How to manage valuation updates from Carta portfolio companies

How to manage valuation updates from Carta portfolio companies

Carta fund admin users can instantly be notified about share price updates for portfolio companies that have their cap tables on Carta. As Carta companies publish new share classes or file updated Articles of Incorporation (AOI), funds with "cap basic" or higher cap table access may receive notifications about these updates. Users will have the option to apply these updates to their Schedule of Investments (SOI) immediately.

How does it work?

When a company has its cap table on Carta and raises funding through an equity round, it updates its Articles of Incorporation, creates Stock Purchase Agreements, and updates its cap table data to reflect the new breakdown of ownership and share price.

The Fund Administration team reviews these updates and Fund admin users to whom a Carta company has granted basic, advanced, or detailed access to the cap table will be notified of the updates through email.

Check out this guide to learn how to request cap table access from Carta companies.

The email will contain a link to information such as share class, share price, and impact on fund metrics.

Users can review the updates and their impact on their SOI before accepting the new valuation.

Click Review Share Price Update to view the impact of the updated share price on investment holdings, including gross IRR and multiples. There will be two options to choose from:

Update Valuation (Approving the share price update): In most cases, customers who use last preferred share pricing for their valuations would approve the share price change, and Carta will automatically update their SOI to reflect the new value.

Do Not Update Valuation (Rejecting the share price update): For customers who use a discretionary valuation methodology, or require any further examination or verification of the share price change, they can decline the share price update, and their SOI will remain unaffected.

Whether the share price change is approved or rejected, customers will be given a confirmation screen informing them whether or not their SOI was updated and a button that will take them to their SOI directly.

No further action will be required.

Frequently asked questions about share price updates

Who receives the share price update email?

Email notifications for share price updates are sent to fund admin users at the firm who have investment transaction permissions across all funds.

How can I access information about the new round?

If the company updates its cap table, details about the new share class will already be reflected there or in the incorporation documents.
A link to review the new round information will be included in the email.
If the email is forwarded to a firm member who does not have investment transaction permissions for all funds, they will see an error page when trying to access the link.

What happens if I approve the new share price?

Approving the new share price will update preferred equity assets in the portfolio company to the new value.
This change will be reflected on the Statement of Investments (SOI) for affected funds.
The AOI (Articles of Incorporation) will be attached to the update in Carta.

What happens if I reject the new share price?

If you reject the update, no changes will be made to the asset’s value for any funds holding the investment.
The SOI for those funds will remain unchanged.

Who does this apply to?

Only new fundraising events trigger an email notification.
Email notifications are sent only to fund admin users with at least basic cap table access for the portfolio company.

Can the link or email be resent?

The links in the emails do not expire.
However, fund administrators cannot resend the emails.
If you believe your SOI needs an update but haven't received an email, please contact your fund administrator for assistance.

What happens if another firm member already approved or rejected the update?

If someone else at the firm has already reviewed and acted on the update, the email link will route to a page with a message indicating that the update has been processed.

What supporting documentation is recorded for an approved share price update?

The Articles of Incorporation (AOI) or Certificate of Incorporation filed by the company for the new share price will be internally reviewed.
These documents will be attached to the SOI update as supporting documentation.