be provided with two choices:

1. They can add their bank account securely via Plaid or manually to Carta. This is a one-time setup.
2. They can choose to fund via wire, and they will be shown the wire details provided by the company.
   
   

3. Once the funds are received, the SAFE is issued. 

   1. If funding is via ACH, Carta automatically issues the SAFE as soon as the funds are received. 
   2. If funding is via wire transfer, the company needs to indicate when funds have been received in Carta, and the SAFE will be issued. 

What’s new?

Carta has revamped the Exercised and Settled report. The report, used to reconcile exercises, settlements and sales recorded in Carta, now runs from our new reporting engine and comes with improvements and new fields:

• All equity plans in a single report: the updated version includes all of your equity plans within a single report, allowing for easier transactional reconciliation.
• Dedicated Options and RSUs tabs: the improved version provides separate tabs for option exercises and RSU settlements, condensing and simplifying the tabs to show the fields you care about.
• Early exercise: the new report displays which exercises occurred as early exercises, before the underlying shares had vested.
• Payroll ID: all transactions now have their associated stakeholder payroll ID included to improve payroll reconciliation, assuming the ID was input in the platform.
• RSU withhold-to-cover: the report now accounts for the settlements run using Carta's bulk RSU settlement tool, providing information on quantity withheld and quantity released.
• Two FMV fields: to allow for easier reconciliation of FMV at exercise, the Exercised and Settled report now displays two FMV fields -- the FMV as shown to the stakeholder at the time they requested the exercise, and the FMV from the 409A page covering that exercise period.
• Country and state: improve internal controls, tax reporting, and review in case of holders from several different countries/states.

Who is this available for, and how do I access it?

This is available for company admins with Full Access, Company Editor and View-Only permissions, and can be accessed by going to your company account, navigating to Cap Table > Run reports, and selecting the Exercised and Settled report.

What’s new?

Introducing a SAFE Insights tool that provides fundraise benchmarks customizable by industry, stage, and location. 

Why is it valuable?

One of the first steps of any fundraise is understanding what terms to raise on. This tool helps early-stage companies contextualize the terms they are considering against other comparable companies. The tool leverages a dataset of 38,000 startups and 2 million security holders managing $2.7 trillion in equity to enable founders to negotiate and get funding based on reliable and current data benchmarks. 

How does it work?

Companies indicate the terms of their SAFE round including stage, industry, and financing amount raised. Based on their input, the tool  will show  how their specific SAFE terms compare against the latest benchmarks on:

• Pre-money valuation caps
• SAFE term distribution
• Discounts
• Number of investors per round

Getting started:

1. Navigate to the SAFE Financings page under the Fundraising tab
2. Click on “Go to SAFE terms calculator”

1. Choose your terms. You do not need to provide all the terms.

1. Click on calculate, you can now see insights specific to your SAFE round

What’s new?

Customers with an HR Integration can automatically keep stakeholder information up to date! With automatic stakeholder updates, HRIS data for employee addresses, tax IDs, job titles and cost centers can automatically apply in Carta! The Manage Stakeholders page now includes the status and the ability to toggle the feature on and off from a setting modal. Additionally, admins can review these automatic updates via a report. 

How does it work?

When setting up a new integration, Carta will automatically enable this functionality to ensure your cap table information is up to date and accurate. For customers with an existing integration, there is no change to the existing experience, but they can opt in from the Manage Stakeholders page.

What do I need to do?

This feature requires an HRIS integration, which can be configured under Company Settings. For more details on available integration partners, see our HRIS Integrations: Overview.

How do I learn more or get help?

Customers can learn more about automatic updates here.

What’s New

Companies can now add Carta Tax Advisory to their Slack. The new Slack app, allows employees to book 1-1 sessions, visit our video education center, and see their post-session recap from their personal Carta Equity Tax Advisory.

Employees also can view upcoming sessions, join their 1-1 directly, and receive reminders for upcoming sessions.

What do I need to do?

Company admins can log in to their Carta account and view the installation link on the Equity Tax Advisory page. 

After navigating to the Equity Tax Advisory dashboard, select the "Install" button on the task list: 

From there you will be directed to the Slack installation page, make sure you select the proper Slack network. 

If you have any questions reach out to your assigned Carta account team or tax@carta.com to learn more!

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? 

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?

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?

Introducing  83(b) election for founders. Founders can now more easily comply and file an 83(b) election with the IRS.  This release automatically generates the 83(b) form, instructions on how to file it with the IRS, and an email notification that includes issuance date and days left to file. 

Why is it valuable?

Individuals filing an 83(b) election may potentially reduce their tax obligations by choosing to pay taxes on the fair market value (FMV) of their securities at the time of granting rather than after vesting. 

How does it work?

83(b) for founders is available in all Carta plans. This feature will be automatically available for all founders that have accepted founder stock within the last 30 days. 

1. After accepting a stock certificate in Carta, Carta will automatically generate an email notification and 83(b) form.
   
   
2. To view the 83(b) form, log-in to your Carta account, open the applicable certificate, and click the 83(b)elections tab
   
3. Provide additional information, including your social security number and address. You can also choose to manually enter a different fair market value (FMV). 
4. When completed, you can download, print, and make additional edits.
5.  Before mailing to the IRS, sign and date. Make sure to upload a signed copy of the form and add the date mailed on Carta. This makes it easy for you to remember and access a record of this filing - conveniently saved in your Carta account. 
   

How do I learn more or get help?

To learn more about 83(b) for founders, check out this support article or reach out to your Account Manager for a demo.