MVS 2026: Fireside Chat With Henry Ward

Yeah, thank you so much for having me back. I don't do a ton of these, but this is the one I always say yes to if Tim will email me. So I love coming to this one. It's very special because it's a veteran closed door where we get to really talk about what it's like to be a vet in Silicon Valley. This is a fireside chat and we'll talk about anything you guys want to talk about. But I thought it might be helpful just for fun for me to do a pitch to all of you. And I remember in the early days I got very lucky to see a couple of great founders pitch like Stuart at Slack and Eric at Zoom and Vlad at Robinhood. And I got to see their pitches in the early stages. They were a little bit ahead of us. And I saw what a good pitch at that stage looked like and it really helped me figure out what my story should be like. So I thought it might be helpful. I'll just give you a really shortened version of it, but I'll do a four-slide investor pitch for how I pitch Carta. And we're not going public. Nothing's going to happen like that. But this is the pitch I give public investors. So if I'm talking to a T. Rowe and they're like, 'Tell me about what's going on at Carta.' These are the four or five slides that I share. So, I thought I'd do a quick 7-minute pitch to all of you and then we can jump into more fun stuff. So, I'll stand just because I can't see the screen. So, just a lot of people have heard of Carta, but what do we do these days? Quick fun facts about us just to orient you. So, we're about 11 years old. About 500 million in revenue. We've got about almost 2,000 employees worldwide. We've raised a billion dollars. I'm shocked too for this business. I'll try to explain the justification for that. But we've raised it across a bunch of venture capital but more recently the last round we did was 500 million bucks and it was mostly spread across private equity investors including Silver Lake and Premier and we've got offices around the world. New York, San Francisco are kind of co-headquarters. But we've got offices in London, Singapore, Abu Dhabi now, Luxembourg, Australia. So we're expanding the Carta footprint globally. And I'll explain why that's important in a second.

So what do we do? We're an ERP for venture capital and private equity and private credit. So what does that mean as an ERP? Well, our view of Carta is private markets is a three-layer network where you start with an asset, fund, and allocator. We obviously started in venture where startups were issuing equity to venture funds and then of course these venture funds then had to issue LP commitments to their LPs. Obviously there's edge cases like fund of funds don't fit quite right into a three-layer network but it's close enough and everything we do at Carta follows this three-layer network of asset, fund, allocator. We've expanded beyond venture which were our roots to now we do things in private equity where we have an asset as a fully owned buyout leveraged buyout company in private equity or even private credit where you now have loans against companies which again we call assets but those loans flow up into funds that flow up to LPs so asset, fund, and allocator.

So what does that mean? Well, this is what we call an ERP for private capital. So you see on the lower row we've got asset, fund, and allocator. And then each column is the asset, fund, and allocator in our network. Each row is the back office, middle office, and front office of these businesses. So we started obviously in the lower left corner of equity management aka in venture we call it cap tables, in private equity we call it waterfalls. We started in this equity management box today of our 500 million in revenue that's about 370 of it. That's about two-thirds of the book. Once we won that box, it gave us the right to win in fund accounting and fund financials. You might ask, why would cap tables make you go into fund accounting? Well, it's a very similar problem. Cap tables is who owns a company, who invests in a company. Fund administration is who invests in the fund. And now we're doing accounting for them. What's really interesting though is we are an accounting company. People think of us as a cap table company, but the cap table is really just the second leg of accounting for an operating company. And an operating company, the problem of accounting is I take revenue, I deduct expenses, and I put everything into retained earnings. And that's what the shareholders have rights to. The second part of the equation is how then I distribute that retained earnings to the shareholders. And that's what the cap table is. We're the second half of this problem of how do I get revenue in a business and get it to the shareholders. But what makes operating company accounting and cap table simple is everything goes into the retained earnings and you just push that through the cap table and it's fungible. You just have a bucket of money that gets pushed through the cap table. Fund accounting is exactly the same problem with one exception. There's no such thing as retained earnings in funds. In partnership accounting you have to track P&L at the partner level. Everybody who is a fund manager here knows that. And that's what makes it complicated. And that's what we figured out was we're really an accounting company. But with operating companies, we only had to do the second half of accounting, which is the allocation of economic value to the shareholders. In fund accounting, we have to do the whole thing. And that's how we got into fund accounting.

On the far right is our allocators. This is how do the LPs invest in these funds? How do they find the funds? How do they track their commitments? How do they do their accounting on cap calls and distributions and K-1s? In the middle row we've got the middle office which tend to be things like portfolio analytics, valuations. You know one way to think about it for the accounting nerds is the bottom row is cash accounting. How do I report the cash that we've invested and return to our investors for the K-1s. The second row is GAAP accounting. How do I strike NAVs on these funds? And then of course the top row is the front office, the CRM. If Carta today is tracking all the deals you're doing and what you own, we'd also love to track all the deals you're going to do. If we're tracking all the LPs that you have, we'd also like to help you find your next LPs and those things should be integrated. Today, we don't have a CRM but stay tuned. We should have one very, very soon.

The other thing we found interesting in our ERP is this model works great in venture and private equity. Every module works well and you can start in the lower left corner like we did and keep working your way out. If we did two small changes, we changed equity management to loan operations and portfolio monitoring and covenant monitoring. This now works for private credit. One of the criticisms of venture of course and Carta is that our asset class is too small. Venture is just not a big enough market. Private equity is about eight times the size of venture and then private credit is about three times the size of private equity. So as we keep moving further up the stack and into different asset classes, the dominoes we can drop keep getting bigger.

So you might ask, Henry, there's a lot of theory, a lot of boxes. How do I make sense of what this product is? Well, there's a lot of software. We raised a billion dollars to build all these things. There's a lot of software behind this, but I'll show one sort of video demo of the product. It's just one page and it's the best example I can give of one screen in the product that tries to highlight everything that happens behind the scenes and it's this thing we call visual accounting.

This is visual accounting for private equity part of fund administration and Carta's ERP for private capital. Your general ledger is usually a black box. Carta visual accounting transforms your GL into a live map of your capital structure. Here we can see the entire fund at a glance. At the center, you have the primary vehicle along with its associated feeder and blocker entities. At the top is the fund's SPV and its separate assets and investors. Drill down into a portfolio company like Vidian Cloud Services to audit the cost basis against current fair market value. You can trace exactly how that unrealized gain flows upstream to the master fund's net asset value. Afterwards, verify how it impacts a specific LP's ending balance, seeing their net operating income in real time. No matter the complexity of your fund, visual accounting makes it easy to find all of your key stakeholders and entities. Understanding the economics of an LP is simple, even if they're invested through a separate entity, such as a feeder fund. But the real power for a CFO is the valuations view. This allows you to isolate specific events in your fund. Let's see the impact of a valuation change. When you book this gain, Carta doesn't just update the asset value. It instantly runs the fund's waterfall logic. It calculates return of capital, clears the preferred return hurdle, and executes the GP catchup. You'll see exactly how the accrued carry crystallizes on the GP balance sheet. And finally, we can even see how the remaining value increases the NAV for your limited partners. Only Carta's connected ERP brings your ledger, valuations, and carry into one system of record.

And the reason I like to show that video is you can't fake that. That's not like a Lucidchart. That's generated from the underlying general ledger and cap table. So you need the cap table of the asset, the company you invested in. When that cap table gets updated, it needs to connect directly into the GL. The GL then has to update the new NAV or the new mark that you put on this company and then update the fund waterfall that then updates all the LPs. All of this has to be in one system to get this to work. And so that's why I like to show that as one view into what we're building at Carta.

So that's my seven-minute explanation of what Carta is working on and what we're doing. And we just continue to take this, obviously we started in venture that's where we grew up, but now we spend all our time in Midtown New York pitching this to private equity CFOs and private credit CFOs. So anyway I thought that might be a helpful not just introduction to Carta but if you're wondering like how growth-stage CEOs pitch what they do to investors, this is one example.

Well, it's changing every day. Four months ago, we're like, we're going public. And now, I don't know if people pay attention, but SaaS businesses are getting crushed these days. And so now we're like, man, private sounds pretty good. So, you know, it all depends. There's no rush. We're making money. Liquidity is fine. You know, we'll be independent I think for a long time. It's just a question of are we better off independent as a private company or as a public company. And a lot of it I think will be dictated by the markets. We'll see how this current bear market flushes out.

Definitely premiums are way higher in private markets. You know, the classic example is they are different businesses and Ramp's doing some exceptional things. It's nothing against Ramp versus non-Ramp but you can just see how private markets are valuing Ramp versus public markets are valuing non-Ramp and on basic metrics they're similar levels of scale and size and profitability and all of those things. So public markets right now are pretty harsh. You know, I think something that might be helpful I didn't know when I was an early stage investor or early stage founder is there are different types of investors and in venture there isn't, it's just there's one type of investor a venture investor and they're looking for sort of a 100x outcome and something innovative and novel. As you get further kind of up the growth curve there are actually different kind of investors. So there's investors that care a lot about just growth, like these kind of growth equity investors and growth at all costs. They're kind of the extension of venture. And then you can find like private equity investors which are like well actually we don't care as much about the growth side. What we care about is leverage. And so you may be growing 30% but losing money. We'd actually happily take you down to a 20% growth rate, but now make you a 10% free cash flow, and we'll start trading you on a beta versus revenue. And basically, an investor values you on revenue, they're really valuing on growth. And if they're valuing on a beta or cash flow, they're valuing on profitability. That's sort of one way to think about it. When you talk to public investors, there's kind of the third dimension which is predictability. And so most of the investors there are looking for predictability and consistency and reliability in forecasting and meeting your forecast. But even within that group there will be some that will be more growth-oriented and some that will be more free cash flow. So for example I talked to an investor I said if you had the choice which would you rather see a 20 and 20 or 30 and 10 or 10 and 30 and he's like 20 and 20 because I just like 20% free cash flow. I just like that, you know, I think that's like a good thing. Because growth can go up and down, but if you're consistently producing 20% free cash flow, I can rely on that. And then you talk to the next one that's a growth equity. It's like 40 and zero. Like just go for it, right? Do it all. I don't care about the profitability. And so figuring out I think in venture sort of this view is like they are all kind of the same. But when you actually get into later stages, the diversity of investors and what types of profiles of businesses that they want change. And I think that's something maybe important to keep in mind in the early stages, which is in the venture world, everyone's going to push you just shoot for the 100x. But as you do get a little bigger, you do have choices. Like you don't have to go to the 100x. You could do like I'm doing a 10x but I'm doing it methodically, systematically as opposed to rolling dice or gambling on ideas. And then you probably have to get out of the Silicon Valley echo chamber for investors, but there are investors that like that kind of stuff. And so do the right kind of growth model for your business and then go find the investors that like it.

Yeah, there's definitely the cost of over-raising, of over-capitalizing is like a real thing and you just see it all the time. Like we're for example, we're super acquisitive right now. So we did three transactions or sorry two transactions last quarter. We're closing on a third and we've got two more coming by the end of the quarter. And you know, so I'm talking to founders all the time about buying their companies. And the founders that raised an appropriate amount for where the business was, one, it's way easier to have that conversation and they make a ton more money, like a ton more money. And then the ones that overraised, it's very hard to get a deal done. Even when the founder wants to do it, it's just very hard to get a deal done. And then even if you do, the founder is usually the one that gets hurt on it. And so we're seeing companies where they raise a ton of money, you know, at like literally a company we're talking to, I don't think anything's going to happen, but they raised it at 250. If you actually did growth multiples, it's worth 50. That's barely the preference stack now. And that kind of thing happens a lot. And so I do think there is this problem that there is this conflict of interest between founders and investors where if you're a founder, you've got all your eggs in your company. If you're an investor, that's one egg of 20 effectively for you. This is your preferred stock. For them, it's actually their call option. And so they'd actually a zero is fine for them. They want zero or 100. And they'd actually take a 90% chance of zero for a 10% chance for 100, but that is probably not your risk profile as a founder. And that doesn't mean venture is bad or anything like that, but it just means you have to understand where you are on that curve and raise appropriately against that risk curve.

Yeah. So I haven't done an early stage pitch in a long time. So you might be better at what it's like now. I can tell you what I've often said from my experience in the early days of doing this, you know, 10 years ago was back then I think a lot of founders feel like if an investor says no, it's really a reflection of their pitching ability. Like I just didn't pitch well enough. I wasn't charismatic. I didn't have the je ne sais quoi. I just I just, you know, I messed it up. And my experience was so much of pitching in early stage is not, you know, I did a good pitch. So much of pitching in early stage was finding the investor that your problem resonated with. And so it's a filtering exercise, not a sales exercise. And I could tell, you know, early on I could tell immediately, you know, when the first two minutes I could immediately tell if they were going to invest or not. Like you just knew. They were like, why would anybody need cap table software? Or they were like, I hate cap tables. It's so annoying. And you just knew. And I could have been terribly boring. But they would have got it. They would have got the problem. And so I think one of the things that founders get really discouraged on is they do 10 pitches, nobody cares about their problem, because they found unfortunately the 10 people just don't care. And they think it's because they suck versus well, they didn't find the people that cared about their problem. I don't know if that's still true, but my guess is that it is because for a seed stage investor that's looking at 2,000 pitches a year, how do they filter? Frankly, without data. There's no like data. So the only way they can filter is do they find it interesting and do they want to spend the next 10 years working with this person on this problem. And I think there's sort of this view like from founders like these investors are smart they're not that smart. I think a lot of these investors were entrepreneurs that weren't that good, you know, because if they were good they'd still be doing it. And so you know, it's just they didn't resonate to your problem.

Yeah, it is a weird thing like why then why do they take these meetings that they don't even care? And again, it's like everybody's rational even if the market is irrational. And the reason they do it is many of them are actually part of the metrics they have to perform is number of meetings that they take.

And so they just have to do these meetings and they have to do the research and hey now we're smarter on this field and I've got another company to track even if I don't know and just in case it does become a thing like I've already built a relationship and they're not really investors they're salespeople that sell money. And so how do you sell money? You talk to as many people as you can and then when they need the money you try to be there first.

It's a great question. I don't know.

Yeah. I believe it.

Yeah, we're all in on AI. It's what I do every day. I'd say 80% of my job is just doing change management at Carta and moving us more into an AI world. One way to understand what's happening in SaaS multiples right now in the public markets is sort of all the talking heads and pundits will say like hey AI is replacing all these SaaS companies these SaaS companies are dead. What I think is actually happening is a lot of the SaaS businesses that didn't have a defensible moat or network effect or something that made them really durable, AI will chip away at them quicker than the ones that are systems of records that have a bigger moat and I'm not saying they aren't at risk but they certainly have more time to figure it out. But there will be some SaaS businesses that have a defensible moat and are able to transition and move from call it trad software to AI software and they I think will actually be bigger winners because they've already got a head start from native new AI applications that they can build on and accelerate even faster. So, for example, think NetSuite. You would have thought NetSuite would get killed by an AI competitor, but nobody's leaving NetSuite. Not quickly. It's a hard thing to rip out. And if Ellison and Oracle, which they're betting big on AI, can actually sprinkle some AI on NetSuite, it's hard to imagine that anybody actually beats them anymore. Like they actually get harder to pull out. They actually become a better software platform and a better company. And so I think the market is trying to figure out which companies have that moat and which ones are going to make the transition. And as markets do, when they don't know, they just sell everything and they wait to figure it out. And so I think of it less as like it's a broad SaaS is going to suffer. But I do think it's going to separate winners and losers through this transition cycle. And the market just hasn't figured that out yet. And obviously we're subject to it. We're a SaaS business and our job is to, I mean, this is where I spend all my time. The existential threat is that we don't navigate through this transition and come out the other side ahead of everybody versus behind.