Scope of Services: Carta Fund Administration (for Audited Funds)
Per annum pricing will be determined based on your individual fund structure, needs, and complexities.
Please note the client deliverables and related timelines outlined below, as they will impact service and turnaround by the Carta team. We look forward to your continued partnership.
I. Accounting Services
Accounting services are supported for USD-denominated entities only.
US GAAP Reporting
The following statements will be produced by Carta:
Balance Sheet
Statement of Operations
Schedule of Investments (SOI)
Statement of Changes
Partners’ Capital Account Statements (PCAPs)
The following performance metrics will be available on the Carta platform: Net IRR, Gross Deal Level IRR, RVPI, TVPI, DPI and MOIC.
Carta system-generated external financial reporting packages will be distributed within 45 days after the fiscal quarter or fiscal year end, or in accordance with the terms of the Operating Agreement(s) or as otherwise agreed upon between Carta and Client. You can view a sample of the Carta system-generated external financial reporting package here.
Books and Records
Carta will update and maintain the accounting books and records for the Fund. You will have easy, read-only access to review the books and records.
For the Fund Entity, Carta will:
Maintain and update the Schedule of Investments (SOI) on the Carta platform
Maintain total capital called and distributions received for indirect investments
Update valuations at quarter-end or at a material financing
Necessary documents or information you will provide Carta(1):
Fully executed closing set for portfolio company investments (e.g., countersigned purchase agreement, articles of incorporation (AOI) / certificate of formation)
Fully executed subscription packets for Fund of Fund investments
Submit price per share and/or ending fair market value of fund-specific holdings at least 15 business days prior to reporting deadline in accordance with the Fund’s valuation policy (requires finalized supporting documentation consistent with industry standards).
PCAPs for underlying Fund of Fund investments - Client is responsible for retrieving any Fund investment related documents from external sources/third parties, including but not limited to investors’ capital account statements, capital call notices, distribution notices, and financial statements.
Complete dissolution of the business at end of life of the applicable entities, after final distribution
Banking and Payments
Carta will:
Set up electronic payments for all cash activity as requested
Confirm all fund expenses (including management fee calculations) are done in accordance with the operating agreement(s)
Manage Form 1099 process electronically at year-end as approved, including filing with IRS on client’s behalf
You will provide Carta(1):
Access to the fund’s bank account is required, with the ability to set up payments (bank must have two step-authorization capability and account must be in the fund’s name). No commingled bank accounts between entities will be accepted.
Vendor W-9s and email contact prior to initial payment
Wire or other payment instructions, invoices for expenses, and executed purchase documents for investments
You are responsible for:
Setting up bank accounts, one for each Carta administered entity, with your chosen banking partner as approved by Carta*
Final review and releasing of payments after you receive confirmation from Carta
Performing any call backs to your vendor
Depositing checks
Ensuring accurate user profile setup within the Carta platform
Establishing authorized access to your bank account
Resolving any failed, rejected, returned, or on hold payments due to additional information or documentation needed by your banking partner
* Change in banking partner may result in a fee adjustment.
These services are subject to the Venture Capital Payment Terms and Conditions.
Year-end Filings, Audit, and Tax
Carta will manage the year-end audit and tax timeline as agreed upon by you, Carta, your tax provider, and auditor, to be completed within 90 days after fiscal year end or as otherwise agreed upon between Carta and Client.
Carta will:
Draft and maintain the audit and tax timeline
Provide books, records, and supporting documentation to auditor and your tax provider
Complete template for audit confirms; auditor to send and collect from various parties (portfolio companies, banks, legal counsel, etc.)
Complete audit notes and financial statements in the Carta platform. You can view a sample of the audited financial reporting package here.
Distribute audit report and K-1s generated by your auditor and tax provider, respectively, through the Carta platform
You will(1):
Provide deliverables in accordance with agreed-upon timeline
Coordinate execution of the tax and audit engagement letters (by September 30 of each year), audit representation letter, audit confirms, and tax returns, with executed copies to Carta as applicable
Collect AOIs, financials, and other valuation support for portfolio companies
Provide industry and geography details as well as updated contact info for all portfolio holdings
Provide Fund’s valuation policy and valuation support to substantiate any discretionary valuation adjustments or approaches consistent with industry standards
Collect capitalization tables and annual financial statements for portfolio companies*
Complete any municipal, state, foreign, or federal reporting or regulatory filings. Such filings or reporting will not be completed by Carta
* With Carta’s Portfolio Insights, you get a comprehensive and shareable view of your portfolio companies' performance, including the collection of capitalization tables and annual financial statements. Please reach out to your Carta representative for information on this service.
Carta will not be responsible for any SSBCI-related activities, including but not limited to any SSBCI-specific reporting requirement, custom chart of accounts or custom reporting. Client will handle all SSBCI-specific reporting requirements and filings with the applicable states.
II. Administration Services
Capital Calls
Carta will:
Add new investors to the Carta platform and issue the initial capital call notice upon your execution of the subscription agreement*
Execute on your post initial capital call requests the same business day if received prior to 3pm EST(2)
* Initial capital call notices will automatically be generated only if you use Carta’s Closings feature, included in your fund administration fee. If you do not use the Closings feature, you must submit a capital call request through the Carta platform before Carta can issue the capital call notice. This may take up to 48 hours.
The following are available via the Carta platform:
Per-investor calculations, preparation and distribution of capital call notices to investors
Tracking receipts of capital call payments
Follow-ups to investors (at your discretion) 24 hours after the capital call due date*
*You may experience tracking delays depending on your bank’s connectivity with the Carta platform.
You will(1):
Submit and approve capital call requests through the Carta platform
Provide potential investments and realizations for cash projections
Provide a percentage or dollar amount to be called and other required information
Notify Carta of commitment or carry percentage changes by member
Cash Distributions
Carta will:
Perform waterfall calculations in accordance with the operating agreement(s)
Send notifications to investors to update their wire instructions on the Carta platform
Complete and coordinate potential tax distributions
Draft and publish distribution notices
Set up distribution wires in your bank account as approved
You will1:
Provide amounts to be distributed and final sign-off on calculations*
*5 business day notice required for distribution requests(2)
Stock Distributions
Carta will:
Perform waterfall calculations in accordance with the operating agreement(s)
Draft and publish distribution notices
Provide allocation of shares to third-party brokerages to facilitate distributions
You will(1):
Provide number of shares to be distributed and final sign-off on calculations*
Collect DTC instructions from investors and coordinate with your selected third-party brokerage firm
*5 business day notice required for distribution requests(2)
Investor Information
Investors will be responsible for updating their information, including maintaining investor contact preferences, wire instructions, W-9s/W-8BENs, and other requested information on the Carta platform. Contact your Carta representative to engage separate AML/KYC services for an additional fee.
All communications will be on the Carta platform, which will serve as the communication repository for communications like capital calls, distributions, quarterly and annual reports, investor update letters, tax documents, etc.
Carta will assist with providing you answers to LP questions related to fund information on the Carta platform. Carta will not communicate with LPs directly.
You will provide(1):
Fully executed Operating Agreements with list of commitments and carry percentage by member
Fully executed subscription packets*
Fully executed side letters (if applicable)
Investor W-8s, W-9s, and up to date contact information*
Information about disregarded entities
*With Carta’s Closings feature, you can manage, close, and share subscription packets with your investors.
To discuss any services that are outside of the scope addressed above, please talk to your Carta representative.
For GP entity administration, please see the scope of services here.
(1) Additional documentation or information may be required by Carta as circumstances warrant. Client’s failure to meet required timelines for documentation may result in delay of delivery by Carta of any deliverables reliant on such client inputs.
(2) Excluding federal holidays and office closures. Carta’s general hours of operations can be found here. All notices received after the listed closing time shall be deemed received on the next business day.
DISCLOSURE: This communication is being sent on behalf of eShares, Inc. dba Carta, Inc. (“Carta”) and its affiliates. Certain transactional fees may apply. This communication is not to be construed as legal, financial, accounting 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.