Carta Act III

In October 2014 we were fortunate to lead the Series A financing in a company then called eshares. At that point the company was offering cap table management services for private companies in the cloud, at the time a novel idea. About a year later the company rolled out 409A valuation services, quickly becoming the largest, and generally the fastest and cheapest, provider of these services.

In late 2016/early 2017, under the leadership of CEO and co-founder Henry Ward, the company entered two new markets: i) employee stock option services for public companies and ii) fund administration and other investor services for venture capital and other forms of private equity. In doing so, the company rebranded as Carta in Q4 2017, effectively beginning Act II.

Act II was short. Anyone who has worked with or interacted with Henry knows that moss doesn’t grow under his feet. He’s on a mission to change the way private markets operate.

Today begins Act III . The company is announcing a large Series E financing led by a16z and Marc Andreesen is joining Carta’s board. While the amount and valuation will garner headlines, the real news is the use of proceeds:

We’ll use our new funding to enable liquidity across our network. Private markets are so illiquid that founders and employees often wait a decade for an IPO to access liquidity. We think it’s time for this change.

Private market liquidity is a hard problem today unless you’re a large institution holding shares in a “hot” company. At USV, we’re actually selling some shares in this round to manage a potential liquidity issue we have in our 2014 Fund. While there is a lot of work to do, we believe that in a few years Carta and its partners will unlock the keys to more robust private market liquidity for all participants, including smaller investors and individual employees. We’re excited to be investors in this Act III project. Stay tuned.

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