Beyond point solutions: Automating the valuation workflow with the Carta ERP

A breaking point for middle office overwhelm 

The middle office status quo is broken. On recent calls with private equity valuations and finance teams, we’ve heard about the stress and backlog: 

• Weeks spent chasing portfolio companies (PortCos) for hundreds of industry-specific KPIs. 

• Getting caught between legacy software systems that don’t talk to each other…meaning manual data entry back-and-forth. 

• Copying and pasting between deal models and waterfalls. And worrying about “fat finger” errors. 

• Wrestling with unique, multi-entity waterfall models for two days (and nights). And knowing most “waterfall software” isn’t sophisticated or customizable enough to help you. 

The solution is not more siloed software or fragmented tools, but a fully integrated ecosystem—a network ERP for private capital. Carta offers an integrated solution that connects cap tables, portfolio company financials, waterfall, data warehousing, and fund admin into a single, audit-ready valuation workflow.

Seamlessly connecting the entire middle office with Carta 

Carta’s AI-powered technology reimagines the entire middle office process for a faster, seamless journey from collecting raw portfolio company data to a completed valuation report ready to be sent to auditors, update LPs, and calculate carry. 

The valuation workflow (and how Carta helps along the way) 

Step 1: Automated Data Collection

Transition from manual entry and hundreds of emails to an AI-powered engine that extracts PortCo financials and KPIs automatically.

Live Carta cap table data automatically flows into the valuations engine, eliminating manual data entry errors that can cause inaccurate waterfall modeling.

For cap tables not on Carta and other company financials and KPIs, the Carta Data Collection tool automates the process of gathering information from PortCos. Just set up data requirements leveraging 50+ default KPIs and unlimited custom quantitative or qualitative metrics, and schedule request cadence in the app. Requests and reminder emails will go out automatically. As soon as PortCos upload documents, Carta’s AI capabilities will extract the data and directly pipe it into the valuation engine. No need for a tangle of email threads with PortCos and constant monitoring of collection status. 

Step 2: Enterprise Value calculation

Support for multiple methodologies, out of the box. Including DCF, M&A transactions, and public comps. A system flexible to meet your different needs, and efficient enough to create different versions of valuations quickly—adding defensibility when you reach similar outputs based on varied methodologies. 

Step 3: The multi-entity waterfall

No matter the complexity of your deal structure, best-in-class multi-entity waterfall allocates proceeds across all the layers between the operating company and the fund, based on both the ownership structure from the cap table and additional rules and criteria from supporting operating agreements. It also aggregates a firm's total economic interest across parallel entity paths. 

Step 4: Downstream accounting & reporting

If you are a Carta fund administration customer, when you finalize your valuations, we create the General Ledger (GL) entry for you and update the Schedule of Investments (SOI) automatically. LPs can connect directly to the fund’s general ledger and capital accounts for seamless fund administration. LPs get greater transparency and control with real-time data insights and visualization. 

All your Carta data, including the collected PortCos financials and KPIs, will flow into Carta Data Warehouse, where you can see past valuations, compare quarter-over-quarter, and easily send information to Snowflake for custom querying. 

Always innovating 

Carta is always pushing further to make the valuation process easier for private equity teams. Learn more about where our products are headed this year here.