RADAR, which powers location infrastructure for products and services, uses Carta for cap table management, 409A valuations, and compensation benchmarking.
When Carta introduced automated submissions for 83(b) elections, RADAR saw an opportunity to extend early exercising of stock options—and the potential tax savings—from executives to all its employees. However, it recognized that early exercising can be complex, and employees need guidance to make informed decisions that align with their long-term financial goals.
Eric Mogil, chief growth officer
I think within two days of hearing about Carta Equity Advisory, we signed up and were onboarded quickly. We’ll never go back. It was one of the easiest software decisions we’ve ever made.
Additionally, RADAR is currently a qualified small business, an IRS designation that can lead to significant tax savings for shareholders of the company’s qualified small business stock (QSBS). Due to the complex nature of QSBS, investors wanted RADAR to provide a QSBS attestation letter—the document that shows the company meets the stock requirements for QSBS—so they could present it to the IRS when needed.
Carta’s platform ‘does it all’
RADAR wanted to provide investors and employees with a QSBS attestation letter and ensure its employees understood the tax implications of QSBS and early exercising through education and tax scenario modeling.
“We started looking at law firms for a QSBS attestation letter,” Mogil said. “But, we loved that we didn’t have to have different firms for our cap table management, 409A valuations, and QSBS attestation letter. The fact that Carta does it all makes things so much easier.”
Plus, Carta goes beyond just providing a QSBS attestation letter. “With Equity Advisory, our employees have access to unlimited 1:1 sessions with a tax advisor who specializes in startup equity,” Mogil said. “They know our latest 409A, can see how much equity and what type each of our employees have, and know which shares are QSBS-eligible,” he added.
Expanded early exercise for all employees
Until recently, filing the paperwork for 83(b) elections was arduous. “Carta made it so we can give early exercise to 60 employees—which is unheard of,” Mogil said. “Normally, you just give it to executives. But because we could e-sign and submit 83(b) elections through Carta and pair that with tax advice, it made it an easy decision.”
“The upside early exercise and QSBS offers employees could be huge, but it’s often misunderstood,” Mogil said. “With Equity Advisory, our employees have the equity education and personalized tax planning they need to make knowledgeable decisions.”
“50% of our team have used the 1:1 equity advisory services, and I haven’t gotten an equity compensation or tax question since,” Mogil said.
“To be able to offer a personal equity advisor to everyone on the team so they can make smart tax decisions and reap the most from their equity compensation is huge,” he added. “For every single startup I advise, I tell them to use Carta. It’s a no-brainer.”
Help your employees navigate equity and tax decisions
Carta Equity Advisory helps employees make informed decisions about their equity compensation and taxes—powered by Carta’s cap table platform. Learn how you can help educate your team. Get a demo now.