Carta (software)
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| Carta (software) | |
|---|---|
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| Name | Carta |
| Developer | Carta, Inc. |
| Released | 0 2012 |
| Operating system | Web application |
| Genre | Financial technology |
| Website | https://carta.com |
Carta (software). Carta is a cloud-based financial technology platform specializing in capitalization table management, equity compensation, and fund administration for private companies, startups, venture capital firms, and institutional investors. Founded in 2012 by Henry Ward and Manu Kumar, the platform has become a dominant infrastructure provider in the private markets ecosystem, facilitating tasks from stock option issuance to liquidity event planning. Its services are integral to modern corporate governance and financial compliance, serving a global client base that includes prominent Silicon Valley firms and investment funds.
Overview
Carta operates as a comprehensive software as a service (SaaS) platform designed to digitize and streamline ownership and financial operations for the private equity sector. The system centralizes a company's securities data, providing a single source of truth for shareholders, boards, legal counsel, and financial auditors. By automating complex processes like 409A valuations and cap table modeling, it reduces administrative burdens and mitigates compliance risks associated with regulations like the Internal Revenue Code and Securities and Exchange Commission rules. The platform's evolution reflects broader trends in the fintech industry toward digitizing legacy financial services.
Features
Core functionalities of the platform include detailed cap table management, which tracks common stock, preferred stock, stock options, restricted stock units, and warrants. It integrates with services for equity plan administration, facilitating the issuance and exercise of options for employees. For venture capital and private equity firms, Carta offers fund administration tools, handling limited partnership agreements, capital calls, and distribution waterfall calculations. Additional features support liquidity programs such as tender offers, secondary market transactions, and 409A valuation services provided through its subsidiary, Carta Valuation. The platform also includes tools for board meeting management and electronic signature integration.
History
The company was founded in 2012 in Palo Alto, California by Henry Ward and Manu Kumar under the original name eShares, with a focus on digitizing stock certificates. Its early growth was fueled by participation in the Y Combinator startup accelerator program. A significant rebranding to Carta occurred in 2017, signaling an expansion from cap table software into a broader financial infrastructure platform. Major milestones include the 2019 acquisition of London-based Capdesk, aiding European expansion, and the 2021 launch of CartaX, a private securities trading platform. The company has raised substantial venture capital funding from investors like Andreessen Horowitz, Lightspeed Venture Partners, and Spark Capital.
Business model
Carta primarily generates revenue through software subscription fees based on a company's shareholder count and valuation tier. Additional revenue streams include transaction fees from liquidity events facilitated on its platform, such as secondary market trades and tender offers. Its Carta Valuation arm charges for independent 409A valuation reports. For venture capital clients, the company earns fees for fund administration services, which scale with assets under management. This SaaS-plus-transactions model aligns its success with the growth and financial activity of its clients in the private markets.
Reception
The platform is widely regarded as the industry standard for cap table management, praised for bringing transparency and efficiency to a traditionally opaque and manual domain. It has received positive coverage in publications like The Wall Street Journal and TechCrunch for modernizing private company corporate governance. However, the company has faced criticism and regulatory scrutiny, particularly regarding the operations of its CartaX trading platform and conflicts of interest between its software and transaction businesses. Despite these challenges, its widespread adoption by major firms like Benchmark and Union Square Ventures underscores its entrenched position in the startup and venture capital ecosystem. Category:Financial technology companies of the United States Category:Cloud computing Category:2012 software