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Early Stage

How to Use Carta to Fundraise For Your Startup

Amanda Price
6 min read

There is no shortage of tools out there to help startups raise funds.

One platform to keep your eye on is Carta. It offers some nifty functionality right now for savvy founders. However, it won't realize its full potential until it launches its sister venture, CartaX.

In this article, we’ll go over the following things:

  • What Carta is, and why startups should be excited about it
  • Other fundraising platforms for startups
  • Why you need a well-written business plan

What is Carta?

Henry Ward, a financial infrastructure geek, founded the company in 2012 as a way for private companies to manage their equity and ownership. Since then, the company’s services have expanded to include 409a valuations, ASC 820 valuations, and fund administration.

Carta provides financial operations for private companies needing an entirely new breed of mathematics, including new risk models. "The current branch of financial mathematics is all built around the Black-Scholes model," Ward said. 

"That all assumes that the world is normally distributed, which is close enough in public markets. In the private world, it's completely different. It's power law."

Carta automates the issuance of stock certificates, making it so much cheaper. Before Carta, issuing private stock often meant thousands of dollars in legal bills.

One of the many financial services Carta offers is software that helps startups manage their equity cap tables. These tables keep track of investors and what percentage of the company they own.

Carta allows you to run all your transactions in one place, making it easy to build your cap table. Use the financial data you’ve collected on the platform to seamlessly execute a liquidity event.

Carta is hoping that being the cap table management solution of choice for startups will allow it to channel that demand into a new service it calls CartaX. The product is just exiting beta. 

By centralizing employee and shareholder information in one place, the company hopes to build a Nasdaq-style stock exchange for private markets. It recently raised $300 million in a Series E round at a $1.7 billion valuation.

Carta hopes to use this influx of cash to fund this new venture. Many investors believe there’s a need for a private stock market because private funding has been outpacing IPO funding for many years. 

Ward explains, "An investor came to me and said, 'Henry, you're a finance guy, why is it I can buy General Electric stock for seven bucks (at the time)?'," Ward said.

"But it's $20,000 and 60 days to invest in two founders in a garage. And you get a paper stock certificate in the mail. It seemed like an incredibly bifurcated world with an arbitrary line between public and private."

Startups selling shares in their company will get better prices for their shares. That’s because private shares are usually sold in tender offers for a premium price. As startups stay private longer, CartaX will be a way to let employees cash out a portion of their equity sooner rather than later.

CartaX will save time for founders because they won’t have to engage in endless fundraising. This means fewer roadshows, fewer meetings with investors, and less negotiation of term sheets. Instead, founders can partner with investors and high-worth individuals right on the platform.

While CartaX is just getting started, it will meet a crucial need for startups in desperate need of cash. It’s a financial product to keep your eyes on in 2021.

Other fundraising platforms for startups


Wefunder can be a great way to fund your startup.

It's an equity crowdfunding platform with a success rate of around 75%. It offers a ton of resources and assistance for startups so they can maximize their campaign's chances of success. However, there are more legal requirements with equity crowdfunding than other types because accredited investors are involved.

Some of the company's services include help with legal documents, mentorship, and investor relations support.


Kickstarter has been around for over ten years and is the most well-known of any crowdfunding site. It’s tough to complete a Kickstarter campaign because it’s a highly competitive platform with a rigorous selection process.

To have your business venture funded on the site, you must “create something to share with others.” Your business must fall under one of the platform’s curated categories, such as games, technology, or film and photography.

Once you create your campaign, you submit it for approval. If you're approved, you launch your campaign for a limited period, usually 30 days. If you attain your goal, the company sends you the funding. It takes a few days to a couple of weeks to get your money.

Kickstarter’s cut is 5% of all the money raised.


iFundWomen is a platform for female founders that helps them unleash their entrepreneurial spirit. They offer full coaching for women hoping to launch a crowdfunding campaign.

Women entrepreneurs still face considerable challenges in raising enough cash to get their startups going. That’s why iFundWomen was created. To use the founders' words, it’s a “fundraising ecosystem for women-led startups and small businesses.”

Participants receive invaluable advice on how to wage a successful campaign. They’ll also receive the support of other ambitious females when they become part of the company’s community on Slack. 20% of iFundWomen’s profits go back into selected active campaigns.

Writing a business plan to attract investors

When it comes time to pitch to investors, you’re going to need a well-written business plan. A great business plan convinces potential investors that your business idea is so good, they’d be foolish not to put their cash in it. 

Investors look for founders who can create the most value in the least time. Your business plan can powerfully persuade them that your company has that potential. After someone reads your business plan, they should have a clear understanding of what your business does, how it will beat competitors, and how you'll get customers. 

A business plan that is meant to attract investors should contain the following sections:

  • Executive summary

The executive summary introduces your reader to the ideas you'll discuss in the rest of the plan. If an investor only reads this section, you'll want them to understand your concept and why they should be excited about it.

An executive summary should contain short overviews of the following things:

  • Vision statement
  • Mission statement
  • Product or service summary
  • Market opportunity summary
  • Traction summary
  • Next steps
  • Investment opportunity

This section tells investors what your objectives are, why you need the investors’ assistance to accomplish these goals, and what they gain by investing.

Include the following:

  • YOUR FUNDING GOAL: How much money will you need? 
  • TERMS: What will you give investors when they decide to partner with you?
  • USE OF FUNDS: How do you plan to use the influx of cash?
  • MILESTONES: What will you be able to accomplish with the money investors give you?

2. Team overview

Introduce your team and talk about how they’re indispensable to your plan. To do this, create a bio for each team member. Each bio should include:

  • Team member’s name
  • Title and position
  • Role and responsibility
  • Professional background
  • Special skills
  • What makes them uniquely qualified

3. Company synopsis

This section gives your readers the basic facts about your enterprise. It answers the following questions:

  • What does your company do?
  • What role does your enterprise play in the business ecosphere?
  • How will it solve problems for clients or customers?
  • What's your product or service line?
  • What makes your product or service different from anything currently available?

4. Revenue model

In this section, you’ll talk about how your startup is going to make money. It will answer these three questions:

  • Why did you choose this revenue model?
  • How does it compare to competitors’ pricing?
  • Are you planning to add other revenue sources?

5. Traction

Here’s where you show readers that your company has a good chance of becoming a viable business. The best way to indicate that is to show that it has traction.

Include things like:

  • PRODUCT DEVELOPMENT: Talk about where you are in the product development process and whether your product is already on the market.
  • MANUFACTURING/DISTRIBUTION: If you already have a production partner, discuss that here.
  • EARLY CUSTOMERS AND REVENUE:  This is where you mention if you have existing customers and how many. Also, how fast your operation is growing and if you've started generating revenue.
  • TESTIMONIALS AND SOCIAL PROOF: List positive client reviews of your product or service.

6. Industry analysis

The industry analysis section shows that you're not walking into your industry blind. Reassure investors that you know what's happening in it and where your company stands compared to all other companies in that industry.

Use cold hard statistics to back up your assertions. This includes the size of the opportunity, the demand for your unique solution, and competitor analysis.

Identify at least three competitors in your analysis. Answer the following questions about each one:

  • Where are they based?
  • What stage of growth are they in?
  • How much revenue do they generate?
  • How many customers do they have?
  • Have they received funding?
  • What are their strengths?
  • What are their weaknesses?
  • What can your competitors teach you that'll strengthen your enterprise?
  1. Differentiating Factors

This section tells your readers how your offerings are different from all the other products or services out there. List four critical differentiators between what you offer and what else is available. Also, talk about how these differentiators will give your enterprise a long-term advantage.

8. Target Audience

This section shows potential investors that you know exactly who your target demographic is, where they live, and what they value.

Include details such as whether your audience skews male or female and what age range your target customers fall in. Also, include how many people are in this target demographic and how much money they make.

9. User Acquisition and Marketing Strategy

This section is where you discuss how you’ll acquire the customers you’re targeting. Talk about who you're planning to target first and whether you’re going to partner with existing brands. Also, how you plan to raise awareness for your company's offerings and what social media platforms you’ll use.

10. Future Growth and Development

In this section, tell people what you plan to do after accomplishing all your short-term goals. If you have any products you're planning on introducing, mention that here. Also, talk about how these new products will enhance the ones you already have on the market. Perhaps you’re going to expand into new geographic areas, or you'll seek acquisition by a bigger company.

If you can, offer a timeline of when you expect each development to take place.

11. Financial Overview

The tables, charts, and formulas in this section back up the rest of your business plan. You should include these documents:

  • Cash flow statement
  • Balance sheet
  • Income statement

Hire the right people

One of the best ways you can help your startup succeed is by hiring the right people.

When you enlist the experts at Hunt Club, you’ll build a funnel of candidates that fit your needs. That way, they’re ready to go when you’re ready to hire.

Call us today!

Why do brands like G2, Cars.com and ShipBob trust Hunt Club to make the right hires? 

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