How to manage cap tables, compensation, and valuations
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In this episode of the Tekpon SaaS Podcast, host Cristian Dina sits down with Peter Walker, the head of insights at Carta, to explore the intricacies of managing cap tables, compensation, and startup valuations. Carta, a pioneering equity management platform, was established to address the challenge of non-digitized cap tables, aiming to provide streamlined and secure ownership transparency, valuation, and transaction services for emerging companies.
What does Carta do?
Founded with the mission to simplify startup ownership management, Carta has expanded significantly over the years. The company now boasts a workforce of approximately 1,400-1,500 employees and supports nearly 50,000 startups globally. Carta’s platform facilitates the management of a staggering total equity value of $3 trillion and serves over 1.2 million employees. One of the platform’s standout features is its ability to provide startup employees with tools to manage ownership stakes, exercise grants, and navigate tax complexities.
Carta’s product offerings, such as Carta Cap Table, Carta Total Compensation, and fund administration, are central to its SaaS model. The platform manages cap tables and advises on fundraising on safes, setting up data rooms, and issuing equity to employees. Peter underscores the importance of offering employees equity as both an incentive and a means to attract top talent. He emphasizes the practice’s prevalence in the US and its potential benefits for early employees who might later become founders themselves, further investing back into other angel projects and contributing to the ecosystem.
Peter’s role as the Head of Insights
Peter Walker delves into his journey at Carta, highlighting the organization’s focus on private startups across various sectors, including B2B SaaS, fintech, consumer, biotech, and health tech. Carta has chosen to refrain from dealing with public companies, instead dedicating its resources to enhancing private startup operations. Highlighting industry trends, Peter notes the recent challenging fundraising environment for VC-backed startups, which, despite difficulties, shows signs of improvement in recent quarters.
Much of the episode is devoted to Peter Walker’s journey and his challenges building Carta’s brand. Before joining Carta, Peter’s career was steeped in data and early-stage startups. This background equipped him with the expertise to lead Carta’s insights division. One notable point in his career was his contribution to The Atlantic magazine’s COVID project, where he visualized and charted COVID-19 data. This role reinforced his belief in leveraging data for marketing and brand-building.
Insights from 40,000+ startups
Discussing fundraising and industry trends, Peter illuminates the significant portion of investment funds directed towards AI companies—25 % to 27% of all funding on Carta last quarter. However, he also notes that non-AI companies are successfully raising funds. AI’s influence spans various sectors like biotech, health tech, robotics, and energy, indicating its widespread applicability. Moreover, fintech and robotics were highlighted as particularly dynamic industries in 2021, with biotech maintaining strong performance.
Peter also touches on financial factors, such as interest rates, in startup fundraising. Lower interest rates historically lead to increased investment in startups. The landscape for mega funds like Andreessen Horowitz provides another layer of complexity, as these established funds find it easier to raise capital than emerging managers.
Carta extends a complimentary data newsletter, a valuable resource recommended for founders post-incorporation. This newsletter is part of Carta’s broader strategy to use data insights to enhance users’ decision-making. Peter highlights his responsibility to integrate these insights into Carta’s products and offer them freely on carta.com.
The episode underscores Carta’s significant role in simplifying startup equity management and the continuous effort to tailor their offerings to meet founder needs. Peter Walker’s insights offer a comprehensive look into the evolving environment of startup equity management and the broader implications of industry trends and challenges. This episode provides an enriching overview for listeners interested in the intersection of technology, startups, and financial management.
