Four years ago I wrote broken cap tables. Since then Carta has fixed cap tables for 11,000 companies and counting. We’ve issued securities to over 700,000 shareholders, and electronic securities and cap table software have become ubiquitous.
Software changed how companies manage cap tables. Now, it’s about to change how VCs run their funds.
Money movement is convoluted. Today, VCs can tell a limited partner that they invested $10M and it’s now worth $20M. But that limited partner can’t easily see where their money is invested. A major LP like a university endowment might have four different funds invested in Uber, but they can’t tell you exactly how much they would benefit from Uber’s IPO.
And if you ask an LP how their investment is performing right now, on May 8, they likely won’t have an answer until the end of July. First the quarter has to wrap, then junior accountants have to manually enter data, and then the LP gets the updated IRR, a month after the quarter ends.
This goes the other way too. As a founder, I don’t know where VC money comes from. It could come from my rival university, or worse, an investor that doesn’t align with the ethics of my company.
Founders, VCs, and LPs need transparency.
A better way
We’ve built a fund administration product and team to fix this.
Our ownership network sets us up to solve the problem quickly. About 90% of VC firms in the U.S. have already accepted a security on Carta. And we just follow the model for how we built our 409A business—combining technology and services. Carta automates the manual parts of fund admin, and your firm partners with our experienced fund administrators.
VCs can see real-time IRR instead of waiting for quarterly updates. And they can run capital calls and share documents with LPs. All on the Carta platform.
Carta’s goal is to transform private markets by increasing liquidity and transparency. First, for companies and their shareholders, now for VCs and their LPs.