When Charly Kevers took his mentor’s advice and swapped a corporate development role at Hewlett-Packard for a tour of duty as a director of HP’s investor relations arm, he looked forward to tackling a variety of IR requisites, including crafting the messaging that follows a change at the top.
Two years and four HP CEOs later, Kevers exited HP knowing that his IR term (with its extra helping of CEO turnover) had afforded him a stint unlike any before it at HP.
“It’s a highly stressful role when you are standing in front of the Fidelitys of the world and they’re asking you a lot of questions beginning with ‘What does it mean for the business and what does it mean for my stock,’” explains Kevers, who subsequently stepped into a corporate development role at Salesforce.Read More
“That experience has since helped me by allowing me in many cases to rationalize things by saying, ‘Well, this is not as bad as what I dealt with there,’” comments Kevers, who these days, as CFO of Carta, appears to be focused as much on internal communications as he is on external PR.
“Having worked mostly for public companies, I‘ve been trained to not talk about any number that isn’t public information, but here at Carta, we are very transparent,” remarks Kevers, who adds that he is routinely surprised by how Carta employees respond to numbers.
“We’ve been very transparent about where we want to save money and have sought to explain why we care about gross margin and metrics like sales efficiency and other things that contribute to profitability, and I have been surprised by how much people will care about them and then take ownership of them by finding ways to improve these metrics,” reports Kevers, who notes that Carta’s efforts to achieve greater transparency are visible on the company’s P&L, which now reports the gross margin for different product areas along with product-specific marketing and R&D spending.
“We can now look at how the Rule of 40 applies to every one of our product areas, so the board room discussions can be much more in-depth when it comes to discussing tradeoffs” observes Kevers, who seems to harbor as much enthusiasm for transparency outside the boardroom as he does for clarity inside its doors.
“If you’re transparent and explain what metrics need to be watched,” he says, “doing so really does help to drive productive discussions between finance and the rest of the business.” –Jack Sweeney
“My advice to my younger self is the same advice I give my team today—anticipate. Always be two (or better yet, 3-4) steps ahead of your manager, your CEO, or your board. As a CFO, be the person who has asked the questions that you think will come from the CEO or Board. This will push you to be more curious, understand problems more deeply, think beyond the financials and allow you to be more proactive with some of your key stakeholders.” – Charly Kevers, CFO, Carta
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CFOTL: Tell us about Carta … what does this company do, and what are its offerings today?
Kevers: Maybe the simplest way to summarize what we do is to suggest that we be thought of as infrastructure for the private markets. What our overall business does is to provide a lot of tooling for folks who operate there. Private companies are where we started, in 2012 and 2013, by providing all of the infrastructure needed to issue equity to employees and investors. Previously, all of this information had been paper-based, sitting in spreadsheets, really not managed centrally, and difficult to access. All that we did was basically to automate a lot of these workflows and allow all of this data to be centrally managed—we weren’t really interested in becoming a source of truth as to who owned what of the company.Read More
This, of course, translates into, “Well, how do you help employees to exercise their options? How do you help the finance teams to do all of the finance calculations around stock-based compensation? How do you make all of the compliance requirements a lot easier to manage for legal and finance teams?” Now we are talking about end-to-end evaluations, the four end evaluations that are related to issuing equity. We manage this full workflow for everyone from firms with just the two founders all the way up to public companies. The vast majority of our customers are private. They are what we focus on, but we scale from a couple employees or a couple of founders all the way up to thousands of employees. We manage all of the complexity that they need to handle from an equity standpoint. This is one side of our business—managing companies and employees.
The other side actually has to do with the investors who invest in these companies, which we’ve effectively made it easier to do. In the early days, if you owned shares in the public space, you would go on E-Trade or Schwab or—pick your broker—to know what you owned. There was no way for private investors to understand, “What do I own in one pane of glass?” They would have to call their lawyers, who kept track of their assets on a spreadsheet, and it would be very difficult for anyone to see what was really happening with their companies. Because we had a lot of these private companies on our platform, we were then able to begin surfacing such information for investors.
More recently, this has translated into us now being a provider of fund administration services, which can be thought of as management of the back office for venture funds. We now have a full platform, with a general ledger, that we’ve built ourselves. Think of this as running the accounting for all of these funds, including providing all of the communication back to the limited partners who are the investors in the funds. Ironically, this now indeed puts us in a place from which we are helping to manage the source of truth around ownership for these companies.
Carta | www.carta.com | San Francisco, CA