YCombinator\u2019s Series A checklist<\/a> goes into more technical detail about what investors expect to see from companies before they invest.<\/p>\r\n\r\n\r\n\r\n Remember, it helps to have your cap table current and verifiable at the time of due diligence. When you onboard with Carta, we will help you identify and correct any cap table errors<\/a>. If you\u2019re already on Carta, your cap table stays up to date; every transaction you do on Carta updates your cap table.\u00a0<\/strong><\/p>\r\n\r\n\r\n\r\n If you\u2019re planning to grow, you need cap table software. The longer you wait to issue securities, manage your cap table, and get a 409A valuation, the more room for errors to pile up. Every new fundraising event affects dilution and potential payouts. When you get a term sheet from investors, you can plug those exact terms into Carta\u2019s scenario modeling tools to see the impact the terms will have on holdings<\/strong> for founders and employees.\u00a0<\/p>\r\n\r\n\r\n\r\n Once you take on more capital, this is considered a \u201cmaterial event\u201d and you will need a new 409A valuation<\/a>. This means you\u2019ll need to find a 3rd party provider, get your financials in order, gather documentation<\/a>.<\/p>\r\n\r\n Remember: you cannot issue new option grants until you refresh your 409A valuation.<\/p>\r\n\r\n\r\n\r\n Carta makes it easy to electronically issue grants individually<\/a> and get board approval<\/a> on option grants right from the platform.<\/p>\r\n\r\n\r\n\r\n In the early stages of the fundraising process, before the term sheet is received, you can remind your employees that they can exercise<\/a> their options. If the valuation of the company increases in the new round, exercising before the terms arrive may provide specific tax advantages for your employees.\u00a0<\/p>\r\n\r\n\r\n\r\n Exercising options on Carta is simple<\/a> and can even be done in our mobile app.<\/p>\r\n\r\n\r\n\r\n Carta\u2019s cap table<\/a>, unlike a spreadsheet, is easy to manage and share<\/a>. Many venture capitalists already track their portfolios on Carta and expect to see their entire portfolios in one place. You definitely don\u2019t want to send investors paper certificates, which are hard to track and easy to lose. Carta\u2019s certificates are digital and always available. You can also share your cap table with investors on Carta before you go out to fundraise from new investors.<\/p>\r\n\r\n\r\n\r\n\r\n\r\n Work with Carta before you start fundraising to ensure your cap table is accurate and up to date. You\u2019ll use software that investors and shareholders already know and love. It\u2019s never too early to get started, and we can grow with you at every stage.\u00a0<\/p>\r\n\r\n\r\n\r\n We\u2019d love to tell you more<\/a>, or you can watch our videos to help answer your questions<\/a>.\u00a0<\/p>\r\n\r\n\r\n\r\n\r\n\r\n DISCLOSURE: This communication is on behalf of eShares Inc., d\/b\/a Carta Inc. (“Carta”). This communication is not to be construed as legal, financial or tax advice and is for informational purposes only. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein.<\/p>\r\n","protected":false},"excerpt":{"rendered":" Founders and CFOs: here\u2019s what you need to do before raising your next round and how Carta can help.<\/p>\n","protected":false},"author":72,"featured_media":2104,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[10],"tags":[11,36,106],"acf":[],"_links":{"self":[{"href":"https:\/\/www-staging.carta.com\/sg\/wp-json\/wp\/v2\/posts\/1541"}],"collection":[{"href":"https:\/\/www-staging.carta.com\/sg\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www-staging.carta.com\/sg\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www-staging.carta.com\/sg\/wp-json\/wp\/v2\/users\/72"}],"replies":[{"embeddable":true,"href":"https:\/\/www-staging.carta.com\/sg\/wp-json\/wp\/v2\/comments?post=1541"}],"version-history":[{"count":0,"href":"https:\/\/www-staging.carta.com\/sg\/wp-json\/wp\/v2\/posts\/1541\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www-staging.carta.com\/sg\/wp-json\/wp\/v2\/media\/2104"}],"wp:attachment":[{"href":"https:\/\/www-staging.carta.com\/sg\/wp-json\/wp\/v2\/media?parent=1541"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www-staging.carta.com\/sg\/wp-json\/wp\/v2\/categories?post=1541"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www-staging.carta.com\/sg\/wp-json\/wp\/v2\/tags?post=1541"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Start off right with cap table software
![\"\"](\"https:\/\/www-staging.carta.com\/sg\/wp-content\/uploads\/sites\/9\/2019\/08\/captable_summary_edited-1.png\" "\\"\\"")
<\/h2>\r\n\r\n\r\n\r\n
Carta\u2019s plans are matched to company stages. If you\u2019re just getting off the ground, check out our Starter plan. Companies with 25 stakeholders or less that have raised up to $1M can work through a lawyer and set up their cap table with our free Launch<\/a> plan, too.<\/p>\r\n\r\n\r\n\r\nRun pro-forma scenarios<\/h2>\r\n\r\n\r\n\r\n
![\"\"](\"https:\/\/www-staging.carta.com\/sg\/wp-content\/uploads\/sites\/9\/2020\/06\/scenario.png\" "\\"\\"")
Carta\u2019s scenario modeling<\/a> has robust reports and allows you to estimate payouts by share class and run waterfall models<\/a> that can help you understand how your decisions today will impact the company later. Without Carta, you\u2019ll have to build or find a suitable scenario modeling spreadsheet, and duplicate lots of information.<\/p>\r\n\r\n\r\n\r\nGet ready for your 409A valuation<\/h2>\r\n\r\n\r\n\r\n
![\"\"](\"https:\/\/www-staging.carta.com\/sg\/wp-content\/uploads\/sites\/9\/2018\/04\/409a_valuation_data-1527723066172.jpg\" "\\"\\"")
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If you join Carta before you raise a round, the 409A valuation<\/a> is even faster, since we already have all the information we need to complete your audit-defensible 409A. With Carta, we do a\u00a0409A valuation<\/a> for you every year and every time you have a material event, included in our Starter, Growth, and Scale plans for no additional cost.\u00a0<\/p>\r\n\r\n\r\n\r\nIssue grants to recent hires<\/h2>\r\n\r\n\r\n\r\n
![\"\"](\"https:\/\/www-staging.carta.com\/sg\/wp-content\/uploads\/sites\/9\/2019\/08\/issue_securities-1.png\" "\\"\\"")
You may want to issue any pending options grants<\/a> to new hires before<\/em> you start fundraising. If the new round increases your valuation, employees\u2019 exercise price will increase too. Issuing grants before you raise ensures that employees actual exercise price matches what you may have communicated in an offer letter<\/a>.\u00a0<\/p>\r\n\r\n\r\n\r\nRemind employees they can exercise their options<\/h2>\r\n\r\n\r\n\r\n
Make it easy to collaborate on (and update) your cap table<\/h2>\r\n\r\n\r\n\r\n