E134 How I Accidentally Started a Billion Dollar Tech Company w/Carta CEO Henry Ward

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How did you get this idea?

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I'm different.

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I fell in love with being a founder, and I
didn't care what I had to do to become a

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founder.

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I fell in love with being a founder, and the
problem was the vehicle for me to become a

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founder, which is a strength and a weakness.

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The strength the the weakness is I'm not
committed one particular vision, I'm just

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committed to the founder journey.

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The strength is that means I'm agnostic which
problem I solve, which is you see it in the DNA

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of hard, like, we'll do anything.

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Right?

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We'll move cap tables, 49 a, fund account.

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Like, this stuff nobody would ever nobody wakes
up and goes, you know what?

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Like, it's just that nobody does that.

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When you started Carta over a decade ago, you
mentioned you started with cap table management

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as a wedge.

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How did you get this idea?

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Was this inspired from your previous
experience?

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And I thought it was a very novel strategy, but
why didn't other people have this idea?

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You know, it's a it's a great question.

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I I had a different company that failed.

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1 of, the investors I worked with on that
company, when it it failed, he he took me to

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lunch at at, Typhoon.

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His name is Manu Manu Kumar.

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And he says, Henry, you know

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k nine.

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Yeah.

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K nine.

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And he said, you know, Henry, this you know,
that company didn't work.

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It wasn't a good idea.

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But I I think you're pretty good.

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This cap table problem is a crazy problem.

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Like, it I just don't understand how we're, you
know, the industry is so bad at it.

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You'll, start the company, I'll invest in it.

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Like, I think this is an important company to
to build.

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And I met maybe a unique entrepreneur.

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Most entrepreneurs, the conventional wisdom is,
you fall in love with a problem, and

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entrepreneurship is a vehicle, with which to
solve that problem.

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I'm different.

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I fell in love with being a founder, and I
didn't care what I had to do to become a

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founder.

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I fell in love with being a founder, and the
problem was the vehicle for me to become a

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founder, which is a strength and a weakness.

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The strength the the weakness is I'm not
committed, you know, to to one particular

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vision.

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I'm just committed to the founder journey.

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The the strength is that means I'm agnostic of
which problem I solve, which is you see it in

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the DNA of Cardinal.

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Like, we'll do anything.

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Right?

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We'll cap tables, 49 a, fund account.

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Like, the stuff nobody would ever nobody wakes
up and goes, you know what?

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I wanted to do cap tables for 10 years.

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Like, I just nobody does that.

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And so that's the that's my gift is I'll I'll
do anything to continue the journey.

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And so he was like, you know, why don't you
start this company?

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And I said, I don't have any better ideas.

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And that's how we started.

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But then it just became this incredibly
exciting thing because once we got this tiny

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little wedge with a a seed stage startup, we
could start doing everything for these

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companies and funds.

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And that's what made this the the the ride
really special.

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I spoke to a lot of people in the industry, and
they said, Henry has really big ideas, but he's

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sometimes pursuing multiple different areas.

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How is that a strength and how is that a
weakness?

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We talk a lot about, innovation companies,
versus execution companies.

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So, you know, back in the day, you know, we
were recruiting, you know, against, like,

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Rippling or MongoDB or Zoom.

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You know?

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And people would say, you know, why should I
come to Carta instead of one of those

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companies?

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And I said, well, it depends on the kind of
company you you wanna be a part of.

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I would call those, execution companies.

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You know?

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If you're partner, if you build a better HR
system than anybody else in the world, you have

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in you know, you have line of sight to a
1,000,000,000, 10,000,000,000 in revenue.

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No problem.

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You build a better database, MongoDB, line of
sight to 1,000,000,000 in revenue.

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You build a better Zoom or, you know, a video,
conferencing system, line of sight to

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1,000,000,000 in revenue.

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You build a better cap table, line of sight to
50,000,000.

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You know, a 100,000,000 maybe.

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Right?

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And and so we we I would describe as an
innovation company, we never had clear line of

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sight to any large outcome.

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We were always, oh, you know, we have to
innovate our way out of every market or product

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that we started.

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You know, the way I describe it is, like, if
you were gonna work for one of these companies,

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do you wanna be part of, like, a super well
defined team execution, operationally efficient

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team with clear strategy and line of sight, to
where they're going?

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Or do you come to Carta where we're a bunch of
misfit ragtag, you know, guys and gals, you

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know, with a machete trying to, you know, hack
our ways through the jungle and and find our

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path out?

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And that's really the the 2 types of companies.

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And so for us, we just had to build a company
that we knew we were paranoid and still are.

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Any market we're in will run out of oxygen.

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And so we have to keep constantly adding new
products and ideas to the portfolio to see

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which ones will break out.

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And thank god we did because if all we did was
carda x and didn't do all these other ideas

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that we had, including fund accounting, we we'd
be dead.

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Right now, we've got, you know, 3 main
businesses that drive half a 1,000,000,000 in

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revenue.

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But I got 7 projects in the back, that we're
working on that will hopefully get us to the

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next 1,000,000,000.

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How do you decide when to start a project, when
to close a project?

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There's 2 ways to start these projects, bottoms
up and and top top down.

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Successful projects tend to be top down, Not
necessarily because I have better ideas than

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the company or bottoms up ideas, but in part
because if I have an idea, it's it gets the

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whole weight of the CEO and the company around
it.

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These days, like, a good idea still needs a lot
of muscle to to to get it out there.

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You can't just build an app now, and it works.

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But there are cases where bottoms up ideas
work.

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And so you wanna build a a function where I
spend a lot of my time ideating and working

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with teams on ideas that I wanna flush out
with.

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We do hackathons.

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So that's a great way where people can and I
judge them and people will come and pitch and

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I'll go, that's a you know, kill, kill, kill,
kill this one.

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Come back to me.

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Let's, like, let's pull this thread a little
further.

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And then once a year, I do Carta Business
School where I take sort of the 30 top young,

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managers at Carta.

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And I take them to an off-site using some
secret location.

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That's that's beautiful.

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And we spend 3 days together, and we just
ideate.

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I I do some teaching.

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We do some ideation.

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And at the end of the 3 days, you know, they
they pitch their best ideas to me.

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And, 2 of the products we work on today, came
out of, Carden Business

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School.

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You also have a very contrarian view on AI that
many people in the tech ecosystem have.

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What's your view on AI, and how does AI play a
role at Carta?

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We spend a lot of time on AI.

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I'm I'm obsessed, and I I find it so exciting.

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If you look at most CEOs of scale companies
like ours, they're looking for AI to do 2

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things.

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1 is, reduce headcount.

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Right?

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How do I, you know, reduce the number of people
working on stuff because I've AI'd, you know,

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all the workflows and the work, and I can I
can, reduce headcount?

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And the second is they're trying to turn
everything into a prompt.

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You know, how do I search better?

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How do I query something?

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How do I, you know, ask questions?

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Things like that.

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And, what I've directed our teams is is to do
exactly the opposite, which is on the first

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front is don't build AI to reduce headcount.

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I I don't really care about reducing headcount
right now.

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Use find opportunities to use AI to unlock
customer experiences that we couldn't do

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without AI.

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That's literally impossible.

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Like, even if I had, you know, could have put a
1,000 people on this thing, we couldn't do it

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without AI.

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What's what's an example of that?

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One of the great examples is, we're now using
agents on the back end to to fix health checks

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that traditionally took a human, to find.

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So, like, you're you're, you know, you're doing
a capital call, and then you find that there's

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a health check that will, stop one of the LPs
because they need to, they didn't pay enough on

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their last capital call, blah blah blah blah.

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There's all this stuff.

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It takes a human to go in and fix that
reactively when we find it.

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Now agents are modeling, hey, if we did a cap
call today, what would that look like?

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It will find the error and then fix the error,
so that when a human does have when you are

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gonna go do the cap call, it's already fixed
and done.

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So that's like an example where we're using
agents in the background to effectively

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proactively do what typically humans only could
do reactively.

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So so we're doing that.

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The second thing is, they're not allowed to use
prompts.

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And this example is a great one, which is, our
view or my view of prompts is prompts is like

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the static HTML page in 1996, that says, oh,
that's the Internet.

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And, like, that wasn't the Internet.

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The Internet was something much more complex
and exciting and powerful.

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The static HTML web page, was, you know, UX,
version 0.01, of what the Internet was.

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And that's what the prompt is.

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ChatTBT had to figure out what's the easiest
way that we can expose LLMs to people, give

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them a prompt.

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That's the easiest way.

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But that's actually not the right UX for LLMs.

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And so they're not only used to prompts.

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They have to figure out how to access the LLM
without using a prompt.

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And that really means that they've they're
working on and thinking about how do we

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creatively embed LLMs behind the workflows of
what we're doing.

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For for example, my my case of, like,
proactively finding these these workflow

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issues, is a way of feeding the LLM, and the
user never knows it.

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My my view on AI is everybody is going, like,
AI this.

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You know, they're putting powered by AI, power
AI everywhere.

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Look at all the AI.

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And my what I told my product managers is if
you really get the AI right, I'll never know.

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It'll just work.

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It's the Turing test.

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I can't tell.

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The capital call just comes out, and it's
right.

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It just seems like a extremely competent human.

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Totally.

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Totally.

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And and, you know, it just works.

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Right?

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That's the Apple thing.

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Right?

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Why do we all love Apple?

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It just works.

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You know?

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And but there is so much complexity that goes
around making something just work, and that

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that's what we we talk a lot about.

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You know, Henry, I don't envy you because you
went after a space that everybody hates fun

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admins because nobody realizes how difficult it
is to do it well.

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So everybody blames kind of the the service
providers, not necessarily the process.

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Thank you for listening.

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Yeah.

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A a 100%.

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And and this is another thing to go full circle
about this, services to software.

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Very few, you know and software, industries
tend to have high NPS, Services industries then

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have low NPS.

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You know, no nobody loves legal services.

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Nobody loves accounting services.

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Right?

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Expensive mistakes, variability, and outcomes,
so you're not always getting consistency.

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That's exactly right.

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And it's exactly right.

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You nailed it, David.

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It's consistency.

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Why do chains win in restaurants?

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It's consist you would think of anything food,
but should be a a boutique business.

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Right?

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Like, you win by having the better chef.

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And it turns out, no, chains win.

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It's because people people even take a lesser
experience for a consistent one.

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And that's why services industries are tough
because it's so hard to do services

231
00:11:42,125 --> 00:11:42,625
consistently.

232
00:11:43,360 --> 00:11:45,519
That's why, you know, we talk a lot about this.

233
00:11:45,519 --> 00:11:47,120
Why does everybody love in and out?

234
00:11:47,120 --> 00:11:48,259
Because it's the same.

235
00:11:48,720 --> 00:11:51,779
And the Internet I go to, I know exactly what
I'm getting.

236
00:11:51,920 --> 00:11:53,360
That's a good quality product.

237
00:11:53,360 --> 00:11:57,095
Not great, but good, but the service is so
consistent.

238
00:11:57,794 --> 00:12:00,214
And that's why software businesses win.

239
00:12:00,274 --> 00:12:04,754
The problem, of course, is if you are
consistently bad, they hate everybody hates

240
00:12:04,754 --> 00:12:05,254
you.

241
00:12:05,794 --> 00:12:06,455
You know?

242
00:12:06,754 --> 00:12:09,554
And so it's one of these things that software
is, like, love and hate.

243
00:12:09,554 --> 00:12:14,259
Like, if we have a bug in our system, you know,
if if you have 1 if you're a service industry

244
00:12:14,259 --> 00:12:17,700
and you have one team that's not good, it just
affects the customers of that team.

245
00:12:17,700 --> 00:12:18,899
Everybody else is fine.

246
00:12:18,899 --> 00:12:20,519
The blast radius is small.

247
00:12:20,980 --> 00:12:23,879
We have a one bug in our software, affects
everybody.

248
00:12:23,940 --> 00:12:25,160
Blast radius is enormous.

249
00:12:25,845 --> 00:12:27,445
And they yell at us, and they hate us.

250
00:12:27,445 --> 00:12:29,125
And, you know, Henry, you're so stupid.

251
00:12:29,125 --> 00:12:30,584
You can't run a software company.

252
00:12:30,644 --> 00:12:32,324
But then we fix it, and it's amazing.

253
00:12:32,324 --> 00:12:33,464
Everybody loves us.

254
00:12:33,845 --> 00:12:38,024
So it's much higher beta, but much higher much
higher ROI.

255
00:12:39,470 --> 00:12:41,549
You're also an angel investor yourself.

256
00:12:41,549 --> 00:12:42,910
You're in a lot of great companies.

257
00:12:42,910 --> 00:12:44,690
Tell me about your angel portfolio.

258
00:12:45,870 --> 00:12:50,850
80%, my angel portfolio is, just for Mercarta
people.

259
00:12:51,629 --> 00:12:57,585
Carta has been an amazing place, unfortunately,
to create a ton of founders.

260
00:12:57,585 --> 00:13:00,884
I've had so many amazing Carta employees go
start their own company.

261
00:13:01,024 --> 00:13:02,325
It's driving me nuts.

262
00:13:03,585 --> 00:13:07,950
And then I you know, and they're always just
the best, of course, that go do this.

263
00:13:08,110 --> 00:13:09,470
And then I have to call them.

264
00:13:09,470 --> 00:13:13,710
And then they hire all the best people out of
Carta, and I have to call and yell at them and

265
00:13:13,710 --> 00:13:16,210
tell them stop recruiting my people.

266
00:13:16,830 --> 00:13:19,809
You know, we don't really lose people to other
companies.

267
00:13:20,830 --> 00:13:23,009
We lose people to starting their own companies.

268
00:13:23,735 --> 00:13:24,934
It drives me crazy.

269
00:13:24,934 --> 00:13:28,294
And so now I tell all employees at Carta, don't
be a founder.

270
00:13:28,294 --> 00:13:29,034
It's terrible.

271
00:13:29,174 --> 00:13:30,714
Nobody should ever do this.

272
00:13:30,774 --> 00:13:35,975
You should, you know, have a badge and come to
work every day, 9 to 5, and grind it out for

273
00:13:35,975 --> 00:13:36,615
somebody else.

274
00:13:36,615 --> 00:13:40,850
Being a founder is overrated, is now my pitch
to the current employees.

275
00:13:42,590 --> 00:13:46,529
So you have this unfair advantage where you
know exactly how good they are at execution,

276
00:13:46,590 --> 00:13:50,269
how smart they are, how good they are
recruiting, all these all these risk factors

277
00:13:50,269 --> 00:13:53,090
tip for typical angel investors are derisked.

278
00:13:54,294 --> 00:13:54,535
Yeah.

279
00:13:54,535 --> 00:13:55,014
Totally.

280
00:13:55,014 --> 00:13:56,375
I mean, they're they're so good.

281
00:13:56,375 --> 00:14:01,835
I know that most of them, 98, 99% of the people
that I left, I worked with directly.

282
00:14:02,054 --> 00:14:07,095
So I know how good they are, and they learn so
much from doing Carta because, you know, I put

283
00:14:07,174 --> 00:14:13,320
I did a post a while ago called founders wanted
at Carta.

284
00:14:13,320 --> 00:14:20,040
We love hiring former founders, future
founders, just people with founder DNA, because

285
00:14:20,040 --> 00:14:22,940
they build shit, and they're relentless.

286
00:14:23,514 --> 00:14:25,934
And so we we attract those types of people.

287
00:14:26,235 --> 00:14:29,214
And then, of course, when they're ready to hang
up, they're in single, we lose them.

288
00:14:29,834 --> 00:14:31,134
I know you say it facetiously.

289
00:14:31,195 --> 00:14:36,570
You hate that they go and start companies, but
it's a it's a significant recruiting tool to

290
00:14:36,570 --> 00:14:37,549
show these successes.

291
00:14:37,610 --> 00:14:38,009
Right?

292
00:14:38,009 --> 00:14:38,809
Come work here.

293
00:14:38,809 --> 00:14:40,269
Give 3 years of your life.

294
00:14:40,649 --> 00:14:44,909
Work hard, and then, you know, maybe I'll even
blip back here in your next company.

295
00:14:45,610 --> 00:14:46,589
It it's great.

296
00:14:46,970 --> 00:14:47,370
Yeah.

297
00:14:47,370 --> 00:14:49,629
It's, we call it the Carta Cartel.

298
00:14:50,454 --> 00:14:52,355
You know, it's our version of the PayPal mafia.

299
00:14:52,575 --> 00:14:57,615
Bring them all over for my house for dinner
once a year type of thing, to meet with them.

300
00:14:57,615 --> 00:15:01,215
I invest in in all of They they all bleed Carta
Blue.

301
00:15:01,215 --> 00:15:04,149
They all keep in touch and support each other,
end up hiring each other.

302
00:15:04,149 --> 00:15:05,190
I mean, that's also what happens.

303
00:15:05,190 --> 00:15:06,889
You know, one company goes out of business.

304
00:15:07,429 --> 00:15:11,509
They go they all go work at the other company
that's doing better and, you know, we have one

305
00:15:11,509 --> 00:15:16,870
comp one one startup drives me crazy, but, 90
per you know, it's not that big.

306
00:15:16,870 --> 00:15:22,085
I think it's, like, 15 or 20 people, but I
think 90% of the, the employees are Carta.

307
00:15:22,225 --> 00:15:23,904
So they just they just go in groups.

308
00:15:24,144 --> 00:15:28,625
I actually have a view that this is kind of the
new thing of angel investing, which is like

309
00:15:28,625 --> 00:15:34,529
alumni invest alumni ventures, you know, you
invest sort of in your your your university.

310
00:15:34,669 --> 00:15:34,990
Right?

311
00:15:34,990 --> 00:15:38,750
All the MIT people invest in support of their
like, I think what's happening is you're

312
00:15:38,750 --> 00:15:43,629
getting the Uber cohorts, the Stripe cohorts,
you know, the Carta cohorts, where they all

313
00:15:43,629 --> 00:15:46,394
just invest and support each other, because
they know each other.

314
00:15:46,955 --> 00:15:50,894
And that's that's how angel investing is gonna
start to to to coalesce.

315
00:15:51,675 --> 00:15:51,995
Okay.

316
00:15:51,995 --> 00:15:53,035
Very meta idea.

317
00:15:53,035 --> 00:15:56,254
You should start a card to fund that investment
to card to spin out.

318
00:15:56,875 --> 00:15:57,535
A 100%.

319
00:15:57,675 --> 00:16:00,795
We we actually do this, but it's balance sheet
capital.

320
00:16:00,795 --> 00:16:02,095
We we call it card adventures.

321
00:16:02,929 --> 00:16:04,070
There's 3 theses.

322
00:16:04,210 --> 00:16:09,250
1 is very conventional corporate VC, which is
we invest in strategic companies that we think

323
00:16:09,250 --> 00:16:13,190
are strategic to our ecosystem and potential
corp dev candidates in the future.

324
00:16:13,570 --> 00:16:19,764
The second is we invest in emerging managers
that are starting funds.

325
00:16:19,764 --> 00:16:24,884
The best way to create more founders is to
create more TPs that can go and find and mentor

326
00:16:24,884 --> 00:16:27,705
and cultivate and invest, in these founders.

327
00:16:27,845 --> 00:16:31,684
So that's a big part of our fund administration
thesis, was how do we reduce the cost of

328
00:16:31,684 --> 00:16:32,549
running a fund?

329
00:16:32,870 --> 00:16:34,330
Starting and running a fund.

330
00:16:34,789 --> 00:16:39,269
And and I think we were a big contributor to
the boom in emerging managers in the United

331
00:16:39,269 --> 00:16:45,029
States is because we took the cost of starting
and running a fund from a $150,000 to about 20

332
00:16:45,029 --> 00:16:45,690
to 30.

333
00:16:46,665 --> 00:16:51,545
And so, so we spent a lot of time on that,
helping emerging managers get going.

334
00:16:51,545 --> 00:16:57,325
And then the 3rd last bucket is really
investing in things that have card of interest,

335
00:16:57,625 --> 00:17:00,904
like card of employees, the things that we
think will make the world a better place for

336
00:17:00,904 --> 00:17:01,644
for founders.

337
00:17:02,399 --> 00:17:05,759
Does being an investor make you a better CEO?

338
00:17:05,759 --> 00:17:06,900
And if so, how?

339
00:17:08,319 --> 00:17:16,964
I'll I'll take the controversial opinion, of
this, which is I I think investing and CEO ing

340
00:17:17,044 --> 00:17:22,744
are 2 very different disciplines, and very few
people can do both well.

341
00:17:23,444 --> 00:17:29,044
The ones that can, I think, are, you know, the
great operators maybe like Ben Horowitz, you

342
00:17:29,044 --> 00:17:31,065
know, and Mark Andreessen and those guys?

343
00:17:31,250 --> 00:17:34,769
But they're they're the exception that, to me,
that proves the rule.

344
00:17:34,769 --> 00:17:37,830
And I actually think, controversial opinion
again.

345
00:17:38,130 --> 00:17:43,605
I actually think when they try to conflate
that, is when, people get into trouble.

346
00:17:43,845 --> 00:17:45,125
When investors are like, hey.

347
00:17:45,125 --> 00:17:48,345
I I I'll give advice to the founder on how to
run the company.

348
00:17:49,285 --> 00:17:53,865
That has never worked for me, minus a handful
of people like Marc Andreessen.

349
00:17:54,005 --> 00:17:56,369
You know, when Marc tells me how to run the
company, I listen.

350
00:17:57,250 --> 00:18:01,569
But historic you know, in general, when most
investors are telling me how to run the

351
00:18:01,569 --> 00:18:08,069
company, I I I I it'll sound facetious, but I I
actually say this seriously.

352
00:18:08,529 --> 00:18:11,910
Typically doing the opposite has worked out
much better for me.

353
00:18:12,805 --> 00:18:14,164
And and I actually have a theory.

354
00:18:14,164 --> 00:18:15,525
I'm not just trying to be cheeky.

355
00:18:15,525 --> 00:18:17,705
I I actually have a theory about it.

356
00:18:18,404 --> 00:18:20,184
Most investors are pattern matchers.

357
00:18:20,725 --> 00:18:24,105
You know, Henry, do this because I saw that
work over there.

358
00:18:25,605 --> 00:18:27,705
And and that's where the advice comes from.

359
00:18:28,220 --> 00:18:30,559
The best companies don't pattern much.

360
00:18:30,779 --> 00:18:34,779
Like, they just they if you did, you're not a
you're not a generational company.

361
00:18:34,779 --> 00:18:38,700
You're not an outlier by definition because
you're just doing everything everybody else

362
00:18:38,700 --> 00:18:39,200
does.

363
00:18:40,220 --> 00:18:44,884
And so my my advice for founders and investors
is founders are deal or sorry.

364
00:18:44,884 --> 00:18:46,184
Investors are deal makers.

365
00:18:46,644 --> 00:18:50,424
They and they they're pattern matchers and deal
makers as they should be.

366
00:18:50,724 --> 00:18:52,005
And that's what you use them for.

367
00:18:52,005 --> 00:18:52,244
Hey.

368
00:18:52,244 --> 00:18:53,444
What are they doing over there?

369
00:18:53,444 --> 00:18:54,164
Tell me about this.

370
00:18:54,164 --> 00:18:54,884
What have you seen?

371
00:18:54,884 --> 00:18:59,339
Like, that's what I like, give me information
because they see way more companies than I do.

372
00:19:00,700 --> 00:19:01,819
That's valuable to me.

373
00:19:01,819 --> 00:19:05,200
But telling me what I should do with that
information is not valuable.

374
00:19:06,059 --> 00:19:11,019
When investors try to tell CEOs, you know, how
to how to run the company, I think that's a a

375
00:19:11,019 --> 00:19:11,759
real problem.

376
00:19:11,819 --> 00:19:12,859
And I would say the same.

377
00:19:12,859 --> 00:19:15,775
Like, if I told investors, don't invest in that
company.

378
00:19:15,775 --> 00:19:16,734
Invest in that other company.

379
00:19:16,734 --> 00:19:17,715
They'd be like, what?

380
00:19:18,174 --> 00:19:20,355
You're just a CEO as they should.

381
00:19:21,055 --> 00:19:22,015
You know, it's really funny.

382
00:19:22,015 --> 00:19:27,070
My last joke about this is, you know, in the
early stage, I used to get investors that gave

383
00:19:27,070 --> 00:19:27,730
me books.

384
00:19:28,750 --> 00:19:31,570
Basically, like, how to be a better CEO book.

385
00:19:32,109 --> 00:19:34,910
And and you're supposed to say thank you.

386
00:19:34,910 --> 00:19:35,950
I appreciate it.

387
00:19:35,950 --> 00:19:39,734
I always found it, like, kinda insulting
because, like, what if I gave them a, hey.

388
00:19:39,734 --> 00:19:40,934
How to be a better investor book?

389
00:19:42,375 --> 00:19:45,914
You know, so anyway but that's my contouring
and take.

390
00:19:46,694 --> 00:19:52,454
Do you believe in founder mode and basically,
essentially micromanaging and coming in?

391
00:19:52,454 --> 00:19:56,880
And is there is there space for that, or do you
believe in kind of more of a managerial

392
00:19:57,339 --> 00:19:57,839
strategy?

393
00:19:58,380 --> 00:20:02,400
When that thing came out, I was like, I didn't
even know there was an alternative.

394
00:20:02,539 --> 00:20:04,380
Like like, when they go, oh, it's founder mode.

395
00:20:04,380 --> 00:20:06,319
I was like, what what was the other one?

396
00:20:06,700 --> 00:20:08,480
Like, of course.

397
00:20:08,984 --> 00:20:10,424
It makes zero sense.

398
00:20:10,424 --> 00:20:12,765
Like, what else would I do?

399
00:20:13,464 --> 00:20:14,664
You know, I'm the founder.

400
00:20:14,664 --> 00:20:17,404
I'm supposed to go in and go, why did we put
the button there?

401
00:20:17,785 --> 00:20:20,285
What color is the is the brand marketing?

402
00:20:21,579 --> 00:20:21,700
Yeah.

403
00:20:21,700 --> 00:20:22,599
What wait.

404
00:20:22,740 --> 00:20:26,039
Why did we spend money on, you know, this
event?

405
00:20:26,259 --> 00:20:26,579
Alright.

406
00:20:26,579 --> 00:20:29,619
Like, if I didn't do that, what what else would
I do?

407
00:20:29,779 --> 00:20:35,164
It was just I the the funniest thing for me on
founder mode was I I didn't know there was an

408
00:20:35,164 --> 00:20:35,664
alternative.

409
00:20:36,525 --> 00:20:37,404
So so yeah.

410
00:20:37,404 --> 00:20:39,965
I I mean, I don't even call it founder mode.

411
00:20:39,965 --> 00:20:41,825
I I call it building a company.

412
00:20:42,285 --> 00:20:45,164
I see this virtually in every top c I.

413
00:20:45,164 --> 00:20:48,205
I don't see a laid back CEO that's successful.

414
00:20:48,205 --> 00:20:49,259
At least I've never seen it.

415
00:20:49,660 --> 00:20:57,259
Another way of thinking about it is, how much
the CEO is involved in the company is it is

416
00:20:57,259 --> 00:20:59,119
correlated, how much the CEO cares.

417
00:20:59,660 --> 00:21:03,105
And so do you do you want a CEO that cares or
not?

418
00:21:04,224 --> 00:21:08,544
And, you know, the whole thing about founders
is they probably care more than professional

419
00:21:08,544 --> 00:21:11,025
CEOs, and we care a lot.

420
00:21:11,025 --> 00:21:13,984
Mark talks about Mark Andreessen talks a lot
about this with Musk.

421
00:21:13,984 --> 00:21:14,144
Right?

422
00:21:14,144 --> 00:21:15,585
Like, Musk has a question.

423
00:21:15,585 --> 00:21:17,172
He doesn't ask the chain of command.

424
00:21:17,172 --> 00:21:20,820
He goes straight to the to the guy putting the
tire, you know, on the Tesla.

425
00:21:20,820 --> 00:21:22,645
He goes, how come the tires fall off?

426
00:21:22,645 --> 00:21:24,241
You know, he he doesn't mess around.

427
00:21:24,241 --> 00:21:25,154
And I'm the same.

428
00:21:25,154 --> 00:21:29,855
And, you know, my my feedback to the team is,
do you want if they don't like it, I'm like, do

429
00:21:29,855 --> 00:21:32,514
you want me to not care, if the website goes
down?

430
00:21:33,214 --> 00:21:36,914
Like, if you don't want me to care that the
website goes down, this is the wrong company,

431
00:21:37,214 --> 00:21:38,034
to be at.

432
00:21:38,734 --> 00:21:43,554
I was watching Mark Andreessen interview talk
about Elon and about his 5 minute meetings.

433
00:21:43,669 --> 00:21:48,630
He goes to every single person in the company
and asks, what is your number one issue for the

434
00:21:48,630 --> 00:21:49,109
week?

435
00:21:49,109 --> 00:21:52,069
In 5 minutes, they talk about it, and then he
helps them solve that.

436
00:21:52,069 --> 00:21:54,650
And he does this over and over 100 of times a
week.

437
00:21:54,950 --> 00:21:56,630
So the ultimate founder mode.

438
00:21:56,630 --> 00:22:01,595
When will fund admin achieve full self driving
or be fully automated?

439
00:22:01,595 --> 00:22:02,255
What year?

440
00:22:03,994 --> 00:22:06,575
I'd like to say definitely before 2030.

441
00:22:06,954 --> 00:22:09,275
Like, we're we're 3 to 5 years out.

442
00:22:09,275 --> 00:22:14,075
One of the key metrics we we track is how
quickly we can get quarterly financials out to

443
00:22:14,075 --> 00:22:14,575
LPs.

444
00:22:14,849 --> 00:22:16,950
Our first year of doing this was 2021.

445
00:22:17,410 --> 00:22:20,710
It took us, you know, months before we got
everything out.

446
00:22:21,009 --> 00:22:22,450
Each year got better and better.

447
00:22:22,450 --> 00:22:25,990
And now this year, you know, it's January 24th
today.

448
00:22:26,690 --> 00:22:29,474
We're, you know, halfway, through our
customers.

449
00:22:29,474 --> 00:22:31,714
Like, we're we're moving super, super quickly.

450
00:22:31,714 --> 00:22:36,454
So I think 2 to 3 years from now, it will it
will basically be one click on reporting.

451
00:22:36,994 --> 00:22:41,570
Carta has a really interesting playbook in that
you make acquisitions, you buy servicing

452
00:22:41,710 --> 00:22:43,809
companies, you turn it into software.

453
00:22:44,509 --> 00:22:48,190
Walk me through how you go about doing that,
and what have been the strengths and weaknesses

454
00:22:48,190 --> 00:22:49,009
of the strategy?

455
00:22:49,230 --> 00:22:54,690
Started account tables in 2014, 4 9 a in 2016,
then fund administration in 2020.

456
00:22:55,704 --> 00:22:58,585
Now that we're in the fund admin business, it's
exactly the same.

457
00:22:58,585 --> 00:23:03,144
It's a it's a services industry with
accountants emailing back and forth that you

458
00:23:03,144 --> 00:23:04,605
call and talk to.

459
00:23:05,065 --> 00:23:09,880
That that playbook is, I I would say, the the
guiding principle of Carta.

460
00:23:09,880 --> 00:23:14,840
We look at everywhere where humans are doing,
work, usually with spreadsheets, and we say,

461
00:23:14,840 --> 00:23:15,080
hey.

462
00:23:15,080 --> 00:23:16,759
I think a computer could do this better.

463
00:23:16,759 --> 00:23:22,200
It's it's a super powerful approach because,
you know, labor is an inflationary expense.

464
00:23:22,200 --> 00:23:24,015
Like, it it just goes up over time.

465
00:23:24,015 --> 00:23:25,234
But software is deflationary.

466
00:23:25,375 --> 00:23:26,815
Software gets cheaper and cheaper.

467
00:23:26,815 --> 00:23:31,474
To do this well, you almost always have to
enter, as a services business first.

468
00:23:31,615 --> 00:23:36,414
2014, we hired a bunch of paralegals, to manage
cap tables, and then we built the software

469
00:23:36,414 --> 00:23:37,154
around them.

470
00:23:37,410 --> 00:23:39,490
49a, we hired a bunch of valuation analysts.

471
00:23:39,490 --> 00:23:42,369
And then we built the 49a around them.

472
00:23:42,369 --> 00:23:46,450
Fund admin, you know, I flew to New Jersey,
interviewed a bunch of fund accountants, and we

473
00:23:46,450 --> 00:23:47,170
hired a bunch.

474
00:23:47,330 --> 00:23:51,744
And they were using spreadsheets, and Xero, and
PDFs and Word docs.

475
00:23:52,284 --> 00:23:56,044
And then over time, we started building
software, behind them.

476
00:23:56,044 --> 00:24:01,744
And so you have to have an investor base, an
executive team that's comfortable with, hey.

477
00:24:02,125 --> 00:24:08,950
We're gonna constantly manage this portfolio of
software margins, software finance you know,

478
00:24:08,950 --> 00:24:12,549
software financial type business with services
type business.

479
00:24:12,549 --> 00:24:15,369
But if you look at our cap table business, it's
almost 90%.

480
00:24:15,430 --> 00:24:16,730
It's like 87, 88%.

481
00:24:16,869 --> 00:24:19,634
I mean, it's it's just, hemorrhaging cash.

482
00:24:20,115 --> 00:24:24,195
And then you look at some of the newer
businesses that aren't as mature yet, that are

483
00:24:24,195 --> 00:24:25,075
more services heavy.

484
00:24:25,075 --> 00:24:26,855
You know, they're running at much lower
margins.

485
00:24:26,914 --> 00:24:31,154
And so you just have to be able to understand
that and have an investor base that's that has

486
00:24:31,154 --> 00:24:35,369
the confidence that you can enter these lower
margin services businesses, but turn them over

487
00:24:35,369 --> 00:24:36,750
time into software businesses.

488
00:24:36,890 --> 00:24:37,869
And that's the playbook.

489
00:24:38,490 --> 00:24:43,289
Why is the fund admin business so much harder
to turn from services to software than than the

490
00:24:43,289 --> 00:24:44,190
previous businesses?

491
00:24:45,609 --> 00:24:47,630
It's incredibly complex.

492
00:24:48,045 --> 00:24:53,085
One of the advantages of being an entrepreneur,
that doesn't come from the industry is you have

493
00:24:53,085 --> 00:24:54,285
naivete bias.

494
00:24:54,285 --> 00:24:55,725
You're like, how hard could it be?

495
00:24:55,725 --> 00:24:59,184
And I thought that about cap tables, and that
was pretty hard on accounting.

496
00:24:59,644 --> 00:25:02,125
If I had known what I know now, I'm not sure I
would have done it.

497
00:25:02,539 --> 00:25:03,919
It's really, really hard.

498
00:25:04,940 --> 00:25:08,539
But the good news is something that's really,
really hard, it becomes very defensible.

499
00:25:08,539 --> 00:25:11,819
This is just a much more complex mechanism than
a cap table.

500
00:25:11,819 --> 00:25:13,980
Cap table, stock options, that's about it.

501
00:25:13,980 --> 00:25:17,819
Fund accounting, you're investing, you're
raising capital, you're you're doing quarterly

502
00:25:17,819 --> 00:25:19,414
reporting, You're doing valuations.

503
00:25:19,634 --> 00:25:22,375
There's just so much that goes into operating a
fund.

504
00:25:23,154 --> 00:25:27,255
You you make the argument that carda could be a
strategic tool for CFOs.

505
00:25:28,195 --> 00:25:31,735
Why is carda and why is fund admin strategic
for CFO?

506
00:25:32,115 --> 00:25:33,654
You talk to GPs.

507
00:25:34,460 --> 00:25:36,380
They don't care what accounting solution there
is.

508
00:25:36,380 --> 00:25:37,339
They're like CFO.

509
00:25:37,339 --> 00:25:40,079
And they don't really spend a lot of time with
the CFO.

510
00:25:40,460 --> 00:25:44,539
They they view it as, you know, CFO and private
equity, VC.

511
00:25:44,539 --> 00:25:46,779
I think more so in VC than than private equity.

512
00:25:46,779 --> 00:25:48,720
It's like, that's the back office.

513
00:25:50,894 --> 00:25:54,674
If I call my CFO their back office, he would
quit.

514
00:25:55,134 --> 00:26:02,994
My CFO sits next to me, you know, and his whole
team is outside, my office.

515
00:26:03,450 --> 00:26:05,789
They're they're not the back office at all.

516
00:26:06,649 --> 00:26:09,710
You know, the CFO is the number 2 at most
companies.

517
00:26:10,009 --> 00:26:17,149
I can't make a decision about Carta, a material
decision about Carta without consulting my CFO.

518
00:26:17,690 --> 00:26:20,184
Just can't because they run the business.

519
00:26:20,404 --> 00:26:24,644
That's happened, in operating companies like
that over the last 30 years.

520
00:26:24,644 --> 00:26:26,164
That's really, you know, CFOs.

521
00:26:26,164 --> 00:26:29,464
So then there's 2 people on our earnings call,
the CEO and the CFO.

522
00:26:31,045 --> 00:26:32,964
But for funds, that that hasn't been the case.

523
00:26:32,964 --> 00:26:35,259
It's like CFO back office.

524
00:26:35,259 --> 00:26:36,299
You know, I don't care.

525
00:26:36,299 --> 00:26:37,440
Let me deal with it.

526
00:26:37,820 --> 00:26:40,559
And there's this question, like, why is that?

527
00:26:41,339 --> 00:26:48,605
Why why don't CFOs in private equity and VC
have the same level that they that they have in

528
00:26:48,605 --> 00:26:49,585
operating companies?

529
00:26:50,285 --> 00:26:54,704
And my explanation is, because they don't have
good software.

530
00:26:55,644 --> 00:27:01,484
You know, before NetSuite and SAP Financials
and Anaplan and Pigment and all these tools

531
00:27:01,484 --> 00:27:05,640
that CFOs use to run the business, they were
basically glorified accountants.

532
00:27:06,420 --> 00:27:12,200
But then they built all these software tools
for these CFOs that turn them from bookkeepers

533
00:27:12,420 --> 00:27:14,855
to alpha creators.

534
00:27:15,555 --> 00:27:17,714
And I think that will be true over the next 10
years.

535
00:27:17,714 --> 00:27:22,055
I think the amount of data that we're
collecting about private capital and investing

536
00:27:22,194 --> 00:27:27,875
and running a fund and raising money and,
tracking and doing portfolio monitoring, all

537
00:27:27,875 --> 00:27:31,929
the tooling and data that we're starting to
pull together, that the CFO is responsible on

538
00:27:31,929 --> 00:27:32,670
these funds.

539
00:27:33,130 --> 00:27:37,609
If used well and we do a good job building it,
it will elevate the CFO to be a strategic

540
00:27:37,609 --> 00:27:38,109
partner.

541
00:27:38,250 --> 00:27:43,755
And and that's really the mission of Carta, is
to is to put the CFO in the room, when they

542
00:27:43,755 --> 00:27:44,654
make big decisions.

543
00:27:45,195 --> 00:27:49,275
Speaking of mission, you had a pretty big
strategic pivot 2 years ago.

544
00:27:49,275 --> 00:27:50,414
Tell me about that.

545
00:27:52,075 --> 00:27:54,075
Carta's been operating for about 11 years.

546
00:27:54,075 --> 00:27:57,375
We opened the doors for business, in January,
2014.

547
00:27:58,690 --> 00:28:06,369
And the thesis back then had always been, cap
tables win cap tables, and then, create a stock

548
00:28:06,369 --> 00:28:07,809
market, private stock market.

549
00:28:07,809 --> 00:28:09,990
We called it Nasdaq for private markets.

550
00:28:11,090 --> 00:28:15,924
And we thought the cap table business was gonna
be a small business, but it was the wedge to

551
00:28:15,924 --> 00:28:19,065
building the bigger business, which was the
stock exchange.

552
00:28:20,724 --> 00:28:23,544
Turns out we're both we're wrong on both
fronts.

553
00:28:23,845 --> 00:28:28,490
The cap table business turned out to be way
bigger than anybody including me thought.

554
00:28:28,490 --> 00:28:34,170
And then the stock market business turned out
to be, 0 for us.

555
00:28:34,170 --> 00:28:35,929
We could not we could not figure it out.

556
00:28:35,929 --> 00:28:41,465
And happy to share a ton of reasons why I don't
think why I don't think it worked out, or or I

557
00:28:41,465 --> 00:28:43,625
actually believe it's an intractable problem.

558
00:28:43,625 --> 00:28:45,805
It's unsolvable, at this point.

559
00:28:46,105 --> 00:28:50,664
And so then we spent the last, you know, 2
years figuring out what's next.

560
00:28:50,664 --> 00:28:50,825
Right?

561
00:28:50,825 --> 00:28:54,440
The whole thesis of this company was CapTables
plus stock market.

562
00:28:54,440 --> 00:28:56,059
And now now what do we do?

563
00:28:56,759 --> 00:29:04,759
And we're very, very lucky, so fortunate that a
small group of, card employees believed in this

564
00:29:04,759 --> 00:29:10,275
fund admin or fund accounting business in 2019
and 20, and convinced me to start it, or to

565
00:29:10,275 --> 00:29:12,535
allow them to start it, more specifically.

566
00:29:13,714 --> 00:29:14,994
And then that took off.

567
00:29:14,994 --> 00:29:20,755
You know, that fund the venture fund admin
business went from 0 to a 100,000,000 in, 52

568
00:29:20,755 --> 00:29:21,089
months.

569
00:29:21,409 --> 00:29:21,909
Cool.

570
00:29:22,210 --> 00:29:27,509
And so that that gave us a new lease, on what
we can do outside of cap tables.

571
00:29:28,210 --> 00:29:32,289
And then that was over the last 2 years, what
we spent time with the whole company figuring

572
00:29:32,289 --> 00:29:33,250
out is, hey.

573
00:29:33,250 --> 00:29:37,355
When you put cap tables plus fund accounting
together, you're now building what I call

574
00:29:37,355 --> 00:29:39,134
software for the office of the fund CFO.

575
00:29:39,674 --> 00:29:43,214
And that's what we're we're we're spending the
next decade working on.

576
00:29:44,154 --> 00:29:46,575
How big is the Fund Admin business today?

577
00:29:46,714 --> 00:29:51,179
This summer, spring summer, we'll cross about
half a 1000000000, in ARR.

578
00:29:51,640 --> 00:29:58,279
Of that half 1000000000, about 60% of it is our
start up cap table business that we're best

579
00:29:58,279 --> 00:29:59,000
known for.

580
00:29:59,000 --> 00:30:02,474
About 30% is our fund accounting, business.

581
00:30:03,414 --> 00:30:06,615
And then the last 10% is our newer private
equity business.

582
00:30:06,615 --> 00:30:09,494
And the capital business is about 10 years old,
11 years old.

583
00:30:09,494 --> 00:30:14,934
The fund admin business is about, 5 years old,
and the private equity business is about 2

584
00:30:14,934 --> 00:30:15,595
years old.

585
00:30:16,869 --> 00:30:23,269
And so the the the problem we have, the
existential crisis that Carda has is we're a

586
00:30:23,269 --> 00:30:24,150
victim of success.

587
00:30:24,150 --> 00:30:26,009
We've run out of oxygen in venture.

588
00:30:26,069 --> 00:30:29,450
We have 70, 80% of the startups, cap tables.

589
00:30:29,589 --> 00:30:32,169
We've got 50 or 60% of the venture funds.

590
00:30:32,744 --> 00:30:35,565
There's just not enough companies and venture
funds to sell to.

591
00:30:36,424 --> 00:30:40,664
So for Carta to to continue growing, we have to
get out of venture.

592
00:30:40,664 --> 00:30:44,204
We have to build, expand, our market.

593
00:30:45,210 --> 00:30:49,690
And the good news about that is the products we
built for cap tables and fund accounting and

594
00:30:49,690 --> 00:30:53,069
fund administration seem to be very
horizontally transferable.

595
00:30:53,130 --> 00:30:57,609
We started in the last couple of years taking
these products to to private equity, private

596
00:30:57,609 --> 00:31:00,109
credit, even real estate, you know, energy.

597
00:31:00,315 --> 00:31:03,534
We're getting a lot of traction on those other
fronts.

598
00:31:03,595 --> 00:31:07,454
And so the real question for Carta is, can we
take this playbook that was so successful

599
00:31:07,514 --> 00:31:12,474
successful in venture, take it to private
equity, take it to private credit, and expand

600
00:31:12,474 --> 00:31:13,855
the market pretty dramatically?

601
00:31:15,115 --> 00:31:18,730
And if we can't, we'll we'll be the startup
that never could.

602
00:31:18,730 --> 00:31:20,509
We we just never got out of venture.

603
00:31:20,970 --> 00:31:24,170
And those I think are 2 very binary outcomes.

604
00:31:24,170 --> 00:31:29,950
So the next, you know, 2025, 2026 are critical
years for us to see if we can cross the chasm.

605
00:31:30,474 --> 00:31:32,075
You're so synonymous with venture.

606
00:31:32,075 --> 00:31:36,734
How do you go into private equity with a new
identity or a new brand strategy?

607
00:31:37,274 --> 00:31:37,595
Yeah.

608
00:31:37,595 --> 00:31:38,734
It's it's hard.

609
00:31:39,274 --> 00:31:43,034
So, you know, if I walk into a venture fund
today and I'm like, hey.

610
00:31:43,034 --> 00:31:44,234
I'm Henry with Carta.

611
00:31:44,234 --> 00:31:45,599
You know, they're like, we know you.

612
00:31:46,240 --> 00:31:47,359
You know, we know what you do.

613
00:31:47,359 --> 00:31:48,000
We know it.

614
00:31:48,160 --> 00:31:51,759
You know, I walk into a private equity firm and
I go, hey.

615
00:31:51,759 --> 00:31:52,500
I'm Henry.

616
00:31:53,519 --> 00:31:57,059
I'm with Carta, and I'm the new fund admin, on
the block.

617
00:31:58,079 --> 00:32:01,044
They call security, and and escort me out.

618
00:32:01,044 --> 00:32:04,024
The last thing the world needs is another fund
fund administrator.

619
00:32:04,325 --> 00:32:05,524
There's too many of them.

620
00:32:05,524 --> 00:32:06,884
But if I walk in, I said, hey.

621
00:32:06,884 --> 00:32:08,424
I'm Henry with Carta.

622
00:32:09,044 --> 00:32:12,744
You may have heard of us because we do this cap
table thing in venture.

623
00:32:13,410 --> 00:32:15,890
So you may have done a a few minority
investments and seen it.

624
00:32:15,890 --> 00:32:16,289
Like, yeah.

625
00:32:16,289 --> 00:32:16,690
Yeah.

626
00:32:16,690 --> 00:32:17,490
That looks familiar.

627
00:32:17,490 --> 00:32:18,610
I I I've heard of you guys.

628
00:32:18,610 --> 00:32:19,330
You do cap tables.

629
00:32:19,330 --> 00:32:20,230
I go, exactly.

630
00:32:20,930 --> 00:32:24,769
Well, now what we do for cap tables in Venture,
we do in private equity now.

631
00:32:24,769 --> 00:32:28,955
And let me show you how we solve the cap table
problem for you And the waterfall problem,

632
00:32:28,955 --> 00:32:30,894
which is the biggest problem in private equity.

633
00:32:30,955 --> 00:32:34,154
It's not managing the cap table like in
Venture, where the hard part about cap tables

634
00:32:34,154 --> 00:32:35,994
in Venture is the employee option pool.

635
00:32:35,994 --> 00:32:40,255
The hard part about cap tables in, private
equity is the waterfall.

636
00:32:40,759 --> 00:32:46,700
We built a a very good, waterfall product that
manages the waterfalls of these very complex

637
00:32:46,759 --> 00:32:48,619
capital structures in these PE firms.

638
00:32:48,759 --> 00:32:50,039
And I said, let me show you that.

639
00:32:50,039 --> 00:32:52,299
And they're like, you have my attention.

640
00:32:52,440 --> 00:32:52,759
Right?

641
00:32:52,759 --> 00:32:57,184
If you can solve this cap table waterfall
problem for me, I will spend time with you.

642
00:32:57,565 --> 00:32:58,684
And that's our wedge.

643
00:32:58,684 --> 00:33:03,904
That's how we get in, because nobody does cap
tables, better than we do.

644
00:33:04,444 --> 00:33:10,109
And so once we get them on our cap table,
platform in waterfall, They go, oh, this is

645
00:33:10,109 --> 00:33:10,349
great.

646
00:33:10,349 --> 00:33:10,990
We love it.

647
00:33:10,990 --> 00:33:11,470
All this stuff.

648
00:33:11,470 --> 00:33:15,869
But you know what's really weird, Henry, is we
take all of the cap table waterfall outputs

649
00:33:15,869 --> 00:33:19,809
that you generate, and then we manually type it
in our accounting system.

650
00:33:20,509 --> 00:33:21,570
That's such a pain.

651
00:33:21,710 --> 00:33:22,769
They go, I know.

652
00:33:24,085 --> 00:33:24,724
Guess what?

653
00:33:24,724 --> 00:33:29,125
I also have an accounting system for you, and
it's totally integrated into that cap table

654
00:33:29,125 --> 00:33:30,024
thing you bought.

655
00:33:30,484 --> 00:33:36,000
And if you if you buy our our accounting system
and plug it into your cap table, system that

656
00:33:36,000 --> 00:33:41,759
you already got, we can we can seamlessly move
all those numbers through the cap table, the

657
00:33:41,759 --> 00:33:44,180
general ledger, and then to the LP reporting.

658
00:33:44,799 --> 00:33:47,940
And then they go, you have my attention again.

659
00:33:48,494 --> 00:33:51,295
And that's how we start talking about fund
administration for them.

660
00:33:51,295 --> 00:33:53,375
And so it's it's so similar venture.

661
00:33:53,375 --> 00:33:54,755
That was our playbook in venture.

662
00:33:55,055 --> 00:33:59,134
When the portfolio company be a cap table and
then you leverage that relationship to win the

663
00:33:59,134 --> 00:34:02,674
fund accounting to the venture fund, we're
taking that same playbook to PE.

664
00:34:03,134 --> 00:34:06,789
You go in with such a dominant product that
they know that you could do that.

665
00:34:06,789 --> 00:34:08,010
It's an easy sell.

666
00:34:08,150 --> 00:34:12,869
It's an easy solve, and then you basically
upsell once you have the relationship, and they

667
00:34:12,869 --> 00:34:15,849
know that you're highly confident that you can
execute on on the vision.

668
00:34:16,445 --> 00:34:16,605
Yeah.

669
00:34:16,605 --> 00:34:17,324
That's right.

670
00:34:17,324 --> 00:34:23,324
But I also think, what's exciting is nobody has
tried to solve this captive problem for private

671
00:34:23,324 --> 00:34:23,824
equity.

672
00:34:23,885 --> 00:34:27,905
Just like 10 years ago, nobody tried to solve
the crap captive problem for Venture.

673
00:34:28,380 --> 00:34:30,299
And so when we come in and and we say, hey.

674
00:34:30,299 --> 00:34:32,480
We're gonna solve this cap table problem for
you.

675
00:34:32,779 --> 00:34:35,420
It's like water to a a person in the desert.

676
00:34:35,420 --> 00:34:36,380
They're just like, I

677
00:34:36,859 --> 00:34:39,839
If you're successful, what will Carta look like
in 2030?

678
00:34:41,125 --> 00:34:45,065
I think we will look, like we do today in
venture.

679
00:34:45,765 --> 00:34:51,445
You know, Avocado is the brand for cap tables
and funds and, you know, the what I would like,

680
00:34:51,684 --> 00:34:55,684
humbly, hopefully, but say, like, the what is
becoming the operating system for venture

681
00:34:55,684 --> 00:34:56,184
capital.

682
00:34:57,329 --> 00:35:04,470
I think, I hope and think people in 2030 will
say the same thing, but about private capital.

683
00:35:05,090 --> 00:35:06,610
This is how private equity runs.

684
00:35:06,610 --> 00:35:08,230
This is how private credit runs.

685
00:35:08,369 --> 00:35:11,744
This is how, real estate energy runs.

686
00:35:11,985 --> 00:35:17,985
That everything that we do in RentShare is now
cross, horizontal to to all private asset asset

687
00:35:17,985 --> 00:35:19,525
classes and alternative investments.

688
00:35:20,224 --> 00:35:22,064
Well, Henry, we've known each other for quite a
while.

689
00:35:22,064 --> 00:35:24,084
It's great to have have this conversation.

690
00:35:24,464 --> 00:35:26,005
Look forward to sitting down soon.

691
00:35:26,144 --> 00:35:27,024
So much fun, David.

692
00:35:27,024 --> 00:35:28,164
Thanks for having me.