Learn everything you need to know about section 409A of the internal revenue code. From what is a 409A valuation to 409A methodologies and process.
At Carta we spend a lot of time thinking about how to better educate employees on startup equity. Even new hires at Carta often don’t understand the equity compensation component of their offer letter. So we decided to create a new offer letter.
I have included highlights of our offer letter with captions below. We are making available a full example of our offer letter. I have also included some highlights below with captions. I hope this will encourage transparency in more companies and help candidates who are currently interviewing at startups. All numbers are accurate for Carta as of 5/18/17.
Summary of offer
Simplified graph of our capital structure and breakpoints
Formula for calculating option payouts for exit values greater than $77M
Tranche-by-tranche table of employee’s vesting schedule
Brief advice on how we encourage employees to think about their equity
Overview of benefits
Home office address and weekly commute schedule (only for California offices)
Introduction to first week’s schedule and 1-on-1s
Required legal language regarding option details and pending board approval
Talk to an equity expert to learn how Carta can help you be more transparent about employee equity.