Tender offer

Experts share tips on how to structure a tender offer

On the surface, a tender offer is simple. Beneath the surface, a number of complex considerations are necessary to align the transaction structure with your company’s objectives.

Emiley Jellie
Emiley Jellie
Head of Company Coverage
CartaX
June 07, 2022

As the private markets evolve, more companies are beginning to explore tender offers as a way to give employees and early investors access to liquidity, or to meet surplus investor demand following a primary financing.

On the surface, a tender offer is simple: Existing shareholders in a private company sell their stock—either back to the company or to interested investors. Beneath the surface, a number of complex considerations are necessary to align the transaction structure with your company’s objectives. How you structure and plan your tender offer can impact tax and accounting treatment as well as your 409A valuation.

Carta convened an expert panel to explore the tax, accounting, and business strategy considerations that go into structuring a tender offer. Panelists included:

  • Cammy Contizano, partner at Goodwin Procter
  • Nancy Chen, partner at Fenwick & West, LLP
  • Sean Childers, head of legal at Pipe
  • Emiley Jellie, head of company coverage for CartaX

Panelists discussed ways to reward tenured employees while controlling supply, how to obtain more favorable tax treatment for sellers, and the advantages of cap-table integration. As Sean Childers explained, “The amount of integration is just obviously going to be a lot higher if you're partnering with a group that has the cap table itself, as opposed to them going to another third-party provider and trying to link it all up. You want to be 100% sure that the cap table is up-to-date and accurate.”

A complete transcript of the conversation follows below.

Fundamentals of Running a Tender Offer Webinar

Emiley Jellie: My name is Emiley Jellie, and I'm head of company coverage at CartaX.

I'd love to introduce our three panelists today. We have Cammy Contizano, a partner in Goodwin's private equity group. Cammy has extensive experience in structuring and executing private tender offers on behalf of both companies and institutional investors. She’s been a great partner to Carta from the Goodwin side and a wealth of knowledge across all things tenders.

Second is Nancy Chen, partner at Fenwick. Nancy focuses on executive compensation and employee benefit matters for startups and public companies. When a startup client reaches a liquidity event, Nancy is a critical member of their team, as she advises clients on the tax, securities, and employment issues related to equity-based compensation.

And from the company side, we have Sean Childers, who is head of legal at Pipe. He was previously with Fenwick, working with startup companies and venture capital funds on VC fundraising, corporate governance, M&A, and much more.

As for an agenda today, we're going to provide you with an overview of what we're seeing in the market at CartaX, then lead into the panelists for a handful of topics that we consistently field from companies about tender offers.

CartaX saw four times the quantity of secondary transactions on our platform in 2021, versus 2020. And we're off to an extremely robust start in 2022. The growth in transactional volume has been massive, and we only expect this to continue going forward. One trend we've noticed is a split by round of when companies are conducting secondary transactions on CartaX. In 2021, almost 50% of our transactions were for companies under $1B in post-money valuation, and we're seeing more companies try to navigate their way through their first tender offer.

This leads us to our panel of experts today. Please feel free to submit questions at any time during this discussion, and we should have some time for live Q&A towards the end.

Drivers of secondary liquidity

Emiley: Let's start with the beginning of a tender offer. Sean, I know you've worked with Carta on your last transaction. I’m curious: What drove secondary liquidity at Pipe? Were employees asking for liquidity, or was it investor demand?

Sean Childers: Yeah, thanks. I think it's a combination of a lot of factors: your employment philosophy and what you've communicated internally, the amount of investor interest in your stock, and then also the overall marketplace for secondaries and secondary appetite. During the last few years we've seen it go bigger and bigger, and earlier and earlier, with a realization that offering a small amount of target liquidity, even to early-stage employees, can help align everyone's long-term incentives.

Specifically at Pipe, I think it's been important to our employee recruiting and retention to say, “This isn't something that we are in any way philosophically opposed to.” We're not looking for employees to sign on for 10 years and maybe at the end of that there’s a little bit of liquidity—you just have to hold on forever. Rather, we take the opposite approach, which is, when the timing is right, if there is something we can do, if all the factors make sense, we're supportive of employees taking a reasonable amount of liquidity off the table as the company progresses.

Now, in order to do that, you obviously have to have investor interest, as well. And we were lucky in that department, but I think it's the overall strategy that's worked really well for us.

Trends in the secondary market

Emiley: That's awesome and definitely makes sense. This one is for Cammy and Nancy. So, what are the general trends that you're seeing in the secondary market? As I mentioned, 2021 was a breakout year for liquidity programs. What do you think is driving this?

Cammy Contizano: I can start. Yeah, we are seeing more and more tender offers. I would say every primary at this point has some secondary component to it, whether it's a tender offer or a smaller direct secondary. But it's usually a tender offer.

These days, I think, interestingly, that we are seeing earlier-stage companies, and earlier rounds of financing have secondaries and tender offers linked to them. I think it's still your Series C and later, but we're definitely seeing it creep earlier sometimes.

I also think that we’re seeing tender offers expand into other industries. It was a very tech-company thing to do, but that’s not really the case anymore. There are all sorts of industries and types of companies that are doing these tender offers. I think that's part of the expansion. I would also say, like Sean was talking about, it's still—and I think it always has been—used as a retention and a recruiting tool for private companies, especially ones that are staying private longer. That was where these tender offers came from, and it’s just continued to be that way.

Nancy: I would echo a lot of what Cammy just said. I think 2022 is off to a very robust start on the tender situation. Most of the time it really is more highly valued companies, because to Sean's point, you need investor demand as well as employee desire to sell. You need a combination of both factors. But it's a very active market.

For someone who's been in this practice for a long time, I can still remember when these were very esoteric, one-off situations. I can remember that far back. Now, I feel like it's just commonplace. I just did a presentation recently to startup companies. I was invited to talk to startup companies about exec comp issues, and they wanted to know about secondaries. These are companies at the seed stage. They're not ready for a secondary—but they want to know about it. I think the excitement and the demand is really there.

Pre-transaction advising

Emiley: We're definitely seeing it on our desk, as well. So, it's good that we have all of the same trends from your side, as well. Sean, can you touch base on the alignment of getting all of your advisors organized pre-transaction? Who needs to be involved and when do we have to engage with them?

Sean: I think the most difficult part of the process is (deciding) how many people you want around the table when you're making decisions about structuring, when you're making decisions around how to set the price, what’s the tax treatment. The ones that I think are obvious, no brainers: You're going to want your outside corporate counsel involved to run the transaction and work with Carta.

I think you’re also probably going to talk to someone in their employment group, like Nancy, or maybe someone in the tax group to understand, for employees that participate in this offer, what sort of tax consequences can they expect: Is there an opportunity for them to get long-term capital gains? Are there withholding issues that are going to come up? Because you really want to know that at the start, so that you can then accurately communicate to your employees early on what can they expect if they're to sell in this.

In addition to the legal advisors, I think you’ll probably want to speak with your accounting firm, and maybe your 409A valuation firm, as well. Because the tax treatment, the tax position, and the financial reporting position—it’s not always going to be the same between your tax lawyers, and your accounting advisors. Sorting that out early on is very helpful. All these transactions do impact 409A price.

If you're getting involved in these transactions because you're motivated by a desire to help employees, I think it's also incumbent to know, "Well, what are we doing to the next round of employees that come in? What's going to be the impact on their equity awards, as well?"

Nancy: I would add to that, your auditors. The tax advisor is the person who signs the corporate tax return, but the auditors are, I think, just as important. Their opinion on the tax treatment—many times that is the view that's going to carry the day. So, Sean is totally right. Just to preview—I know we're going to talk about taxes later, Emiley—but Sean is absolutely right. You need all of these stakeholders involved at the start.

I would also tell you that if you're thinking about taxes, you have to think about structure. You have to think about things like the identity of buyer and seller, and the reason for the tender offer from the company's perspective, as well as from the buyer's perspective. I don't want to get into it right now, but you don't want to think about taxes at the end, because at that point the structure may already be in place—and it's much harder and less fluid to change it in order to maximize your tax treatment.

Emiley: That sets the table for the rest of the conversation, because we're going to be touching on all of those different points coming up. Cammy, we're going to go over to you. As you mentioned, the dynamics have definitely been shifting, with earlier stage companies doing liquidity events for transactions. Can you speak to when companies start to have a conversation with you, and what they should be expecting when they're trying to structure the transaction, as Nancy just mentioned?

Cammy: We are seeing companies come to us, like Nancy just said. They're thinking about it even before they're at the stage where they're going to do one, because everyone knows the benefits and wants to start thinking about them. What Sean and Nancy touched on in terms of structuring is obviously the big one: deciding who is going to be eligible to sell (and) who is going to be buying—the company or third parties?

There are lots of details to think about up front, and the more that companies do that, the more smoothly the process goes. I always think with companies, the first thing to do is think about what the goal is. There can be different goals. (One goal) can be they want the employees to get some liquidity. There can be angel investors that have invested early on, and they want to give them some liquidity. There can be former employees who are smaller shareholders, and the company wants to clean up the cap table a little bit and simplify their capital structure. So figuring out the big picture then helps companies home in on the details and develop the rules for the tender offer. We help companies think through that and then are able to draft the documents and structure it from there.

Timing a secondary transaction

Emiley: Do you have any suggestions around the timing of secondaries? We consistently get asked questions about whether the structuring changes if it's attached to a primary, or if it's in between rounds. Any color you could provide there?

Cammy: I think it can be easier when it's attached to a primary, and harder when it's attached to a primary. Price is usually easier to figure out if there is a primary. If there hasn't been a primary in a while, the company and/or the buyers have to come up with a price, depending on whether it's a company buyback or a third-party tender. There is an easy answer if there is a primary linked to it, whether it's the primary price, or some discount. It’s often the case there can be a slight discount if the buyers will continue to hold common, or early preferred, if that's what they're buying in the tender offer. But if there hasn't been a primary, you have to think about what the price is going to be, and you have to explain that to people in the offer document: "This is how we came up with it."

I think one of the harder things about linking it to a primary is that in all of these tender offers and direct secondaries, generally, you have to be thinking about (Rule) 10b-5 and information disparity between the buyer—which may be the company or a third-party buyer—and the sellers. You want it to be as close as possible in terms of what information they each have. You want that to be fair, and it's legally required that you're not telling people something that might be material to their investment decision, their decision to sell. In a primary, buyers often do a lot of diligence. Then the company has to think, “Okay. We've given the buyers all this stuff about us. What do we need to tell the sellers?” It’s also the case that a company, when you do a company buyback, knows everything about itself.

Over time, there has developed a standard list of disclosure materials that companies provide. Some of them are easy: Charter bylaws and the options plan (are what) every company is willing to provide. Financial statements have become a big part of it. We see that in 99.9% of tender offers. It's usually two years audited, if you have audited, and then the sub-period for whatever year you're doing the tender offer.

That's sometimes a little bit harder, but then the next step is things like projections, forecasts, (and) KPIs that have been provided to the buyers. The hard part is to think through what you need to disclose in a primary when the company has given a lot of information to the buyers—that makes it a little bit harder in terms of just making sure you're really holistically thinking about the disclosure piece of it.

Pricing a tender offer

Emiley: It makes a lot of sense there. It tees us up for asking Sean: Can you just speak from the company perspective around the process for determining the price for shares and how you went about it?

Sean: Yeah, sure. I'm the head of legal at Pipe. The price was set above me. The CEO was involved. But overall, what drove our tender was just extraordinary investor demand. I think any time you have that pattern, it gives the company a lot of leverage in terms of trying to establish a good and favorable price.

I think it also helps with the company's argument that this is not a compensatory transaction—because the existence of this tender offer, this secondary, was really driven by the fact that investor demand exceeded the amount of equity capital, or dilution, the company wants to sell.

It's a bit of a nuanced point, but I think to the extent possible, having that favorable investor environment helps both with the price setting, as well with the ultimate structuring of the transaction—you can bring a third party buyer in, and you can say they're really the ones that drove this. You can say they were heavily involved in setting the price. I think that's just really a best-case circumstance: that pattern to launch off.

Nancy: I would agree with that on the tax side, too, Emiley. If you have a third-party, as Sean said, it's oversubscription demand from the investor. And honestly, at least from a tax standpoint, if it's a new investor—for example, an investor who couldn't get into your primary because it was over subscribed, but you really like this probably smaller investor and they're willing to take common stock at the preferred stock value or something close to it, and they're not on your cap table—that is, I think, the number one way to try to get cap gain treatment. There are other factors I'll talk about later. But if you can structure it so that it's a brand-new investor to the company, that'll help a lot in trying to get cap gains.

Emiley: I was going to say, your face lit up when he was talking. So I knew you had the comment to chime in there on the tax side. Going back to Sean: your thoughts around thinking through seller eligibility. You went through this. I know that we at Carta definitely help companies structure that piece prior to a transaction with bespoke models. But can you just share any learnings from the experience of going through that process?

Sean: Yeah, I mean, seller eligibility: I think ultimately that should be a reflection of your company's values—and specifically your values to people in recruitment and retention. It has to be an executive or board-level conversation. Ideally, especially if it's an earlier-stage company, it's a founder-led conversation, as well— because I think it should really tie back into the philosophy of “What do the founders think it means to work at this company? What are the founders’ views on secondary liquidity, and what's appropriate?” Once you have a solid understanding of all the key stakeholders around the table—what are the values and commitments that we're trying to live up to in offering this secondary—it then makes the downstream questions like, “Exactly where do we tie off the eligibility? Exactly how much do we allow each employee to sell?”—it makes those a lot easier if you feel like you have that high-level alignment. We were pretty expansive, I'd say. We generally took the view that as employees vest into their shares and become eligible, they should reach the eligibility threshold pretty quickly.

A different company could very much say, “We have a little bit of a different threshold that we draw.” Maybe, "You have to be here two years or three years or something, before we think that you're ready.” I don't know if Nancy or Cammy have data points or trends that they've seen in the market on that.

Cammy: I would say a lot of times it’s linked to vesting. Often, options have a one-year cliff. So, at least people need to have been at the company for a year. Companies do decide to make it longer. Another thing you can do is let more people be eligible to sell, but then have oversubscription rules. So, if more people sell than the amount of money that the buyer or the company is willing to buy, then you can give people priority: You can say, “All employees who have been here at least a year can sell, but if we can't buy everyone’s shares back, or the buyers can't buy everyone's shares because that pool is not big enough, then we will prioritize people who have been here five years. They get to sell first.” And then four years, and then three. Something like that. So, they're ways to open up the pool as well as prioritize longer-term employees, if that's the company’s goal.

Frequency of secondary liquidity transactions

Emiley: That's great. We see the oversubscription happen a lot. We also help companies on that side, which is good. This one's probably more for Cammy and Nancy: How many times can a company be running a liquidity program? I know that recurring liquidity is core to Carta's values, but do you have any thoughts around how companies are implementing these recurring programs, and any considerations they should be aware of?

Nancy: I think the number one consideration is the accounting treatment. You really have to work with your auditors on this. Ideally, we don't want to guarantee that we're going to be doing one of these programs annually, even if that's really what management and the board are thinking or contemplating. You don't communicate that to the employee population—I think that's important from an accounting standpoint.

Even if companies come to us and say, “Yeah. But we want to do this on a regular basis. We think probably annually”—we caution them in the messaging they provide to their employees. Many times that’s driven by the accounting treatment—that it could be quite adverse accounting. I'd love to hear Sean's perspective. If you actually go out and publicly announce that you're going to do this on a regular basis.

Sean: Not surprisingly, we follow that advice. I think our messaging to our employees has to be really delicate. We say, “This is a value that we support. This is our overall approach. We’re going to do things to try and make this happen.” But it's never a promise, because really the company can’t promise. A private company can't promise that they'll be a robust market for a secondary at any point in the future.

I think that would be not just bad messaging from the accounting standpoint—which I agree with—but also realistically, you're making promises that you don't know that you can keep. So we're very delicate there. I agree: the accounting part of this is probably the most complex, even more complex than the tax treatment, which is complicated enough. I think that in all likelihood, companies are getting more and more comfortable with the adverse accounting consequences that come with doing these regular tender offers, but you definitely want to speak with your advisors frequently.

I also get the sense that those advisors are probably still learning some of these rules of the road as the secondary opportunities start to become more and more frequent, and earlier and earlier. I guess I hope that in the future we may get more clear accounting guidelines and more obvious guardrails to consider.

Cammy: I think Carta's view—in terms of wanting to figure out a way for companies to offer liquidity more regularly—is shared by a lot of companies. It does seem like change is coming in that respect. We're just all trying to figure out how to do it. We do get the question a lot: How often can we do this? Can it be more regular? Can we have it be open? There’s a lot of thinking going on around that. I think there will be ways to do it that aren't doing a formal tender offer every year. But we're still trying to figure out all the details of it.

Secondaries and 409A valuations

Emiley: That makes sense. We're definitely working on some innovation there—so it's exciting to see what will come in the future. Before we get into taxes, I’d love to just touch on 409A valuations quickly. For the group: When should you think about getting a new 409A valuation? And then Sean, more specifically: How do you think about the impact of a secondary transaction on the 409A?

Nancy: On the 409A, you actually should start the process as soon as you have a structure in place: You've selected the buyers and sellers, the purchase price, the maximum purchase price. Because you actually need the 409A as a part of considering the tax treatment. An updated 409A that reflects the secondary is actually needed beforehand. Ideally if you could get it before you launch the secondary, that would be great. But you do need it before the secondary actually closes and becomes effective—because you have to figure out the tax situation.

Sean: We didn't really have any problem working with our 409A firm. We just told them, “Here is the size of the secondary. Here is what we expect.” And they were able to generate, “This is what the impact on the 409A price will be, assuming those conditions hold true.” And they're able to provide a little bit of a range, as well—like if it’s plus or minus 10%—(and whether they) think this price is still good.

From an early-stage company's perspective, every single one of these secondary transactions—especially a larger tender offer—is probably going to impact your 409A, because the valuation firm is going to look at that as being indicative of a fair market value. But also I think that may be less than you might expect, or at least less than I expected. Let's say the price per share in the tender offer is $100 per share. That doesn't mean they're necessarily going to weight that entirely, and your 409A is going to double overnight. That was the opposite of our experiences, at least.

I do think having someone on your team—whether it's legal, or finance, or both—really understanding it and walking you through it, is extremely important. Because ultimately, internally you need to communicate this back down to employees, both in terms of how it might impact the tax treatment, or the withholding, but also how it impacts future employees. And also, the change in the 409A might impact current employees who have unexercised options, but are thinking about exercising. So I think you're really doing a disservice if you don't dig in on the details and really try to understand it with the valuation firm.

Emiley: Our 409A team is run by Chad Wilbur, and he consistently fields interest in this question. And we actually did a webinar on it last month—just helping companies navigate the topic, since we feel that it's so much on our secondary desk.

Taxes on secondary transactions

Emiley: We're going to dive into taxes quickly. I know that everyone always has a lot of questions about these. Nancy, this first one is for you. From the tax perspective, what should companies be considering regarding the tax treatment of shares sold in the secondary? And if an optionee has to exercise an option before selling in the secondary, can you explain the tax positions and how to optimize the tax treatment on behalf of the participants?

Nancy: Absolutely. There are two main tax issues that arise in a secondary. The first is, when you go to sell the shares, as we've been saying, the purchase price, at least right now, tends to be very close to the last round of preferred stock valuation. Sometimes it's exactly, sometimes there's a small discount off the preferred stock value. In any event, it's going to be higher than the 409A valuation. So, the tax issue that arises when the sale price is above the 409A is: How should the gain above 409A actually be taxed?

For example, if the 409A is $8 a share, and the sale price in the secondary is actually $20 a share—I'm actually using a real example for one of my companies—the question here is, how does that $12, that gain above the $8 409A, get taxed? Is that capital gain? Or, believe it or not, is that ordinary income? Because from a company's perspective: Take the position, in this example, that $8 is your fair market value. This is what you're going to be basing options on. So how is it possible that someone is buying the shares at $20, when the value is only $8? What is that $12 spread in this example?

The worry is that the IRS would actually consider that income, because this whole program is administered and run by the company, which is also the employer. The employer communicated and negotiated the purchase price. That's the first tax issue.

The second tax issue is with respect to the option exercises. Most of our tenders now allow for what is called a contingent option exercise, which means that if you want to participate in the tender offer, you can actually exercise your options, but that exercise only becomes effective to the extent that the tender offer itself becomes effective. So it's contingent on the tender offer. So if for some reason the tender offer doesn't close and doesn't become effective, then your option exercise is not effective, either. It's a win-win for the optionee because there is no investment risk in this situation. And on top of that, the optionees don't even have to pay the exercise price with their own cash from their bank account. The exercise price, and any tax withholding, are actually paid from the sales proceeds.

So from an investment risk perspective, there is no investment risk. And when there isn't an investment risk, the worry there is that it's actually not an exercise. This is actually just a cancellation of the option, and a payment of the spread. That payment by the way, is a bonus, and if it's a bonus, then it's actually ordinary income. So, that's the second main tax issue that you have to address.

In order to maximize this, as we were alluding to, when you are at the beginning of the process—structuring it, coming up with the sellers and the buyers, and the reason to go for it—this is when it's the most fluid, because it is not set in stone yet. And if it's possible to pick a third-party investor that's not on the cap table yet, that's the ideal. That is the number one reason the top four accounting firms have said that the gain—that $12 gain in my example—is cap gain. That's the first thing they asked for.

I've actually gotten on calls with clients where that's all we say. It's a third-party investor, not a stockholder. Major accounting firms (say it’s) cap gain. It's a five minute conversation, and that is a win for the client when it's that easy. So, think about the buyer.

By the way, when it's a company repurchase—and sometimes it has to be a company repurchase for other business reasons—that same spread is probably income. It's very likely income, because the buyer is the employer. So, in that case, it's very hard to justify why the employer is paying way more than what the employer itself was calling as fair market value. And then there’s in-between: It's a facts and circumstances analysis.

As far as the sellers, many of the reasons that Cammy had said earlier, about why you want to do a secondary—you want to clean up the cap table, you want to give some long-term investors liquidity, as well as the employees and former employees—if you have a group that is more inclusive than just current employees, that is a helpful fact, as well. Then finally, the reason for the secondary: oversubscription, over-demand. That's very helpful, because those are not compensatory reasons.

I've got one more reason: If you don't have to convert the common stock to preferred stock, that's super helpful, too, because that means the company is “less involved” in that process, less involved in facilitating. So if it's possible to have the investor or the buyer buy the common stock, that's great as well.

So the issue is between cap gains or ordinary income. Think about your sellers. If your sellers are actually just your optionees who are going to be doing the contingent exercises, that cap gain is just going to be short-term capital gain. It's a little bit better than ordinary income, but there is not a huge difference. If you have founders who are going to be selling in your secondary, those founders want long-term capital gain.

You should really marshal your facts in the best way possible—structure that secondary in the best way possible—to get long-term capital gain to the founder. You have to think about who's selling the shares. Then, as far as the contingent exercise, I feel like that system has really evolved to where quite a few of the top four accounting firms are comfortable taking the position that the contingent exercise is an actual exercise, and it is meaningful.

For the ISOs, it's ordinary income, but not subject to withholding. That's the difference. Sometimes that's material for some folks. There are so many ways to think about the structuring. Get your corporate and tax advisors involved early, so that they can help walk you through these things and really push your facts.

The other thing I'd say is, when you're approaching your auditors and the tax people who are signing the tax returns: instead of just scheduling one big call with everyone on it, I would separate it. I would approach the tax advisor first. They, for whatever reason, tend to be more sympathetic about the tax treatment. Get their opinion first, then go to your auditors separately. And then say to the auditors, “Yeah. Well, we already talked to the lawyers. We talked to the tax advisor. And they think it's cap gain. What do you think?"

It puts a little bit more pressure on the auditors. In the end, it really is the auditor, I think, that has the final say on this—because if the auditor doesn't believe that it's cap gains, and they think there is a misreporting here that’s material, what will actually happen is they will set up a reserve, and that's a very bad fact. You can't really take a tax position that is contrary to what your auditors think.

Emiley: That's great, and it clears up a lot of questions, too. I know that we consistently get this one from companies as they're going through the process, so we always appreciate that commentary.

Partnering with Carta for a tender offer

Emiley: I wanted to take a few minutes just to touch base on how you partner with us at Carta.

Sean, Cammy, and Nancy, we've worked with all of you in the past and loved doing it. Sean, we'd love to hear your thoughts around using Carta, and how we could help with the transaction readiness, the cap table integration, and anything else that you found that was super seamless throughout the process.

Sean: I think if you're going to structure it as a tender offer, which is probably a good idea in many instances, there are a lot of third-party services out there offering these services that can help organize it. I think the big advantage for us using Carta is our cap table is already on Carta. So the amount of integration is just obviously going to be a lot higher if you're partnering with a group that has the cap table itself, as opposed to them going to another third-party provider and trying to link it all up. For us, it's been a positive experience—just with the ease and then the trust on the company side. You want to be 100% sure that the cap table is up-to-date and accurate. Otherwise, you're going to be losing sleep at night. Having it all in one house is a little bit more reassuring on that front, as well.

Cammy: I can jump in from my experience from doing these for a long time, and how much easier you all make it—and cheaper. My first tender offer was about 14 years ago, and we sent the documents out by FedEx. We hired an escrow agent to send the wires out. People had to mail their stock certificates, mail their documents back. Sometimes people got on airplanes to make it to the escrow agent in time to send it, because there is a deadline that you have to make your decision by.

The lawyers went through the documents. They made sure everything was filled out correctly, the stock certificate matched, all of that. That is now taken out of the process. I'm happy we're not doing that process. It's expensive. It's hard. You all make it a more seamless way to do it. It's benefited companies a lot that services like Carta are around to be able to help with this.

Nancy: I would say especially if you're already on Carta, it's really a no-brainer to seriously consider Carta for your tender offer. I would say post-closing, as well: making sure everything is all set, the proper options were exercised, it's properly reflected in the cap table. It’s at least one less step if you’re working with a platform that already handles your cap table.

Emiley: We're really focusing on that pre- and post-transaction—and the data-quality issues that sometimes we see coming back when people run transactions away are a little bit shocking. We're happy that we can offer that and include that with the tender offer service, taking it off the companies’, and the lawyers’, and the paralegals' hands—because it's core to our value. We want to be the full ecosystem for the transaction, and really partner with people.

We are always willing to have any discussion with any company. Hopefully, everyone learned a lot from this. We appreciate you guys joining today. Thank you.

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