EquipmentShare partnered with CartaX to offer a unique employee liquidity program, and became the first company to launch a Carta Cross on the CartaX platform, outside of Carta, Inc.
EquipmentShare is a digitally native rental business that recently raised Series D financing to continue building connectivity for the construction industry. The company is growing fast—and retaining, rewarding and attracting top talent is crucial to maintain their pace. In September 2021, EquipmentShare held its first Carta Cross auction, which returned millions of dollars in value to early employees and investors.
- EquipmentShare is the first company to launch a Carta Cross on the CartaX platform, outside of Carta, Inc.
- CartaX gave EquipmentShare broad visibility to a diverse set of investors, including venture capital firms, hedge funds, family offices, and direct secondary funds.
- The auction resulted in robust buy-side demand and market-driven price discovery.
- The company is continuing to partner with CartaX to create more opportunities for employee liquidity.
On July 20, 2021, EquipmentShare announced a $230M Series D round of financing. The capital raised will help the company expand its national footprint and launch T3, a new core technology solution for the construction industry.
Following the close of the round, co-founders Willy and Jabbok Schlacks shifted their focus to employees. They wanted to offer a unique benefit that would allow eligible employees to unlock the value of their equity in the company.
Willy Schlacks, co-founder and president
Employees are the foundation of every successful business. With the company hiring an average of 100 employees a month, we felt it was important to be able to provide true equity incentives for recruitment and retention purposes—in addition to cash compensation and a great company culture.
EquipmentShare turned to CartaX to design a structured liquidity program for their employees, with the following objectives in mind:
- Return value to employees: Help their employees achieve liquidity through the sale of a portion of their vested equity compensation
- Price discovery: Use CartaX to permit controlled bidding of shares in order to gauge market sentiment on their valuation without dilution
- Control and alignment: Maintain long-term shareholder alignment and control over participation
- Investor relations: Expand EquipmentShare’s investor network beyond the traditional venture ecosystems to aid in the strategic growth of the company
Process and timeline
EquipmentShare onboarded on CartaX in August. The CartaX team then analyzed the company’s needs and proposed a liquidity structure, or the total volume that eligible shareholders were permitted to transact. For this transaction, EquipmentShare allowed employees and early investors to sell a portion of their equity based on a set participation cap.
Afterward, the CartaX team helped facilitate meetings between EquipmentShare’s executives and engaged investors to discuss the potential for strategic investments. Once the transaction launched, buyers and sellers were able to confidentially place orders. After 16 business days, the auction closed and settled.
EquipmentShare wanted to share its story with a broader set of institutional investors. The CartaX team leveraged its investor network to arrange a live Investor Day where the company could answer questions about its business and financials. CartaX assisted on the investor presentation and managed the live event end-to-end, including audience experience, investor outreach, speaker prep and logistics. A diverse set of investors were invited to participate in the Carta Cross, including hedge funds, venture capital firms, family offices, direct secondary funds, and other sophisticated investors.
Before the transaction began, investors could access a secure virtual data room to begin their analysis and come prepared with thoughtful questions as the auction approached.
Access to disclosure materials, transaction information, and transcripts of the Investor Day live Q&A were made available to all participants, including employee sellers. To maintain confidentiality of company data, access was granted only to those who signed an NDA on the CartaX platform.
CartaX held a town hall to help eligible employees learn more about the platform and the auction mechanics. CartaX also provided resources to employees on “growth-selling,” a portfolio diversification strategy in which holders sell shares gradually as the price of the company increases. Using the custom growth-selling calculator CartaX provides, sellers could set preferences that automatically generate a set of orders for the Carta Cross auction, rather than having to decide individual sell quantities.
With the Carta Cross, EquipmentShare was able to facilitate liquidity for their employees and solve for price discovery in one transaction.
Jabbock Schlacks, co-founder and CEO
We’re pleased with the level of engagement in our first Carta Cross auction. We achieved our goal of returning value to our employees while attaining a premium to our last funding round.
The company had a high participation rate, with 93% of participating sellers completing trades and 79% of total sell orders filled. On the buy-side, 83% of bidding investors received allocations in the transaction, with most meeting their intended investment goals.
CartaX gave EquipmentShare broad visibility to a new set of investors who were previously unfamiliar with the business. This led to strong buy-side demand. As a CartaX-onboarded company, EquipmentShare now has the ability to offer liquidity to shareholders on a recurring basis.
Willy Schlacks, co-founder and president
We’re proud to lead the private markets with our first liquidity program on CartaX and plan to continue using the platform for future transactions.