Alessandro Chesser, former VP of Sales at Carta, on the dynamics of CartaX auctions and preparing for liquidity

Yeah. I've been at the company for six years now, but Henry actually started this company eight years ago.

So we've spent the last eight years building infrastructure from the ground up and also signing on private companies and investors. So we have 16,000 companies on our platform and we have over half a million shareholders, which are employees, ex-employees and institutional investors. So now we have all the infrastructure and we also have the network.

And so really what CartaX is, it gives private companies the ability to create their own custom private market for their shares. And so the idea is that, if you're a CEO of a private company, you can create the rules for your private market. You can decide who gets to buy your shares. You can decide who gets to sell your shares.

You can decide how much can trade. You decide how often these transactions happen. And you also create a framework for disclosures, what you want to disclose. However often you run these transactions, you make those disclosures and you also set up a framework for how this is going to be taxed, what type of impact this is going to have for your valuation. And then once you've come up with all these rules and this framework, then your market can trade as often as you want, programmatically, directly tied to your cap table. So it's a lot of upfront work to get it started. It's similar, I won't say it's exactly as much work -- it's actually a lot less work than it would be if you took a company public -- but it's a similar type of work, and you set up your corporate governance, you take a look at what type of disclosures do you want to make and what cadence, you set up parameters for who you want to be able to buy, who you want to be able to sell, but once it's all done, then your stock can trade programmatically in these CartaX auctions, as often as you like. 

Most companies we think are going to start out with a quarterly cadence for their transactions, directly in line with their board meetings. So they do quarterly board meetings, they're preparing a bunch of materials for their board, and then they can repurpose those materials, put them into the auction, in the data room, and then these transactions just happen. And the buyers and sellers place orders, the transaction clears in a single price point and the shares are automatically transacted and settled against cap table. And so once it's all set up, the idea is that it's minimal effort for a company to keep transacting and keep things going, other than just updating their disclosures.

You said it's a similar type of work as going public. Obviously, the process of going public, there's a magnifying glass on it today. How would you compare the process of listing on CartaX to the process of going public, in terms of time, expense, how onerous it is, and then the upside of it, too.

Yeah. I would say it's a lot less than when you go public, you have to hire a team of people, you have to hire somebody to head up investor relations for you, you have to start working on all the compliance issues and the regulatory issues related to the public markets. I think with us, the nice thing is, in the process for launching this product, we've done a lot of the heavy lifting for ourselves, Carta, since Carta is going to be the first company that goes live on the CartaX platform. 

And so we've set up a really clean and easy framework for taxes, and the accounting treatment, and also the 409A impacts, the optimal way of setting it up to have less of an impact on your valuation. So we've done a lot of the leg work already. A lot of the heavy lifting on the company side for setting up CartaX is going to be working out a framework for disclosures.

The companies that we're talking to, they know how they're telling their equity story today, and so we'll have some feedback for them. We'll tell them, hey, we think that it may be helpful if you do a quarterly or an annual investor day recorded presentation, where your CEO and your CFO will speak and answer curated questions, then we can put that into the data room.

And so there's different examples like that. That would be a little bit more lift from the company than running a typical tender offer transaction. But in the sense of what it looks like compared to an IPO, I think it's not even a fraction of the work. But it's definitely more towards that direction than what exists today in the private markets.

They're going to have to figure out a regular cadence for disclosures or framework for that. There is work to set up, and the tax impacts, and make sure that's in direct accordance with the expectations for how that will impact the 409A. 

And then other than that, it's just figuring out who's going to be on your white list for buy-side institutional investors. And so that process is an iterative process, but companies, sometimes they have a list of investors that they already know have [an interest] in buying their stock. And so they'll give us their list, plus their existing investors, they want to double down on the company. 

And then in addition to that, we'll supplement it with these hundred plus institutional investors that we've now onboarded into the CartaX platform that we think may be a good fit for the company based on the files that we're collecting. So we're collecting profile information for these institutional investors and we're determining what type of companies they want to invest in, what average check size is they're looking for, what their average holding periods are typically. And then based on that information, we can go back to the company and we can say, hey, we recommend including these 10 or 20 investors into your buy-side participation white list because we think that's going to drive the most efficient price discovery and most competitive environment and help drive the most successful auctions for you.

Permalink

I'd be curious to hear if there's a specific type of company that you're seeing this message resonate the most with, and  if you have talked about who an ideal customer is. Is it those that are on a trajectory to go public right now? Is it those that are specifically thinking about direct listings? Or is it companies that want to stay private for longer, and are really thinking about staying private indefinitely? Where's the message resonating the most?

Yeah. So I would say we have examples of all three of those.

Definitely we think that the most important customer -- we think that the customers that are going to receive this message best should be those that are closest to going public. If you're 12 to 18 months away from going public, you're going to have to start developing those muscles for regular reporting and regular price discovery on a every millisecond basis. Like in the public markets, your shares are going to trade every second. And so we think that if you're 12 to 18 months out from going public, you should start by practicing quarterly transactions leading up to that, maybe even starting quarterly and then moving monthly, and then maybe moving even more frequently than that. The closer you get to actually going public, the more often you want to be doing these liquidity transactions, the more price discovery you're doing, the more strong you're getting in your telling your equity story, preparing these disclosures. 

And hopefully, by doing that, you will have developed these muscles, you'll be trained and ready to go public. And so when you're public, you've already done a ton of price discovery, so hopefully by then we have a really good sense of what your public market offering price should be. And if you're going to jump straight into direct listing, we think it's really good opportunity to do that because you have to do a ton of price discovery leading up to that anyways. So I think companies that are closest to going public should be most interested in this. Companies that want to do direct listing, of course, because you have to do a ton of price discovery leading up to your direct listing anyways. 

And then the third point -- companies that have a longterm vision of just staying private. We do have a number of those companies in our pipeline as well. 

The interesting thing is, so the answers I gave you are the ones that we think that should be most interested in this and that actually are. But some of them, like those that are closest to actually going public, are also the ones that are like, hey, if we're just going to do all this work, we might as well just take a full leap and go public, we're already so close. 

We think that they should be most interested. They are most interested, but they're also the most risk adverse at this point. They're not willing to like, try and see what happens. What we're finding, though, the message market fit to be strongest right now is in those companies that are multi billion dollars in valuation, but younger in actual age. They may be series B, series C, series D companies that very quickly got to being worth a billion dollars plus. Those are companies that still have the startup mentality, still want to take on the world, so they don't necessarily want to go public and they're looking for alternative options. And they're most risk tolerant because they're younger in age and usually they're more likely to want to take on something like this and see if it works.

So it will be really interesting to see what happens as we scale this thing out. But most likely what will end up happening is, those companies that are closest to going public will be most of our strongest adopters. It just may be a different set of companies that ends up being the first five adopters, a group that's much more risk tolerant.  

Not that I think there's a ton of risk in this, but there is perceived risk. I think there's a lot more risk if you go public.  If you force yourself to go public, then  you don't know what's going to happen. You don't know how the market's going to receive you. You don't know what kind of shareholders are going to come in and try to take control of your company and try to force your narrative to change and try to make you focus on short term earnings versus long term business objectives.

That's the conversation we're having with a lot of these CEOs and CFOs.

It's interesting with the younger unicorns that are more  risk-on in terms of trying something different.  If we take a step even  earlier in the company life cycle -- the series A and high flying series A companies, for example -- are there things that you're advising them to do to prepare for this  new world of regularly recurring programmatic liquidity, things that they should be thinking about, if they want to participate in something like this.

Yeah. So it's a really good question. We're not talking to a lot of early stage companies intentionally. We're talking to the largest companies we can get ahold of, those that have the biggest, flashiest names, those that we deemed to have the most investor interest. We want to create successful transactions right out of the gate.

The early stage companies -- it's a really interesting point. I think the ones that are potentially most interested in this are going to be those that don't necessarily need to fundraise. They're doing really well from a revenue perspective. They've raised a ton of money maybe in their series A or series B. But maybe they haven't raised money in a few years, and so they're interested to know what their market value is. They want to see if their price can get marked up.

And instead of going out and raising round financing,  and taking further dilution, they can run a transaction on our platform, invite their existing investors, maybe invite a couple of outside investors as well, and see where their stock trades at. And I think just from a data collection standpoint, I think it's going to be extremely powerful for these companies to be able to see what the demand is for their stock.

And it can also help them plan future fundraising events or, as they look to further mature, think about going public, it could be important for that. In order to prepare for listing on CartaX, I think it's important for a company to have a sense of, hey, we know that we have investors that are interested in our stock. These investors keep calling us. They want to invest, but we're not planning on raising any money. So I think those are really good indications that you could have a successful listing and transaction sequence on CartaX. 

In addition to that, I think you're going to have to start preparing regular disclosures. A lot of early stage companies, they have like very high level board updates, and they don't drill into specific metrics. They're not super mature yet, so they have more of the flashy hand wavy type metrics, but not the hard, monetary business type metrics. I think the more mature you get, the more your metrics start to look more like a public company type of metrics or disclosure. And so some of these early companies, they have north stars that are just completely not going to be received as well with some of these institutional investors on our platform. I think in the early stages, the CEO goes out and does a roadshow and really sells the vision of the company, and so it needs to be like a manual process. And so the question is, as you think about listing your company in the future on CartaX, you have to start figuring out how to translate your pitch and your message into  online disclosures. That's the important thing.  As you start to develop that type of a cadence with your investors, where literally just a disclosure packet can tell your story, can tell your message -- that's when you're ready to use CartaX.

Permalink

Yeah, that's interesting. Talking more about this disclosure piece I think is really interesting, as it relates to this idea of disclosing less than what a public company would disclose and being less onerous, but obviously disclosing more than your typical private company would.  How do you think about that? Because I think one of the interesting arguments that I know you've made is that the idea of being a private company, but having a lot of liquidity, is a very powerful combination and it gives you a competitive advantage.  So how do you think about the competitive advantage vis-a-vis public companies, and then also versus private companies, maybe your competitors are not doing these disclosures.

Yeah, you're definitely right.  we're building this middle ground here.

You're private. You're illiquid. You're zero transparency. Tomorrow, you're public. You're completely transparent. You're hyper liquid. You can have shareholders come in and take control of your company. This middle ground still gives you the control of being private, and there are minimum disclosure requirements for this product.

You're going to have to be a lot more transparent than typical private companies are today, but you have more control over that narrative though. Once you're public, you're subject to reporting standards or specific things that you have to disclose. For us,  based on the federal exemption that we're operating under for these security transfers, it's federal exemption 4a7. 

The minimum requirement for disclosures is basically two years of financials. It's your summary count table information, it's your board information, it's your 409A history, it's very similar to what mature private companies are already disclosing via their rule 701 filings.

Once you get to a certain size of private company, you're required to disclose these things to your shareholders anyways, on a regular basis. And so that's what the minimum requirement is, but really anything above the minimum requirement, it's up to the company's discretion.  Like I said, we're encouraging them to host these recorded investor day calls, and we want them to give operating metrics. We think that's super important. And there's other creative ways that companies can tell their equity story to put into these data rooms. One idea that companies are thinking about is they want to do  a recorded product demo. The CEO or one of their head of sales will do a recorded product demo, and  we'll put that into the data room. So the investors can like touch and feel the product. And that's really the advantage you have as a private company. You can control this entire narrative. You can control how your story is told. Above those minimum disclosures, you have full control over what gets disclosed, and also how often your shares trade, and also who gets to participate on the buy side. That's very important. There's investors that you think don't agree with your mission, and that are not going to be aligned with your plan for the future -- you may not want to include them in your auction. Even though they may provide some liquidity for your shareholders, you may not think that they're going to be a strategic investor for you. And so you can blacklist them from participating in your auction. These are the benefits of being a private company.

 If CartaX works and you get the liquidity of being public, but still the control of being private, we really do think that you will have a competitive advantage over your public market competitors, because you have more control of your company, and also over your illiquid, private competitors. They may have an advantage over you from having to be less transparent and not having the same reporting requirements, but you'll have an advantage against them on the recruiting side. You can go out and you can tell prospective employees, hey, we're offering equity and we're also offering liquidity on a regular basis. What's the use of going to work for our competitors if they don't let you sell your stock? Like,  that stock is hypothetical and it's hypothetical value. Maybe they go public. Maybe they don't. But the fact that we're letting you sell your stock on a quarterly basis means your stock is actually valuable. There's monetary value [ ] against it you can tap into on a regular basis. And so we think that it gives you a competitive advantage against your private company peers that are not liquid because you can put this into your employee benefit package. And there's no better employee benefit, there's no stronger benefit, that more closely aligns your employees with the common mission of increasing shareholder value like liquidity can do. If everybody's focused on these quarterly transactions and your stock price and where it trades, then they're going to be hyperfocused on your metrics and making sure that you exceed your targets so that they can sell their stock at premium price points.

And so I think that's a major advantage of getting your entire company aligned with your share price. And I think if you're illiquid, and you're private, your employees don't really think about that as much. They don't know what price your stock is going to trade at if it's liquid, and so all they think about is the salaries that they're getting, the bonuses, the cash in hand. And maybe the hypothetical future value if the company goes public. But if you're really looking for ways to motivate your employees, against your short term objectives, I think liquidity is a really strong way to do that.

Can you talk about the liquidity solution of  programmatic recurring liquidity versus what companies already do right now with tender offers and that kind of thing?

Yeah. So number one, tender offers are extremely inefficient. They're episodic. Companies spend three to four months to set them up, and they maybe do them once a year, once every 18 months, once every two years. But it takes a lot of time and effort. The problem is it's  orchestrating a transaction, but it's one sided price discovery.

It's based on what the company wants to buy back the shares at, or you go to an investor, and you convinced them to buy shares from your employees at a specific price point. But there's no price discovery being done from your sellers, your shareholders who want to take some money off the table. And so because of that, it's an inefficient market.  You have a one sided offer. 

Most of the time when tender offers run -- and we launched the tender offer product, I think three or four years ago at this point, we've supported hundreds of transactions and billions of dollars in transaction volume -- but most of the time, these transactions are significantly under subscribed.  The investor will go out and say, okay, we want to buy $20 million worth of stock. Like maybe big [ ] dollars ends up trading. And the reason why is because there's no real price discovery, it's an inefficient market. And so because of that, most of these companies have, like I said, it could be anywhere from 3 to 5 million trading,  the larger ones may end up trading 20, 40, 50 million, a hundred million max, like not too much tender offer transactions will trade more than that. And you're talking companies that are worth multiple billions of dollars. 

So when you look at the amount that actually trades versus the market gap, it's just, something's not right there. And the reason why is because there's no efficient price discovery, and because it takes a lot of time and effort to set up these transactions and you get minimal results from them.

Permalink

Yeah, that's interesting. Talking to some friends who work at some of these companies,  something that I think often gets overlooked is that employees do really care about price, obviously. Sometimes when you talk about startup investing, especially in the early stage price kind of goes out of the window a little bit. But employees do really care about price and, if they're excited about the company,  they don't want to sell anything less than the last round of what the preferred financing was.  And having meaningful price discovery is something that's interesting from the employee standpoint.

Yeah, that's a hundred percent correct. If I just think about my own personal use case, I've been in this company for six years now, we've ran three tender offers in the past, I've sold very little of my stock, maybe like 10% of my stock. And the reason why is, because I didn't agree with the price points that were being offered. But now we're there. We're going to go live with the CartaX transaction. I know exactly the price point that I have in mind at which I'll sell 20% of my stock. Very bullish on Carta, so I am planning on holding most of my shares for the longterm, but price is important. If a specific price point hits, yeah, there's more of my stock that I'm interested in selling.

Can you explain how that works, the mechanics of participating in a CartaX auction from the employee perspective?

Yeah. it's a two week order entry period, where -- and instead of talking about things in terms of employees and investors, we talk about like buyers and sellers. Because the seller can be an employee, it could be an ex-employee, it could be a consultant, it could also be an existing investor -- so sellers and buyers both have the opportunity to put in limit orders.

So if I want to sell my stock, I basically can say, okay, if the stock trades at $15,  I'll sell 10% of my stock; if it trades at $20, I'll sell 20% of my stock. And that's based on eligibility requirements. And so when Henry sets up our transaction and our CFO, Charlie, they will determine what percentage of vested shares that employees can sell, X employees can sell and whatnot. So  when I say percentages, I'm referring to percentage of eligibility. I'll say at $15, I'll sell this amount, at $20, I'll sell this amount. I put in multiple limit orders. On the buy side, they do the exact same thing, different limit orders -- at this dollar price, I'll buy this much of stock, this dollar I'll buy x more of stock. And then what we do after the order entry period, there's a lot of complexities that go into this actual auction. There's an ascending round. So after the two week order entry period, the seller orders are frozen. They're locked in. So sellers have two weeks basically to go in and update prices and reconfigure their limit orders.

At the end of the two weeks, sellers are frozen and the buyers will have three different opportunities to up their bid against a reference price. So then what we'll do is we'll go back to the buyers and we'll say, hey, you bid $14. If you actually want to buy, you're going to have to up your bid to $15. And then  the ones that want to up their bid will up their bid, and then the next day we'll have another round.

And we'll say, actually, it's at $15.50 now, based on where the numbers are, you need to up your bid to $15.50. And so after three different days of having the opportunity to up their bid, we will close the transaction at the single price point where maximum liquidity lies. So we're looking at the maximum supply and the maximum demand and the intersection where most of it exists, and that's where we run the transaction.

Permalink

Got it.  I think talking about the nitty gritty tax implications  and then on the flip side the 409A impacts, I think it would be helpful. And you alluded to earlier, helping companies find the optimal balance. Is there one dominant strategy for how to approach minimizing tax and also minimizing 409A impact or does it depend from company to company?

What it comes down to is your tax impact, your 409A impact, are on the opposite sides of the field. If you want to have optimal tax situations for your employees, you will want to structure it as a non-compensatory transaction. Like it's not compensation. You can structure it so that it looks like it's compensation or you can structure it so  you're completely hands off, this is just your market transaction, the company has minimal involvement and that's a non-compensatory transaction. If it's a non-compensatory transaction, then it's more of an accurate market price of your stock and so it will have a larger impact against your 409A. So companies that want to optimize for tax withholdings and to be subject to potential longterm capital gains, they're going to have a larger hit to their 409A. And so there are things that we can do to minimize that impact, it's how frequent you're transacting, how large the transactions are, and there's other ways that we can optimize. But really you're at two opposite ends in the field. If you want tax benefits, which we think are probably the most important thing for late stage companies -- once you're public, your share price is going to trade, your 409A goes out the door anyways, like your trading price ends up becoming the price at which you issue shares to your employees. So if you're thinking about being public anyways, you shouldn't care that much about your 409A, you should just go and trade your stock and then get the tax benefits for your employees. 

For those earlier stage companies, maybe the younger unicorns that I mentioned, they still want to keep their 409A price as low as possible, and so for them, they want to structure it as more of a  compensation transaction. If it's compensation, then an argument will be made that it's not an efficient market, it will have less of an impact on your 409A. And so the way to structure it as more of a compensatory transaction is to keep it insiders only. If only existing shareholders can buy, existing investors, then it's going to be deemed as compensation. If only employees can sell and ex-employees and investors can't sell, it's gonna look more like compensation. So there's a lot of different ways that we can optimize these transactions, but those two things are usually at opposite ends of the spectrum.

We think that the more mature you are, the more you should be interested in having optimal tax benefits for your employees, the younger you are, the more interested you are in  having minimal impacts against your 409A, but at the end of the day, the difference is the seller. I can tell you this right now, the difference between paying ordinary income tax versus potentially getting longterm capital gains tax is significant. Like I don't want to play ordinary income. And I think that optimizing for tax benefits is the right thing to do for your shareholders, your existing shareholders that are at the company. Your 409A, keeping that low, that's more for perspective employees. But I think the benefit of offering a liquidity program will be more impactful than the 409A price. The benefits of having lower 409A, like having liquid stock means your stock is going to be worth more to somebody than if your stock is illiquid and you have a better 409A price, so cheaper stock getting in. If it's illiquid,  your 409A price doesn't matter.

Permalink

I'd be interested to hear you talk about what you imagine the experience of working at a highly liquid private company versus being an employee at a public company and some of the differences and similarities. One of the things that we've talked about before is how, if you're at a public company, your equity is a sort of a form of currency where anybody can buy that equity as well, versus  in a private, but highly liquid company, you're still getting something that is only available to, those people who are investors who are participating in CartaX or employees, et cetera. And so there are some key differences. One thing that you often hear about going public as a distraction is that employees become too fixated on the share price. But you talked about that as a form of alignment, coming from being purely public, where now employees care more about generating shareholder value. But then there's a flip side to that where it may become distraction. Can you  talk a little bit about that? I'd be curious to hear how you're thinking, especially as someone who  works at Carta and is in all this.

Yeah. Again, you have a binary world. You have  today where it doesn't exist at all for private companies and you have tomorrow, you go public and literally your stock price trades every single second.

So again, we want to create that middle ground, and every company will be different. Some companies will think that quarterly transactions is the right cadence. And yeah, maybe it is a little bit of a distraction every time those transactions happen, but it's a lot less of a distraction than what takes place in the public markets when you wake up every morning and your stock price is bouncing around everywhere.

if you do this quarterly, like literally it's just four times a year. Some companies will do it semi-annually. Some companies will do it anually. Some companies will do it monthly, but even if you're doing a monthly it's 12 times a year, you can  trade every single second or you can trade 12 times a year.

You're going to have a lot less potential volatility when trading on your stock. And then as far as the differences between being liquid and private, and liquid and public, I think one advantage, one major advantage is that when you're private, especially through CartaX,  we're only allowing institutional investors to participate in the buy side of this platform.

So if you, as a retail shareholder, if you want to buy shares in Carta, the only way you will be able to do it is if you become a Carta employee. You won't be able to go into CartaX and buy, because you're not an institutional investor. Versus if you as a retail shareholder want to buy shares in Google, you don't have to be a Google employee, you go directly onto your stock trading account and you can buy Google. So once you're public, your stock has commoditized. To your point, I think that's a really important difference there between being private and liquid versus being public and liquid. And I think that being private and liquid gives your company a major advantage of control, not only controlling who your shareholders are and how often your stocks trades, but, in times of economic turmoil, you can imagine when you're public -- like if Airbnb was public today, and the crisis that happened, with COVID and the short term rental market crashed the floor, if they were public, who knows what would happened to their stock price, but it may not be good at all for the brand. Everything would be completely transparent. If they were private and liquid, then number one, these transactions aren't happening that often like they're happening quarterly. But even then, if they want to pull back and say, hey, we're going to actually move one of these transactions six months from now, and we're going to wait until we stabilize the company and then we're going to continue the cadence. Like, you have full control over that as a private company. Once you're public, you don't have any control. Your stock will just trade and it doesn't matter what's happening to the economy. When you're private, you can literally pull back and you can increase the cadence or you can decrease the cadence, but it gives you full control of your company.

Permalink

One thing that we didn't talk about that I think would be interesting to hear from you about is the different forms of protection  in place,  things  that are built into CartaX for like degenerate scenarios, where, let's say,  there's so much activity that the price goes through the roof and the company is not expecting that level either high or low on the flip side. How do you think about protecting against the, like abnormal events occurring?

Yeah. De risking the transaction.

I think, number one, we have circuit breakers. We have a floor price and we have a ceiling price in which the shares have to trade. So we're trying to prevent any market manipulation, and we're also trying to provide guidance to buyers and sellers on where the price should trade. And usually your 409A price is going to be the floor price, and then your preferred price plus some type of multiple will be the ceiling price. And so that's typically the guidance. In addition to that we are not encouraging companies to let all of their stock trade initially and to be hyper liquid. Let's start out by restricting these transactions significantly. Maybe your employees should only start out with 10% of their eligible holdings on being able to sell. and if you really constrain the transaction, really what you do, and number one is your point, if the stock price tanks, or it goes up significantly, it's only going to tank if your sellers want to sell at the bottom. Like just because buyers bid at your floor price doesn't mean any trade is going to happen there unless all your sellers are down there as well. We're literally going to clear the transaction at the efficient clearing price where supply meets demand.

And so the only way your price can go down significantly is if that's what your sellers think the stock is worth. And so then, if at that point, it seats your true market price. And if you're worried about that and your buyers and your sellers both think that your stock is worth less than you think it's worth, then you've got bigger problems. And then on the flip side, if your price skyrockets, possible, but that means you have really strong demand in your company, it means you didn't value correctly when you did your fundraising potentially, or you've had significant growth since then.

I think that one thing that is being underestimated right now is the value of the data that you get from running these transactions in the future. One benefit is you get liquidity and you get to recruit employees and tell them that you offer liquidity as a benefit. Another benefit is that you now are going to be able to collect data on a regular, real market data on a regular basis, showing you exactly where your supply and your demand meet.

You can use that strategically for fundraising.  If you're thinking about fundraising six to 12 months from now, but you don't have a sense where that's going to come in at, you go run a couple CartaX transactions, you see what the institutional investors are willing to pay for your common stock, and then you can go out and raise your preferred round and use that common stock as like a baseline against that preferred round. But also you can determine that, hey, actually, the market isn't perceiving us in the way that we're perceiving our own stock today, so let's adjust our disclosures a bit, let's work on these specific metrics, let's put more emphasis into these businesses that we have, and let's get our metrics to where we think that the market will receive them better. Then let's run another transaction. Let's see what the market demand looks like. And then based on that, let's go fundraise. So it really gives you a sense of optimizing your equity story based on your demand.

Permalink

Cool, man. Is there anything we haven't talked about that you might want to touch on?

No, I think our punchline is, with CartaX, you can get the liquidity of the public markets with the controlled private markets.

We really do think that it's going to give companies a major competitive advantage from a recruiting standpoint, from helping them mature and also the data that they collect and their market perception, and then how that influences their story, their equity story. And that's our message.

This transcript is for information purposes only and does not constitute advice of any type or trade recommendation and should not form the basis of any investment decision. Sacra accepts no liability for the transcript or for any errors, omissions or inaccuracies in respect of it. The views of the experts expressed in the transcript are those of the experts and they are not endorsed by, nor do they represent the opinion of Sacra. Sacra reserves all copyright, intellectual property rights in the transcript. Any modification, copying, displaying, distributing, transmitting, publishing, licensing, creating derivative works from, or selling any transcript is strictly prohibited.