With Alexis Teixeira, April Underwood, Henry Ward, Jessica Verrilli, and Mita Mallick
“At Carta, our mission is to create more owners.” This is how Carta’s founder and CEO Henry Ward began the opening session of the 2022 Carta Equity Summit. He went on to explain that we live in a world where everything—startups, office buildings, homes, railroads, patents—is owned by someone. Labor is transient and disappears with the laborer, but ownership is permanent. Employees sit on the debt stack of a firm, while owners sit on the equity stack. And in a growing company, the equity stack compounds faster than the debt stack.
How can we get people more ownership? This is something we think a lot about at Carta: What if issuing equity were as easy as paying payroll? And ultimately, how can we pull eight billion people out of the wage-earning stack and into the equity stack?
A few Carta employees talked about what equity means to them: having a seat at the table, freedom, and access to opportunity. One employee said the equity she earned in her first role after college helped her cover her parents’ mortgage so that her father could retire and take care of her mother during an illness.
April Underwood and Jessica Verrilli, two of the founders of #ANGELS, talked about how their partnership with Carta led to the Equity Report. The six #ANGELS founders had been operators together at Twitter. For many of them, their IPO was a liquidity event that first gave them the ability to consider angel investing, as many of their male colleagues did, and they joined forces.
The #ANGELS realized that while people were talking about employee diversity and salary gaps, representation in the ownership structure of companies was often overlooked. So they wrote a blog post called The Gap Table about diversity and inclusion in equity ownership. They suggested that Carta, as a company managing cap tables, would be well situated to get at this data. Henry saw the post and commented, “let’s chat”—and things took off from there.
Alexis Teixeira, Carta’s deputy chief of staff, share’d what’s new in the 2022 Equity Report:
Mita Mallick, Carta’s head of diversity, equity, and inclusion, joined to dive into the data. From 2018 to 2022, there was a small but important increase in new hires who are Black, with slightly more Black women than men hired. These numbers are still substantially less than what we’d expect if hiring reflected the overall U.S. labor force: Black employees make up 7% of equity-receiving employees, but are 12% of the labor force. They also receive only 3% of the value of equity grants.
There’s been more change in new hires by race and ethnicity at entry- and mid-level roles. From 2018 to 2022, the entry- and mid-level hires who identify as Black grew from 6 to 11%. In contrast, the percentage of director and executive hires who are Black has only grown from 3 to 4%. Latine employees also saw a similarly small increase at entry- and mid-level roles. For Mita, these trends offer a glimmer of hope that we’re progressing in small but meaningful ways in diversifying equity and opportunity.
Women hold less equity than men: While women make up 47% of the U.S. labor force, 36% employees receiving equity are women, and only 28% of equity value goes to women. We also know that Black and Latine women receive the least equity of all groups. The well-researched pattern of men with children receiving the “fatherhood premium” in salaries also extends to equity compensation. Fathers—but not mothers—tend to receive a bump in equity compared to childless employees.
Alexis asked Jessica and April about the opportunities for change highlighted by the report. While representation is increasing for Black employees, they pointed out, ownership is still lagging. April said that the caregiving piece is personal for her, as she has become a mother since this report was started. “I’m not happy with the results, but am happy to see the work being done, because now we have a baseline from which to improve.” Jessica shared her hope that as more inclusive and equitable companies and cap tables are built, wealth will flow to a more representative group of people—who can then deploy their resources and influence as they see fit, wherever they are.
A discussion with founding partners who have built their careers from finance to fund management.
Hear from mission-driven leaders on the impact of our changing economic environment, diversity and equity in the workplace, and board representation.