How UserEvidence simplifies equity management and compliance in Carta

UserEvidence, a business-to-business customer evidence platform based in Jackson Hole, Wyoming, chose Carta for its ability to simplify equity management. The company, founded in 2020, has more than a hundred stakeholders after raising a Series A in 2023.

CEO Evan Huck appreciates Carta because it helps make it easy for him to maintain compliance and collaborate with investors and other partners. He uses Carta to track equity, determine compensation for new hires, maintain tax advantages, and manage investor relations.

UserEvidence has relied on Carta since its beginning. Huck chose the platform for its industry-leading reputation and high investor adoption.

“We didn’t even consider other options. Equity management is not something you want to mess around with, and Carta has such a good brand presence that it’s just what you think of,” says Huck. “We wanted to show up as an adult company to investors, so it was the obvious choice.”

Carta simplifies internal workflows for UserEvidence, so that Huck can quickly organize, review, and share equity data. He values having a single platform that accountant and law-firm partners can access and understand.

“As CEO, I work with our accounting and legal teams, and our lawyer does most of the equity updates in Carta, which is great,” says Huck. “Managing equity is not the best use of my time and where I can create the highest leverage, so carving that off to our partners is huge.”

Huck’s confidence in Carta allows for stronger time management and strategic upleveling. He believes that without Carta, document management burdens would plummet his efficiency and constrain UserEvidence’s financial position.

“I know it’s taken care of and I can verify that it was done correctly. There’s peace of mind where I’m not going to worry about any costly errors. And I’m not spending very much time on it at all, which is exactly the scenario I want, because there’s plenty of other stuff I need to spend time on.”

Equity forecasting helped minimize dilution

“Equity is a big tool for a startup. It’s really helpful for planning, including how much we should raise, because you go into it thinking about increasing the size of the options pool,” says Huck.

Carta’s forecasting capabilities give Huck a clear view into how much equity has been granted and how much remains. That clarity proved critical during a recent fundraise.

“We minimized dilution, because we hadn’t used much of our options pool. We negotiated with new investors from the position that we shouldn’t have to increase the pool because we already had plenty left.”

Huck and his team make smarter, faster compensation decisions with Carta, too. Carta Total Compensation provides the largest set of private-company equity data available, using machine learning to ensure compensation benchmarks reflect market changes.

“When hiring, I can understand where we’re at with our options pool by navigating to see what kind of equity similar employees have,” says Huck. “The benchmarking data that Carta has is just amazing. It lets us make sure that we’re targeting the right competitive range when we do equity compensation. It’s a good way to create consistency in equity compensation and makes my tactical deployments as a CEO more effective.”

A data-driven approach helps UserEvidence attract the right talent while improving the employee experience.

“The visibility Carta provides to our employees lets them understand their equity chunk and what it’s worth. I love some of the modeling features where you can see what it’s worth in different scenarios—it’s a motivating factor for employees.”

QSBS compliance attracts investors

The sense of control extends to compliance. Huck considers eligibility for the Qualified Small Business Stock (QSBS) tax exclusion a priority. The tax advantage allows some investors to potentially exclude all or a significant portion of capital gains from taxable income when certain conditions are met.

“I feel a lot more comfortable using Carta to stay on track with our QSBS status. It gives us really high confidence and we can transfer that confidence to investors,” says Huck. “They’re concerned with tax liabilities, so tax benefits keep them interested in UserEvidence.”

With Carta, companies and individuals can get a QSBS attestation letter to support their tax filings. Annual QSBS attestation provides founders, employees, and investors with reliable documentation if the Internal Revenue Service (IRS) questions their QSBS benefit.

Beyond the platform, Carta’s customer teams are there to help Huck when he needs it.

During a recent 409A valuation, UserEvidence experienced a material event. If its valuation didn’t reflect the situation, potential future investors could have accuracy concerns.

“I pinged the Carta team and within hours, we had an updated 409A. Usually, that kind of thing takes weeks and costs so much money, so the level of speed and responsiveness was huge,” says Huck. “Some people might expect Carta to give impersonal service because it’s a big company, but the team very quickly understood all the context, updated the valuation, and provided a new report.”

Carta aligns with UserEvidence’s brand values

“At UserEvidence, the concept of trust is not only important to prospects and customers, but to all our stakeholders, investors, and employees. Transparency is one of the key ingredients to that trust,” says Huck. “Having a platform like Carta communicates that same level of trust and transparency. It aligns with our brand promise at UserEvidence, as well.”