Carta Release Notes - Product Updates

4 years ago5/30/2022

Account Recovery Measures

Who This Affects

Users without a verified secondary email address

What’s New

Additional emails are required to assist users with providing a secondary login credential in case access to their primary email address is lost. As part of our efforts to improve our clients' account security, we are updating the process of adding and verifying your additional email address.

As part of this release, we will be notifying all users without a verified additional email address to add or verify the email they have listed. This subset of users will be receiving an email notification, as well as an outstanding task in their Carta account’s task manager.

Timing

Namira Wicaksana

4 years ago5/26/2022

Total Comp Geo Factor Refresh

What's new?

Benchmarks version 2022-05-26

What changes can I expect from these benchmarks?

Geographic adjustments have been updated to reflect current cost-of-labor data across the US. There have been no changes to the underlying benchmarks that were released on April 13, 2022, details of which can be found here.

Given the current sample size of Carta Total Compensation we are now able to rely on data from Total Compensation customers, representing the broad tech industry, to determine cost-of-labor differentials in 33 cities (previously 17 cities). For all other US metropolitan areas we continue to rely on data from the Bureau of Labor Statistics (BLS) which is based on a wider set of industries and type of employee.

What were the largest areas of movement from these benchmarks?

For most of the largest markets in Carta Total Compensation we’ve observed an increase in pay relative to the San Francisco Bay Area. Some of the changes to key markets include the following (SF Bay Area = 100%):

Metro Area Previous Adjustment New Adjustment
New York-Newark-Jersey City, NY-NJ-PA 89% 100%
Seattle-Tacoma-Bellevue, WA 97% 100%
Los Angeles-Long Beach-Anaheim, CA 85% 94%
Boston-Cambridge-Nashua, MA-NH 87% 94%
Austin-Round Rock, TX 82% 91%
Miami-Fort Lauderdale-West Palm Beach, FL* 68% 90%

\* Data source for Miami has changed from BLS to Carta Total Compensation due to our increased sample size.

Outside of our largest markets we observe a mix of increases and decreases relative to Bay Area compensation levels, but on average there has been a slight increase.

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:

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

  2. 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.

Improvements to MSA borders

Carta Total Compensation currently defaults employees who are not in a supported Metropolitan Statistical Area (MSA) to a geographic adjustment factor equal to your plan’s threshold value. With this update, Carta Total Compensation will now use the adjustment factor for the nearest supported MSA.

What’s next?

Additional functionality that will allow users to apply a level-based approach to geographic adjustments.

Jeffrey Glusman

4 years ago5/24/2022

Capital Calls on Android

General partners now have the ability to view and track capital calls from the Carta Android app. Investment firms can now track the progress of on-going and completed calls along with investor details, on the go, straight from the Carta mobile app.

Who this affects

Supported platforms

What's new

Fund Administration clients can now access their capital call details and investor information from the Carta Android app.

Sudeep Kumar

4 years ago5/24/2022

Cashless Exercising on Mobile

Carta users will now be able to perform a Cashless Hold Exercise and Cashless Sell Exercise on the mobile app.

Who this affects

Supported Platforms

What’s new

Users with holdings in public companies on Carta will now be able to exercise and sell their shares via a Cashless Hold or Cashless Sell transaction while on-the-go through the Carta mobile app. These features were previously available to users via desktop, and this launch closes the previously existing gap in functionality between the Carta web experience and the Carta mobile app.

Sudeep Kumar

4 years ago5/6/2022

Web-Login on Mobile

Carta mobile app users will now be able to login using a web-browser on iOS and Android. Web-login gives us the benefits of browser-based authentication, and better security, without disrupting the user experience.

Who this affects

Employees and Investors

Supported Platforms

iOS & Android

What’s New

In an effort to bring login and authentication together across all Carta platforms, we are launching browser-based login on mobile. The web-login experience will use Safari on iOS and a default browser on Android.

Sudeep Kumar

4 years ago5/5/2022

Valuation Updates from Company Cap Tables

What's New?

Carta fund admin users can instantly be notified about share price updates for portfolio companies with their cap tables on Carta. As Carta companies publish new share classes or file updated Articles of Incorporation (AOI), funds with basic or higher cap table access may receive notifications about these updates. In addition, users will have the option to apply these updates to their Schedule of Investments (SOI) immediately.

When a Carta company raises a new round and publishes it on their cap table, firms with appropriate access can be notified, and Carta will automatically mark their share value to the latest price on the AOI.

How it Works

When a company has their cap table on Carta and raises funding through an equity round, they update their cap table by sharing the publicly filed Articles of Incorporation and revising their cap table data to reflect the new ownership and share price.

The Fund Administration team reviews these updates when a new share class is authorized with a filed state incorporation document amendment. Fund admin users who a Carta company has granted basic, advanced, or detailed access to the cap table will be notified of updates through email. The email will contain a link to information such as share class, share price, and impact on fund metrics.

Who This Affects

Firms who have requested and been granted basic, advanced or full detail level access to the cap tables and financing history for their Carta portfolio companies will be notified of new filings.

Why This is Awesome

Carta serves a powerful network of equity and ownership data, which provides a single source of truth for companies and VC firms. This enables accurate data to be leveraged in multiple places, reducing discrepancies, confusion, and manual updates of investment valuations.

Whitney Knowlton

4 years ago4/28/2022

Revamped Employee Onboarding Experience

Employees registering their account on Carta for the first time can now provide their personal information as part of the onboarding process to complete their user profile.

Who this affects?

Employees who have been issued ISO/NSO option grants or Restricted Stock Units and are registering with Carta for the first time.

What’s new?

With an objective to provide insightful experiences, we’ve revamped the employee onboarding process to allow users to complete their user profile. Every employee registering with Carta for the first time to accept their first RSU or ISO/NSO option grant will now have the ability to provide the following information:

Capturing these details upfront allows employees to be transaction ready for events such as exercising.

After successfully completing their user profile details, users will be directed to the Tasks page where they can accept their security.

Timing

Hira Zahid

4 years ago4/19/2022

Disqualifying Disposition Report - Private Companies

What’s new

Private companies can now report the complete list of all ISO dispositions and see exactly which dispositions qualify for tax incentives and which ones do not, along with Ordinary Income value and other information.

How it works

Under Capitalization > Reports, find the Disqualifying Disposition Report (ISO):

Select the reporting date range, acknowledge the report’s use of in-platform securities and transactions, and then export the report to Excel:

When the report finishes generating, it will be available in the Downloads menu:

The report shows info on Disposition Type, Ordinary Income, FMV and more. In order to be completely transparent, Excel formulas are used for Disposition Type, Ordinary income, First Qualifying Disposition Date, and Disqualifying Reason fields to show how they are calculated:

Who this affects

Private companies with tender offers or secondary ISO transactions captured in Carta.

Timing

Available now for all Private market customers (the Public market Disqualifying Disposition Report is available at request as part of the Early Access release).

Additional resources

For more information around the Disqualifying Disposition Report and underlying data, please refer to this support article.

Webb Allen

4 years ago4/18/2022

Save time on administrative tasks with HRIS integrations

What’s new?

Carta now supports integrations with 150+ HRIS and payroll providers. Customers that integrate their HRIS with Carta will have access to Pending Stakeholder Terminations, Pending Updates to Stakeholders, and Carta Total Compensation (with an active subscription).

What are the benefits of integrating my HR system with Carta?

Your organization can unlock a new level of automation that helps you become more efficient and make better-informed decisions about your equity program with Carta’s HRIS integration. More specifically, HR integrations will help your organization in the following three ways:

1. Quickly update employee records

Reduce double entry, win time back, and gain a single source of truth for critical employee information like terminations and employee addresses.

2. Keep employee data synced across systems

With HRIS and equity data synced, you can trust that your information is always ready to take action on. If there is ever a discrepancy, Carta will flag it and make it easy for you to reconcile.

3. Calculate and understand tax impact

Employees’ tax impact has never been easier to understand with salary, location, and equity information complete in one place. Carta can help inform employee tax liability for taxable equity events.

What are the steps to integrate my HR system with Carta?

There are two steps that need to be taken to properly integrate your HR system:

1. Connect your HRIS

There are a few variations for connecting each HRIS system depending on the system’s API configuration. However, this should take no more than two minutes to complete for any provider. Here are specifics for each provider Carta integrates with:

Note: Only those with Company Editor, Company Administrator, or Legal Administrator permissions can perform the HRIS integration on Carta. Most HR systems also require the individual authenticating the integration to have the highest permission level too.

2. Match employee records from your HR/payroll system to stakeholder records on Carta

Carta will match the list of employees in your HRIS to the stakeholder ledger in Carta by looking at First Name, Last Name, and Email, then ask you to review them for accuracy. Please see here for how to perform the Employee ID matching process.

Note: This is a necessary step for you to take to be able to take advantage of integrations.

How do I take advantage of the integrations once I have completed the initial integration?

There are two specific modules that will allow your organization to make use of your HR system integration with Carta: Pending Terminations and Pending Updates to Stakeholders.

Please see below for how to use these modules to help you manage data coming from your HR system on Carta:

David Lichtenstein

4 years ago4/18/2022

Untitled Post

SPV Formations: Fund of Funds and Audit

What’s new

Carta has been able to perform fund administration for SPVs that are audited and/or fund of funds but now we can form these SPVs as well.

How it works

In our engagement letter form select the package that works best for you.

Note: if you have a more complex SPV use the link at the bottom of the engagement letter form to get in touch with an account manager.

After engaging with Carta to form your SPV, we will invite you to complete our setup guide.  Within the setup guide we will generate an Operating Agreement or Limited Partnership Agreement that allows for your SPV to be audited and/or invest in funds.  You and your LPs will be able to sign the document within Carta.

What’s next

We will continue to expand our SPV Formations offering allowing customers to form SPVs with quarterly reporting, multiple capital calls, premium carry and annual management fees.

Jake Hadary

4 years ago4/13/2022

Engineering specializations

What's new?

Carta will now provide salary + equity benchmarks for the following engineering specializations:

How can I assign an employee to a specialization?

You can assign an employee to an engineering specialization by:

  1. Visiting the Employee Scorecard page for a particular employee and selecting “Edit” next to the employee’s role and then selecting “Job area and level” on the Update details page.
  1. Select the “Specialization” dropdown to assign an employee to one of the listed specializations.

Note: specialization benchmarks are currently limited to DevOps + Site Reliability, Quality Assurance, and UX/Frontend for the engineering job area.

How do I see benchmarks for engineering specializations?

You can view benchmarks for engineering specializations by:

  1. Visiting the Bands page and selecting “Engineering” under Area. Once the engineering job area is selected, you can change the engineering specializations by selecting the Specialization dropdown.

How do engineering specializations affect the Employee Scorecard?

The compa-ratio is a quick way to compare an employee's compensation to your plan's target rate for a given job area, level, and location. The compa-ratios for an employee assigned to the DevOps + Site Reliability, Quality Assurance, or UX/Frontend engineering specializations will now be calculated using the target compensation for the specializations.

Improvements to the Employee Compensation Timeline

We’ve improved the employee compensation timeline to make it easier to discern between the various types of equity awards an employee has been issued.

Benchmarks version 2022-04-13

What changes can I expect from these benchmarks?

We’ve added more than 10,000 new salary data points to our database since the last benchmark update in January. This has allowed us to significantly improve the quality of our model as we compare results to the underlying statistics. Given the increase in the sample we are able to be more granular in our modeling as we look at different job areas and types of employees (ICs and Managers vs. Executives).

While changes to the benchmarks are largely a reflection of modeling improvements, the changes will also reflect salary movements in the market since January.

This benchmark version also includes engineering specializations for DevOps + Site Reliability, Quality Assurance, and UX/Frontend.

What were the largest areas of movement from these benchmarks?

With this benchmark update we observed larger than expected movement across several job areas, driven largely due to increased sample and refinements to our modeling, and less by overall market dynamics. Many of the decreases we observed were in valuation peer groups of $50M and below. The increases we observed were mainly in valuations higher than $50M. In both cases our benchmarks moved closer to the underlying statistics in our database.

Looking by job area, we saw the largest average increases (ranging from 6.5% - 10%) and decreases (all less than 1.5%) in the following job areas:

Increases:

Decreases:

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:

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

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

What’s next?

The Bureau of Labor Statistics recently released 2021 data for US-based geo adjustments. Carta will release a May benchmark update that will include improvements to the geo adjustments within the Total Compensation product.

Jeffrey Glusman

4 years ago4/12/2022

Retain talent with Total Rewards

All Carta Total Comp customers now have access to Total Rewards.

What’s new?

How do I get started?

Setting up Total Rewards is simple. Click here for step by step instructions, or check our Total Rewards User Guide for more tips for how to ensure an easy roll out to your team.

David Lichtenstein

4 years ago3/23/2022

Pre-Clearance (Public Markets)

Corporations Equity AdministratorsNew Feature

What’s new

Public markets administrators can now  designate employee groups that require company approval before trading through Carta’s pre-clearance tool.

Unlike blackout periods, which are in effect for sensitive time periods, pre-clearance applies at all times that the seller is configured to require it. Pre-clearance allows issuers to proactively review and approve or reject seller trade requests when the company is in an open trading window.

Who this affects

Public company administrators, and the sellers that public companies configure to require pre-clearance.

How it works

Pre-clearance populations are designated at the officer code level. Any seller associated with an officer code requiring pre-clearance (with an effective officer code as-of date) will require pre-clearance to trade.

Sellers that are associated with an officer code that requires pre-clearance will be presented with trading request instructions upon portfolio login:

If sellers are not in a blackout period and are only prevented from trading due to pre-clearance, they will be able to request the ability to trade.

After the seller submits a pre-clearance request, the seller will see a Pending status in the portfolio while the issuer reviews the trading request:

The issuer navigates to the Pre-Clearance tool to review and either accept or reject the request:

Sellers can enter Cashless sale transactions and stock sales until pre-clearance expires.

Timing

The pre-clearance feature is now available to all public companies.

Bryan Wells

4 years ago3/18/2022

Investor Services Security Update: Requiring 2FA in 2022

Starting in May 2022, we will require that all Carta accounts have two-factor authentication (2FA), also known as Multi-factor authentication (MFA) enabled. Investor Services customers should confirm all of their team members have personal accounts properly provisioned and secured with MFA/2FA as soon as possible.

Why MFA/2FA?

MFA is the industry standard for software companies, like Carta, that store sensitive identity and financial information.

What does this mean for me?

As we make this change, all accounts need to be associated with a single person’s name.

If there are multiple people at your organization accessing Carta with the same email and password, you need to take action.

If you’re not sure, click here for instructions on checking or updating the name on your account.

How can I create accounts for other individuals on my team?

You can add people on the people page of each account by following these steps.

If you are unsure about how to set up access for other members of your team, please reach out to our support team at investorservices@carta.com.

Why can’t we use two-factor authentication with shared login credentials?

We cannot send MFA/2FA codes to multiple people at once.

Critically: resetting MFA/2FA can only be done for a person’s individual account. If a team member needs to reset MFA/2FA without a backup code, they will need to get in touch with our team and present a photo ID that matches the name on the account.

How do I get this process started?

Our Investor Services support team is happy to help you with this process. Reach out to them directly at: investorservices@carta.com.

Why is this being required?

A password on its own gives you poor protection from hackers. They can steal them from other insecure websites or via malware, and people often reuse the same password for many accounts or choose passwords that hackers can easily guess. Carta is adding this additional security to protect your account from social engineering, phishing, and other related attacks.

Thank you for being a Carta customer, and we look forward to answering any questions you might have about this change.

Kathleen Meil

4 years ago3/15/2022

New Total Comp roles: Area Lead and Recruiter

We've updated the Total Comp permissions system with two new role types:

To add a teammate as an area lead or recruiter, go to the Settings > Permissions and roles page click on "Add User" and follow the instructions in the modal.

You will be asked to provide the teammate's email address, assign a role, select which areas that you want the teammate to have access to, and then select the highest level within those selected areas that they can view/edit. You can also change the role and permissions for an existing user by clicking on the action button (three dots) in the user table and selecting Edit user.

David Lichtenstein

4 years ago3/14/2022

Improved Capitalization > by Share Class Experience

Soon, companies will have access to the updated Capitalization > By Share Class view. This page comes with improved performance for large Cap Tables, allowing you to view and interact with your Cap Table up to 5x faster.

To access this view, you can navigate to Capitalization > By Share Class.

What’s next?

We will continue to improve the experience, adding a new summary visualization to the top of the page, and improving the navigability between the By Share Class and the By Stakeholder Cap Tables.

Resources

Support Article: Capitalization Table - By Share Class

Will WD

4 years ago3/2/2022

Notifications for Qualified Small Businesses

What’s New

Users with holdings in companies identified as Qualified Small Businesses (QSB) will now be notified of the potential tax benefit. Carta determines QSB eligibility when performing a 409A valuation and email notifications will be sent to all users associated with the company once the valuation is accepted. In addition, vesting emails will include information about the qualified small business stock (QSBS) tax benefit.

Furthermore, users can now find a banner in the company overview page within their portfolio that informs them about QSBS eligibility, linking to a blog post to learn more. Finally, users will be notified if their exercise qualifies for QSBS once they submit an exercise request.

Who this affects

US Companies using Carta for 409A valuations that are QSBS eligible and all their stakeholders, prioritizing “Vested” option holders.

How it works

Email notifications

Emails are sent to all users associated with a company that qualifies as a QSB. If Carta determines the company is a qualified small business, emails are sent once the 409A valuation is accepted. Extra emails are sent to all users each time the company’s valuation includes eligibility.

Vesting emails

Vesting emails will now include information about QSBS eligibility to help make a more informed decision about exercising.

Company’s overview page

A banner informing users of the QSBS Eligibility Tax Benefit can be found next to the company’s name in their portfolio. This banner appears for companies identified as qualified small businesses, including information about the potential tax benefit from exercising and the expected timeframe of the company’s eligibility.

Exercise submission message

Upon submitting an exercise request, the Congratulations page will inform users that the shares are QSBS-eligible. It summarizes the conditions and links to an Equity Education article to learn more ( highlighted in red).

Timing

Additional Resources

4 years ago2/25/2022

Redesigned Capital Call Request Tool

What’s new?

Previously, our capital call request tool only allowed General Partners (GPs) to request capital from all investors in the fund regardless of their close date. Starting today, GPs can use the redesigned tool to:

Additionally, GPs will be able to view a list of all their newly closed investors, as well as any investors whose commitments have increased or decreased since the last capital call. The capital call amounts to be called from these investors will be auto-calculated by the tool for the GP to review.

How it works

  1. There are two ways you can request a capital call. You can navigate to the Firm Management Page or through the capital calls tab in the fund page.

  2. Select the type of capital call you would like to request:

  3. Pro Rata capital calls is an improved version of our capital call tool. Input a capital call dollar or percentage amount, followed by call details, and go through the final review step before initiating your capital call.

  4. Subsequent Close capital calls will list out investors who are new and those with changed commitments since the last capital call. You will have an optional text box for additional notes, capital call details, and a final review before initiating your capital call.

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Who this affects

This is available for all fund administration customers who are on the Carta General Ledger.

What’s next?

We’ll be expanding the tool’s functionality to handle more complex scenarios, such as calling additional capital from both new and existing investors in the fund. We also plan to embed the PDF notices at the review step to give GPs the option to start the capital call without further approvals.

Erin Kim

4 years ago2/17/2022

Set your employees' local currency

You can now set the local currency for cash compensation (salary and variable) for your employees' scorecards. This new feature paves the way for better support for international employees. Target compensation for non-USD currencies will be supported in the future.

David Lichtenstein

4 years ago2/16/2022

Improvements to job leveling framework

We've enhanced the leveling framework with new and updated job areas and specializations. This improvement is an important step toward expanding the scope of the Bands feature to include benchmarks for these new job areas and specializations.

NOTE: These updates do not impact your employee's target salary or equity, as they are simply improvements to the labeling system to more accurately reflect trends in job functions.

The following job areas and specializations have been added and updated. Job areas marked with an asterisk (*) are currently only available for leveling purposes and do not yet support bands. At this time, all specializations still do not differentiate bands/benchmarks from their top-level job area, however, we will soon be launching specialized bands starting with Engineering, IT, Marketing, and HR. You will be notified as soon as bands are available for these new areas and specializations.
Job Area Specialization
Administration Administrative Assistant
Corporate Affairs* Government Affairs
Corporate Affairs* Regulatory Affairs
Customer Success Training
Data Business Intelligence and Analytics
Design Industrial Design
Design UX Design
Engineering Crypto and Web3
Engineering Data Engineering
Engineering Web Engineer
Finance Financial Planning and Analysis
Finance Tax
HR Benefits
HR Compensation
HR Diversity
HR HR Generalist
HR Learning and Development
HR Total Rewards
IT* Information Security
IT* Information Services
IT* Network Ops
Legal Corporate Counsel
Legal Paralegal
Manufacturing* Assembly
Manufacturing* Manufacturing Engineering
Manufacturing* Production Planning
Manufacturing* Quality Assurance
Marketing Communications/Public Relations
Marketing Creative Marketing
Marketing Digital Marketing
Marketing Events
Marketing Marketing Operations
Marketing Production
Operations Facilities
Product Technical Writing
Project Management Non-Technical Project Management
Project Management Technical Project Management
Research Clinical Science
Research Pre-Clinical Science
Research Process Development
Research Support
Sales Sales/Solutions Engineering
Strategy Business Operations
Strategy Corporate/Business Development

David Lichtenstein

4 years ago2/15/2022

New Updated User Roles

Soon, Carta customers will start seeing an expanded set of Roles to help you reflect the different individuals who are handling different aspects of Cap Table management.

For now, users assigned to new roles will serve as point of contact for their areas. Over time, these individuals will see updated experiences and be guided to relevant Carta tools.

To see this experience, Navigate to "Company > Permissions and Roles > Roles"

Alex Chen

4 years ago2/2/2022

Public RSU settlement now captures tax withholding at the tranche level

Corporations Equity AdministratorsImprovement

What’s new?

Previously, Carta's public markets RSU settlement tool grouped all vested tranches for an RSU grant into a single settlement entry. Carta now captures the settlement of each RSU tranche separately, including shares sold or withheld to cover taxes per tranche.

This enhancement applies to public RSU grants with multiple vested but unsettled tranches.

This change provides the following improvements:

  1. Clarity on taxes: If an issuer is releasing multiple tranches at once for a single grant, taxes are now easier to review and reconcile. Each tranche’s taxes are shown distinctly in our reports.
  2. Clarity on net shares: Carta’s reporting now breaks down the shares sold or withheld for taxes for each tranche. This provides additional clarity and ease of reconciliation for participants selling net RSU shares through 10b5-1 trading plans.

Changes to reports:

Tax calculations are now captured at the vesting tranche level when setting up an RSU settlement.

Shares sold or withheld for taxes are now captured at the tranche level in Carta's RSU Settlement Details report.

Timing:

This enhancement will be released to all public Carta companies on February 2, 2022.

Bryan Wells

4 years ago1/27/2022

Portfolio Overview Redesign

Users with holdings in private and public companies can now view their holdings details directly from the Portfolio screen for easy access.

Who this affects?

Shareholders with holdings in private and public companies.

What’s new?

With an objective to provide insightful experiences, we’ve redesigned the Portfolio Overview screen to surface important holding details for each company. This redesign introduces usability enhancements by eliminating extra clicks and effort required to find the information needed to view and understand equity.

We know things like the quantity of option grants, vesting schedule, and values of securities are some of the most important metrics to have top of my mind when reviewing your portfolio. In the Portfolio Overview, each private company card will now present the following information with the ability to view further details when clicked:

Each public company card will now present the following information with the ability to view further details by clicking on the company name:

Hira Zahid

4 years ago1/24/2022

Carta Web now has Section 6039: Form 3922 tax form generation

What's new?

Carta Web now supports the generation of Form 3922 for Employee Stock Purchase Plans in the Company Administrator view. Companies that would normally have access to the Compliance tab, can now request access to Section 6039 from their Customer Success Managers. Form 3922 forms are due to stakeholder portfolios by January 31, 2022. By enabling this functionality in Carta Web, administrators are now in control of the Form 3922 generation and distribution, similar to Form 3921 for Incentive Stock Option Exercises.

NOTE: This feature can be enabled upon request from companies that have an Employee Stock Purchase Plan.

From the IRS:

Corporations file this form (3922) for each transfer of the legal title of a share of stock acquired by the employee pursuant to the employee's exercise of an option granted under an employee stock purchase plan and described in section 423(c) (where the exercise price is less than 100% of the value of the stock on the date of grant, or is not fixed or determinable on the date of grant). How to Use

  1. To generate Form 3922, navigate to Compliance > Section 6039.

NOTE: TCC is not required to generate Form 3922 Copy B for employees.

  1. Click Generate.

  2. Select the Effective Year of the report.

  3. Review any missing information, check off the box to confirm company data, then click Next: add contact info. If any information is missing, complete the information, then return to this stage.

  1. Navigate to Company > Settings.
  2. Click into the Profile tab.
  3. Enter Tax ID, TCC (required to generate Copy A, but not required for Copy B) and address.
  1. The names, addresses, and SSNs can be edited individually by clicking Edit to the right of the stakeholder’s row.
  2. The stakeholder details can also be updated in bulk via Stakeholders > All stakeholders page. Review these instructions to bulk update stakeholder details.

5. If the missing data was entered in, return to the Compliance > Section 6039 page and click Generate to click through the steps to proceed and add company contact information. The company contact is formatted into the electronic Copy A .txt file that will be uploaded to the IRS site.

Click Generate Form 3922 to begin the generation of the files.

6. Refresh the page after some time if you see a spinning wheel or navigate away and return later.

7. Once generated, click Download reports for the tax year to download a .zip file to your local drive that contains all necessary data for Copy A (efile), and Copy B (statements).

The .zip file will be split out into the following three files:

NOTE: Do not edit this file. Only download and upload to the IRS FIRE site. If any data needs to be updated, repeat the initial steps for the same filing tax year to regenerate the reports and download the updated files.

For any filing questions, contact your tax advisor.

Who this affects

Public and Private Market companies with an ESPP.

Timing

This feature can be enabled on demand by reaching out to our support team or Customer Success Managers.

What's Next

The product team will be enhancing Form 3921 functionality to bring it more in line with the new Section 6039 admin experience.

Vibhu Mahajan

4 years ago1/24/2022

Improved Public Exercising Experience

Option exercising with Public companies is now easier than ever.

The exercising experience for public companies has been improved. The exercise request is now a coherent workflow guiding users through each step and providing key information about the exercise. With this detail, users can be more confident with their selection at each step of the exercise request. If there are issues with the exercise, clearer banners explain how Carta calculates share amounts and market prices.

Who this affects: 🇺🇸 Public US companies

What's new:

Action required: No action required

Timing: Released to 100% of all public companies on Jan 24, 2022

Bryan Wells

4 years ago1/24/2022

Pre-filled W-9s in LP Closings Tool

What's New

LPs subscribing to Funds and SPVs using Carta's Closings Tool can now E-Sign a pre-filled W-9 while filling out subscription documents.

Having LPs submit a tax form is an important part of the closings process for any Fund or SPV to ensure tax teams correctly prepare LP K-1s. We received feedback from LPs about the friction of printing, signing, and uploading W-9s and wanted to streamline the process.

How it Works

For Individuals

For U.S. based LPs subscribing as an Individual, we can now optionally pre-fill a W-9 for them to review and E-sign in just three clicks. The W-9 is pre-filled based on the information the LP already provided as part of their subscription.

For Partnerships and LLCs

For LPs subscribing as a partnership or through a LLC we'll ask some additional questions to ensure we are accurately representing the LPs federal tax classification on the W9.

With the initial release of this product we will not be pre-filling W-8s or W-8BEN-Es for non-US LPs but will still allow them to upload their own form.

Who this affects

This is now available to any LPs using Carta's Closings Tool. The Closings Tool gives LPs a quick and easy way to fill out Fund and SPV subscription documents.

Spencer Holton

4 years ago1/21/2022

Set Your Target Market Position

What's new?

Target Market Percentiles

Carta Total Comp will now show target data for the 25th, 50th, and 75th salary and equity percentiles.

How do I change my target market percentile for my compensation bands?

You can update your target market position to use the new percentiles either by:

  1. Visiting the Plan page and clicking on the "Create plan" button in the Active Plan window. The Create Plan window contains a section called “Market position by job area” where you can specify your target salary and target equity percentiles.

  2. Visiting the Bands page and clicking “Edit” under Target criteria. Once in edit mode, you can change the target market position by selecting the Percentile dropdown.

Market Position by Job Area

Carta Total Comp users will now be able to set their organization's target market positioning by element of compensation (salary + equity) and job area to make sure they're getting a view of market competitiveness that supports their overall talent strategy.

How do I update my Plan to define my market position by job area?

You can update your existing compensation philosophy by:

  1. Visiting the Plan page and clicking on the "Create plan" button in the Active Plan window.

  2. Under "Market position by job area" you will see a table containing your default salary + equity positioning.

  3. Select the "+" icon to create additional market positions by job area.

  4. Each additional market position will allow you to specify the job area, target salary percentile, and target equity percentile.

How does Market Position by Job Area affect the Employee Scorecard?

The compa-ratio is a quick way to compare an employee's compensation to your plan's target rate for a given job area, level, and location. A plan that specifies a market position for a job area adjusts the target rate for all employees in said job area. These changes can be previewed by selecting the “Save and preview plan” button on the Create Plan page.

Benchmarks version 2022-01-21

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:

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

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

What’s next?

We will be expanding our benchmarks to include salary and equity data for the following Engineering Specializations: DevOps, Frontend, QA, and Software Engineering.

Jeffrey Glusman

4 years ago1/21/2022

Funds Can Now Review and Request SOI Updates in-App

What’s new?

Valuation updates can now be submitted directly in Carta!

We kicked off EoY reporting by launching Schedule of Investments (SOI) review emails with in-app flows for Fund Managers approve their valuations, markup their investments, or request other updates right in Carta. This is the first step in a set of functionality for making the quarterly and annual reporting process easier than ever.

How it works:

Rather than Fund Admins having to comb through investment valuations for every entity and curate one-off email threads with Fund Managers to ask for reviews and updates, they can now kickoff these emails with just a few clicks in Carta, and easily track where each entity is in the reporting process.

Fund Managers will be sent a link to their SOI for review and approval, where they can approve on the spot or request changes directly in app. For markups or markdowns, they can go through a fully in-app flow to complete the updates. They no longer need to go download their SOIs and itemize every change through email, to send back to their Fund Admin.

Any approvals or requests for changes will automatically be queued for Fund Admins to review and push through, while markups and markdowns that pass health checks will push through updates directly and be routed to Carta's Deal Docs team, so they can review and catalogue supporting documentation.

Who does this impact?

Fund Admins now have quicker, more efficient ways to send out SOIs to kickoff financial reporting, and track where each of their entities are in the process. They can spend less time keeping track of multiple email threads and keeping mental lists of which assets are ready to go and which need to updated.

Fund Managers can also view their SOIs by fund and directly request changes at any time, within Carta as needed, ensuring asset valuations are up to date throughout the year.

What’s next?

The team is working to add more in-app methods for funds to easily to keep their investment valuations up to date, such as note conversions, further reducing the time delays from back and forth emails, and ensuring better expediency and accuracy for valuation updates.

Whitney Knowlton

4 years ago1/19/2022

Equity Value Settings

What's new?

You can now select how equity value is displayed in the Scorecard and communicated to employees in Total Rewards in the new Equity Settings section in the General Settings page.

How to use

Navigate to Settings in the top navigation and then click on the General Settings tab on the left-side navigation.

In the Equity Settings section, there are two options:

  1. Net equity value - The in-the-money value of all equity grants (i.e. net of any exercise costs). RSUs assume a strike price of zero. This is the recommended setting for most situations.
  2. Notional equity value - This is the gross value of the equity (i.e., shares granted times the equity share price).

NOTE: When using the Net equity value option on the Bands page, Total Comp will always display the notional (face) value of equity according to your set equity share price as exercise costs are only taken into consideration for individual equity awards.

Prior to this update, all equity value was calculated only using the notional value method. We recommend customers review compensation philosophy with their teams to make the determination on the best methodology for your unique circumstances.

David Lichtenstein

4 years ago1/12/2022

IFRS Initial Release - Financial Reporting

What’s new

Companies using our newest version of the financial reporting tool can now report following International Financial Reporting Standards (IFRS).

This is the first release of our IFRS reporting that includes:

1. Tranche based valuations

2. FIN28 amortization

3. Correct relationship valuation methodology (differs from US GAAP)

4. Stakeholder country field added to reports

5. Disclosures

6. Stock-based compensation expense journal entry

7. Report error validations specific to IFRS reporting

Later releases will include:

1. In-app custom assumption overrides

2. Forfeiture rate by grouping

How it works

When going to create a new expense scenario, there is now an additional step where users can select which reporting standard they want that scenario to follow. Users have the ability to create multiple scenarios to support both IFRS and US GAAP.

Once the scenario is created users can create both SBC expense reports and disclosure reports that follow the standard and give supporting calculations.

Who this affects

Private and public companies using our new financial reporting tool.

Timing

Available for legacy V1 IFRS users and beta customers. If you have a customer that is interested in being a beta user, reach out to Jess Carthey via slack.

GA will begin with the second release which includes in-app custom assumptions.

Jess Carthey

4 years ago1/11/2022

Total Comp Benchmarks Version 2022-01-10

What’s new?

We've updated the Salary bands for the Engineering, Data, and Research job areas to reflect market changes and improvements to our benchmarking model.

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:

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

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

What's next?

On January 21, we will be launching a new enhancement to the Plan feature that will let you set your target market position (25th, 50th, or 75th percentiles) for salary and equity by job area. Stay tuned for this major release!

Jeffrey Glusman

4 years ago12/21/2021

Employee ID Matching Tool

What’s new?

There is a new way for Cap Table Admins to manage Employee IDs.

This is more than just an import; it is a matching tool that will make it easier to match the Employee ID with the indented Stakeholder in Carta.

Why is this important?

The Employee ID can clearly indicate that employee #123ABC on the HRIS or another system is the same as the Stakeholder #123ABC on Carta.

The Employee ID matching tool will compare Employee ID, First Name, Last Name, and email from an external source to the records in Carta. If all of the data between the two sources match exactly, then the Employee ID will be automatically saved in Carta. If some of the data matches, like Last Name and Email but not First Name, then those matches will be shown as a pending match some the Cap Table admin to confirm if the records are the same across two systems.

How it works

This tool is available to a user with the role of Legal admin or Company Admin. It is under the Stakeholders dropdown > Stakeholder Updates > Employee ID Matching.

Step 1: Add External data

Download the template, and populate it with employee IDs, First Name, Last Name and email from the Employee ID source system (typically an HRIS or Payroll system). Upload this data into Carta as a CSV file, or Copy/paste directly into the matching tool.

Employee ID, First Name, Last Name, and email are all required for this upload.

Step 2: External Data Source

Once the data is uploaded, it will run through the automatic matching process. If the data is the same between the external source and Carta, then the Employee ID will automatically be updated.

Step 3: Review Pending Matches

If the data from the external source matches the data in Carta, then approve the suggested match. There is also an option to select a different Stakeholder or to clear it.

Step 4: Review and save

Jessica Ray

4 years ago12/20/2021

1099B Cost Basis Report available to Company Admins

What’s new?

We are releasing a report to all Private Market companies for administrators to review their certificate cost basis and original acquisition dates. This report will allow administrators to view cost basis data prior to the delivery of 1099B tax statements to stakeholders by mid-February.

How it works

This in-app report is available by navigating from Capitalization -> Reporting -> Form 1099b cost basis report.

Administrators will be able to view columns like stakeholder details, certificate ID's, quantity of shares sold, date acquired (original acquisition date), proceeds, gain/loss, and including various cost basis fields:

From this report, Issuers can identify which certificates need to be changed and/or excluded from tax filing, and will have the opportunity to correct the data until late-January.

Who does this impact?

This report will be available to individuals with role permissions of Company Admin, and including Company Editors.

What’s next?

In the next month, Carta's Liquidity team will be reaching out to ensure that data has been reviewed and is considered approved by Issuers for generating 1099B statements. Stakeholders will be able to access tax statements in their portfolios by mid-February.

Vibhu Mahajan

4 years ago11/18/2021

New "Firm Management" page

What’s new?

Today, we are rolling out a new homepage for Carta Fund Admin GPs. The new Firm Management page is the first step in a series of new features we’ll be implementing to simplify the GP experience on the platform.

How it works

Instead of landing on the Firm Overview page when logging in, GPs will now see the new Firm Management page. From this page GPs can easily:

Who does this impact?

The new homepage will be available to all Carta Fund Admin GPs. This has no impact on the LP experience, LP Portal-only experience, or free-firm experience.

What’s next?

Over the next few weeks, the team will be working on adding more functionality and features to the page. Stay tuned for more details

Kali Borkoski

4 years ago11/10/2021

Returning LP Experience in Closings

What's New

We simplified the experience for returning LPs filling out subscription documents in Carta’s Closings Tool. With most of their information pre-filled, LPs can fill any remaining info & sign subscription documents with just a few clicks.

How it Works

When returning LPs are prompted to fill out subscription documents, we will pre-fill their documents if they’re investing with the same entity or individual they’ve previously filled out subscription documents for. This is especially useful for LPs that have investments on Carta both as an individual and through multiple entities like trusts or LLCs.

This is a big win for fund managers that are launching multiple funds or SPVs with the same LP base that are looking for a streamlined experience for their LPs.

Who this affects

Spencer Holton

4 years ago11/9/2021

Tracking Share Class Changes

Private market issuers that go-live on or after 11/09/2021 can now track updates to company share classes’ rights and preferences as they are changed over time. This feature will roll out to other issuers in the next few weeks.

Users with the Legal administrator permissions will be able to make changes to the share class details. Users with the Company editor or Company viewer permissions will only be able to view the share class details.

Experience Overview

  1. Navigate to Securities > Shares.

  2. Click Manage share classes and select Create/edit share classes.

  3. The in-app spreadsheet loads in view-only mode, to prevent accidental input, which is indicated by the grey rows.

  4. Create a new share class by clicking on the related button on the top-right of the screen.

  5. To make edits to the share class details, click the Edit to the right of the AOI version date and name. If editing from the active AOI version, Admins will have the ability to reflect both a clerical error or amendment

  6. If you are editing a past AOI version, Admins will only be able to make edits because of a clerical error.

  7. If reflecting an amendment, Admins will be able to upload the related Articles of Incorporation (AOI) or select one from the Library page. In addition, a name can be added to the AOI version.

  8. Click Continue to save.

  9. At this point, the Admin can make changes in the spreadsheet. The side-panel will expand to show helpful content related to the selected cell.

Cells that are painted light gray cannot be edited because the data may be in-use, a calculated value, or not applicable. Respectively, examples include share class names, the calculated outstanding value, and conversion price for common shares. Reference your AOI or contact your legal partner if you need help filling out this spreadsheet.

  1. After edits have been completed, click Finish editing and save.

Carta will check your entries for any errors and provide actionable messaging to help you make corrections.

  1. Review the summary of changes, then click Confirm and save. No email notifications are sent due to the changes.

  2. Admins can navigate between AOI versions with the AOI version selector, which will show the filing date and version name as dropdown options.

Carta will be making improvements to tracking the company’s cap table, financing history, and reporting in the next few months to incorporate time-versioned share class information.

Have questions? Read about FAQs in our support article.

Alex Chen

4 years ago11/4/2021

409A valuation data shared with Investors

What's new?

Portfolio companies can now share financial and cap table information with their Investors when their 409A valuation is complete. If you've been shared this data, you can view and download it directly from your Carta account.

How does it work?

When your portfolio company accepts their Carta 409A valuation, we ask them if they want to share some of the data used in the valuation with their Investors to help their investors stay up to date on the company's financial situation and to help streamline some of the jobs needed to be done on the Investors side, such as the ASC 820 valuation.

The portfolio company will select which Investors to share the data with:

If you were one of those Investors that was shared the 409A data, you will then receive an email notifying you of the new document that has been shared and will be able to see it in your Documents tab under that portfolio company in Carta!

What information will be shared?

Historical financials

Information about the company's last twelve month revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization) as well as the previous twelve months revenue and EBITDA. Since the 409A valuation is a valuation of the company at a point in time, the data used is as of a specific date. For example, Meetly conducted their 409A valuation as of 03/01/2019 (this is their valuation date). For the historical financials, the company provided the last twelve months (03/01/2018-2/28/2019) and the previous last twelve months (03/01/2017-02/28/2018).

Summary financial forecast

In addition to their historical financials, the company will also share the projected next twelve month's revenue and EBITDA. Using the same example above, this would mean Meetly has shared 03/01/2019-02/29/2020 financial projections for revenue and EBITDA.

Cash and Debt

The company will also share the cash and debt balances as of their valuation date. In the example above, this would mean Meetly has shared their cash and debt balances as of 03/01/2019.

Summary level ownership information

Some cap table information will also be made available, which includes access to share class level information but will not contain any information about share holders. Here's what you'll see as an investor:

Industry sector

Information about what industry the company operates in will also be shared. This is the industry information that was used to conduct the 409A valuation and may represent the current industry the company operates in. At Carta, we have preset industry lists that are used the 409A valuation. Should "N/A" appear next to industry sector for your shared data, it means the 409A valuation used a custom industry set and this information will not be made available.

Time to exit

This represents the number of years until the company expects to have an exit event. 409A valuations are capped at 5 years for the time to exit so keep this in mind when reviewing this estimated exit term.

What information will NOT be shared with me?

This document will not contain any information about the concluded FMV, latest preferred price, any rights & preferences the preferred share holders have, strike prices or purchase prices, and any information about a specific shareholder.

Is this available to me?

The feature is available to any investor that has been shared the 409A valuation data. If you aren't seeing a document in your account, it may be that your portfolio companies either have not received a new 409A valuation since the feature has been released or have not shared the data with you yet.

EJ Jacoby

4 years ago11/2/2021

LP Status Tracker in Closings

What's New

We launched a new LP tracker in our Closings Tool so fund managers can easily track the status of each LP filling out subscription documents. We clearly show exactly where the LP is in the process and provide instructions for what each LP needs to do to progress and finish their subscription.

How it Works

In the Closings Tab of the entity you’re fundraising for, you’ll see one these six statuses assigned to each LP:

To get more detail about the specific LP, you can click on each status and get more detailed information about the LPs status such as:

Additionally from this modal you can manage LP access to your fundraising data room and see who has been interacting with the information in each data room.

Additional Resources

Check out that walks through the step-by-step process of adding LPs to the closings tool.

Is this available to me?

This is now available to any fund managers using Carta's Closings Tool. The Closings Tool gives LPs a quick and easy way to fill out Fund and SPV subscription documents.

Spencer Holton

4 years ago10/27/2021

Adjust taxes for option exercises

What’s new

Companies can now adjust taxes for option exercises previously approved in Carta.

Legal administrators can navigate to the Exercises ledger (Transactions > Exercises) and select "Adjust taxes" within a ledger row dropdown to find the new tool:

How it works

The "Adjust taxes" tool will not be available for option exercises in the "Requested" status since option exercise approvers can adjust taxes as part of the exercise approval workflow.

For ACH option exercises already approved by the company or for company-entered manual exercises, the "Adjust taxes" tool will be available for use.

After a legal administrator selects "Adjust taxes" from the Exercises ledger, they'll see the following modal:

The legal administrator will be asked to provide a reason for the adjustment. Next, the following actions are available:

Note that new tax types can't be added from this modal. If you'd like to add a new tax type to the exercise, add it first in the Tax rules page (Compliance > Tax rules) and then come back to the "Adjust taxes" tool to add it to the option exercise.

Once the adjustment has been saved, both the company and the stakeholder will see a blue banner when viewing the option grant. The banner contains information about the newly adjusted tax amount and exercise cost in addition to when the adjustment was entered in Carta:

Adjusted tax amounts will also be reflected in the "Exercised and settled report" and the "Tax withholding report" (Capitalization > Reporting).

For more information, check out the support article for the new "Adjust taxes" tool: https://support.carta.com/s/article/adjust-taxes-option-exercises

Who this affects

Private and public companies that issue option grants.

Timing

Available to all companies now.

Vince Lo

4 years ago10/14/2021

Option exercise settings for exercises initiated and settled on Carta

International optionholders of US companies can now exercise online via wire transfer to Carta. As a result, all US companies can now settle exercises through Carta, for both ACH and wire transfers payments. Carta conveniently manages payment reconciliation and payment issues such as insufficient funds or overpayments. This new feature is controlled via the new Transaction Settings page.

Who this affects:

What's new:

Action required:

Timing:

What if the company decides not to enable the tool?

The current company or transaction settings will not be impacted. Remember that enabling Transaction Settings is required for international optionholders to submit online wire exercises!

Resources: