AngelList Vs. Carta: Choosing Right Platform For Startup Financing

Raising capital is a pivotal moment for any startup. AngelList and Carta are two leading platforms that provide key services to support early stage fundraising and cap table management.

This comprehensive guide examines how AngelList and Carta compare for startups seeking financing, liquidity, and investor management capabilities.

A Brief Overview Table

Feature	AngelList	Carta
Main focus	Investor introductions	Equity management
Key features	Investor matchmaking, syndicates	Cap table, valuation, exits
Funding sources	Angels, VCs, crowdfunding	Angels, VCs
Pricing	Free for startups	Subscription plans
Ideal for	Early stage capital	Cap table management

Introduction To Angellist And Carta

AngelList is an online platform that connects startups with angel investors, venture capital firms, and syndicates. It provides investor matchmaking and capital introduction services.

Key features include:

• Automated matching algorithms to find the right investors.
• Access to prominent startup investors and VC firms.
• Creation of “syndicates” for pooled angel investments.
• Job board to hire for startups.

AngelList is free for startups to use. Revenue comes from fees charged to investors.

Carta offers cap table, valuation, equity, and liquidity management software for private companies.

Key features include:

• Cap table management.
• Scenario modeling and valuation.
• Support for equity grants, exits, tenders.
• Limited liquidity through external investment vehicles.

Carta charges a subscription fee starting at $300/month for startups.

Comparing Core Services And Benefits

While there is some overlap, AngelList and Carta serve different primary purposes:

Fundraising – AngelList’s main focus is helping startups raise capital through introductions to angels, VCs, syndicates, and investors on its platform. Carta does not directly facilitate fundraising.

Cap table management – Carta provides automated cap table upkeep, valuation, scenario modeling, and equity management capabilities that AngelList lacks.

Investor relations – Both AngelList and Carta provide CRM-like tools to manage investor relationships and LP stakes. Carta has more robust investor profile tools.

Liquidity – Carta offers some secondary liquidity to shareholders by pooling external investments. AngelList enables liquidity through its syndicates.

Hiring – AngelList has a large startup job board for recruiting whereas Carta does not have hiring features.

For early stage fundraising, AngelList provides more direct value through investor introductions. For cap table management, Carta has superior purpose-built tools.

Pros And Cons Of Angellist For Startup Fundraising

Pros:

• Free to use for startups.
• Access to prominent startup investors.
• Automated investor matching.
• Syndicate investment capabilities.
• Can apply to many investors simultaneously.

Cons:

• Mixed success rate/not guaranteed funding.
• Mostly useful for early stage rounds.
• Limited support for international startups.
• Syndicates can add complexity.

Pros And Cons Of Carta For Cap Table Management

Pros:

• Purpose-built for cap table management.
• Automates equity grants, exits, valuations.
• Scenario modeling for valuations.
• Investor profiles and LP management.
• Some secondary liquidity options.

Cons:

• Monthly subscription fees.
• Steep learning curve.
• Less relevant for early-stage startups.
• Additional fees for filing/legal documents.

Which Startups Are Ideal Users?

• Early stage companies focused on raising a Seed or Series A – AngelList provides the most value here through its investor matchmaking for early capital.
• Startups managing complex cap tables and later stage rounds – Once startups begin issuing options, conducting exits, and raising Series B+ rounds, Carta becomes more beneficial for cap table upkeep.
• Startups with international investors – Carta handles international cap table nuances better while AngelList is more US-focused.
• Companies needing support for liquidity events – Carta enables some secondary sales to provide limited liquidity for shareholders.
• Startups that have completed fundraising – Carta has ongoing value after capital raising for equity management. AngelList has less utility after funding is secured.

Integrations And Workflow

• AngelList integrates tightly with LinkedIn for founder and investor profiles. Carta relies only on internal profiles.
• Carta can produce legal documents and filings related to cap table changes. AngelList does not provide document services.
• Carta cap table data can flow directly into 409a valuations. AngelList does not link valuations together with cap table details.
• For round closings, Carta can automatically update the cap table while AngelList requires manual cap table entry.
• AngelList syncs with Stripe for fundraising payments and fees. Carta has no native payments integration.

Pricing And Cost Considerations

AngelList is 100% free for startups, with costs paid by investors. Carta charges a monthly subscription fee:

Plan	Price
Carta Starter	$300/month
Carta Standard	$600/month
Carta Premier	$2,400/month

Carta also charges additional fees for generating legal documents related to the cap table.

For cash strapped early stage startups, AngelList provides more affordable fundraising support. Once past seed stage, Carta’s cap table management capabilities merit the subscription cost.

FAQs

Also Read: Comparison Between Ramp And Expensify.

Which Is Better – Angellist Or Carta?

There is no definitively “better” platform between AngelList and Carta. The optimal solution depends on the startup’s stage and needs:

• Early stage companies are better served by AngelList for investor introductions.
• Once managing multiple investors and equity, Carta becomes advantageous.
• The two solutions can be used in conjunction for both fundraising and cap table management.

Startups should evaluate whether they need fundraising support or more advanced equity management capabilities when deciding between AngelList Vs. Carta. Opting for both platforms is also viable depending on budget.