Masters in Business

Carta CEO Henry Ward on Private Credit & Private Markets

October 17, 2025

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  • Carta's initial success stemmed from solving the immediate, unglamorous problem of cap table management, which served as a wedge to build a broader platform, rather than pursuing the initially envisioned, larger market of a private stock exchange. 
  • Henry Ward's entrepreneurial philosophy is characterized by a 'heat-seeking missile' approach, prioritizing the pursuit of any solvable problem to keep the business moving forward, which contrasts with founders who fall in love with a specific problem. 
  • The growth of private markets is structurally outpacing public markets, leading Henry Ward to lobby Congress for creating safe access for retail investors into private capital rather than trying to force more companies to go public. 

Segments

Henry Ward’s Background
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(00:03:10)
  • Key Takeaway: Henry Ward’s undergraduate degree at the University of Michigan was a Bachelor’s of General Studies due to failing foreign language requirements multiple times.
  • Summary: Ward initially planned to be a math major but switched to General Studies to graduate, having failed Japanese three times and Spanish twice. He served as an enlisted man in the Marines after high school before attending college. His first post-graduate job was at Trilogy in Austin, Texas, which he considered a formative experience.
Entrepreneurial Philosophy
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(00:08:23)
  • Key Takeaway: Ward fell in love with the act of building a startup itself, viewing the problem as merely the vehicle, which leads Carta to pursue many diverse problems simultaneously.
  • Summary: Carta’s development was driven by Ward’s love for entrepreneurship, not a specific problem, leading to a ‘heat-seeking missile’ strategy of attacking many targets. This results in a large number of SKUs and business lines for a company of Carta’s size. Founders must determine if they are in love with the problem or the act of founding.
Carta’s Origin Story
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(00:09:37)
  • Key Takeaway: The initial concept for Carta was ‘PayPal for equity’ to email stock certificates, but product-market fit was found by digitizing the cap table into a single table view.
  • Summary: The cap table problem was brought to Ward by Manu Kumar of K9 Ventures after Ward’s previous company failed. The first version focused on replacing physical stock certificate mailing costs, but companies responded better to having all issuance data consolidated in one table. This core system of record then enabled expansion into services like 409A valuations and equity accounting.
Scaling and Data Management
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(00:11:46)
  • Key Takeaway: The core of scaling a company, regardless of size, remains the simple, repetitive process of talking to customers, solving their problems, and building the product.
  • Summary: Public market data is ubiquitous, but private market data is difficult to access centrally because it is inherently private. Carta cannot monetize its vast private market data because customers pay for confidentiality and workflow software, not data products. The hardest initial challenge was convincing the venture ecosystem to accept the ‘dematerialization’ of paper equity into the cloud.
Business Model Evolution
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(00:24:06)
  • Key Takeaway: Carta successfully transitioned from a volatile, transactional fee-per-certificate model to a stable, subscription-based model by transparently admitting the initial pricing was a mistake.
  • Summary: The initial transactional model competed against FedEx fees, but it was difficult to manage and incompatible with bundling other subscription services like 409A valuations. Ward emailed all 2,000 customers explaining the necessary shift to an annual subscription, losing almost no customers in the process. This shift reflects the market’s growing acceptance of paying subscription fees for legal and financial software.
Market Positioning and Rebranding
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(00:27:13)
  • Key Takeaway: Carta evolved from being perceived as legal software to a fintech solution, and now positions itself primarily as a software infrastructure business similar to NetSuite.
  • Summary: The company rebranded from eShares to Carta in 2017 because the original name was held by a domain squatter demanding an exorbitant price. Carta’s expansion into adjacent markets like 409A valuations and fund accounting is driven by having a unique competitive edge derived from owning the core cap table data.
Private Market Growth and Access
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(00:38:12)
  • Key Takeaway: The U.S. economy is seeing most new job growth in the private sector, necessitating solutions for retail access to private capital since the number of public companies is shrinking.
  • Summary: Public markets are a shrinking industry, with fewer public companies today than a decade ago, while private company growth is astronomical. Legislators often incorrectly try to push companies to go public to maintain retail access to growth equity. The correct solution is creating safe access for everyday Americans into private capital markets.
Private Market Liquidity Challenges
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(00:42:00)
  • Key Takeaway: Venture startup liquidity, particularly via secondary exchanges, is unlikely to materialize at scale because private market infrastructure fundamentally differs from public markets.
  • Summary: Private markets are the inverse of public markets: price is set by the first buyer, and selling large blocks is easier than selling single shares. Private market outcomes follow a power law distribution, rendering modern portfolio finance theory inapplicable. Liquidity does not beget liquidity in private markets; attempts to scale secondary providers often devolve back into niche businesses.
Wealth Management for Illiquid Holders
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(00:51:27)
  • Key Takeaway: A new financial advisory industry is needed to manage wealth for employees holding significant, illiquid private equity, as traditional wealth management models cannot monetize these assets.
  • Summary: Employees often prefer cash over illiquid equity because they don’t understand the asset or when it will become liquid, especially when needing cash for immediate needs like rent. Carta partnered with Morgan Stanley to address this gap, aiming to create a service that helps high-net-worth but asset-illiquid individuals manage their situation.
Career Advice: Mountain Jumping
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(00:57:46)
  • Key Takeaway: Young professionals should ‘jump mountains’ early in their careers to test different fields and ensure they are climbing toward a global maximum opportunity, not just a local peak.
  • Summary: Many unhappy professionals realize too late they reached the top of the wrong career mountain by following a predetermined track. Early career jumping helps identify the optimal path before becoming entrenched in a local maximum. Smart, hard work is merely table stakes; success in entrepreneurship also requires significant luck.