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Endowus and Carta enter partnership to empower employees with equity ownership and provide regular liquidity opportunities in Asia Pacific

Nov 2023

Asia’s leading digital wealth platform Endowus today announced that it is strengthening its existing relationship with the leading global equity management solution provider, Carta, by strategically partnering on new solutions. These new solutions will help solve a persistent pain point for employees of startups, with regards to the liquidity of their holdings in startup equity. 

The new collaboration seeks to enhance the shareholder experience of Endowus employees and other minority shareholders, and provide greater transparency directly on the Carta platform. The two companies are also discussing ways in which they can work together to potentially provide access to securities in fast growing private companies in the future, and on the Endowus wealth platform. 

Endowus has always approached its ownership structure from a first principles basis, creating a unique history and culture around equity ownership. Samuel Rhee and Gregory Van, its co-founders, had bootstrapped the business for the first four years. They opened up the ownership of the company to its early joiners to achieve broad ownership by employees. As a result, the majority of the company today is owned by a broad number of employees through direct investments into the cap table, or through the employee stock ownership program. 

Endowus employees are able to easily access and manage their ESOP shares on Carta's platform, with immediate visibility on the amount of shares they hold, and how much has vested. The platform also allows them to transparently view their exercisable and future options, the vesting schedule of these options, and will automatically trigger communications to employees when their shares vest and when they can choose to exercise their options.

As a private company, finding ways to provide liquidity to its employees through secondary transactions has been a priority at Endowus, and Carta’s equity management solutions have been used to effectively manage ownership for the company and for its employees. The latest solutions Carta has rolled out allows for the look through of securities held through special purpose vehicles (SPVs). This allows for companies to establish SPVs for cap table management purposes whilst maintaining transparency on the beneficial interests held through such vehicles. 

Endowus and Carta are now looking to take employee equity ownership to a new level of convenience by providing more regular secondary transactions that provide liquidity and access — two major problems associated with owning stocks in private securities. This allows for increased transparency, flexibility, and liquidity options to Endowus’ Employee Stock Ownership Plan (ESOP). 

Endowus’ use of ESOP as compensation plays a pivotal role in fostering employee ownership and talent retention. This approach ensures that every individual has a stake in the company's success, enhancing their dedication towards a common goal and instilling a sense of collective responsibility towards the firm’s success. Opting for stock-based compensation rather than cash compensation is intimately tied to employees’ conviction in Endowus’ winning fee-only business model, and the growth trajectory of the company.  

“Our partnership with Carta represents a significant step forward in our commitment to empowerment and financial flexibility for the Endowus team. We understand that an employee’s growth journey with us will evolve and priorities in life will change. With a thoughtfully designed, flexible, and transparent share ownership program, we hope to empower our employees to understand how stock-linked compensation can impact their long-term wealth goals, while simultaneously nurturing a collective sense of responsibility and ownership in the company’s future,” said Samuel Rhee, Co-founder & Chairman of Endowus. 

“In Asia Pacific, we have historically seen fewer IPOs which has led to employees questioning the value of ESOP. In turn, this has made it more difficult for local startup founders to attract top talent. Our work with Endowus is a significant step towards unlocking liquidity regionally and hopefully marks the start of a paradigm shift that can further benefit the local startup ecosystem. We commend Sam and the team at Endowus for leading by example and we’re thrilled to play our part in enabling this secondary transaction,” added Bhavik Vashi, APAC MD at Carta.

In addition, there is increasingly a lack of understanding of how to use ESOPs beyond the basics. A 2021 report revealed that less than 50% of startup founders in Southeast Asia understand ESOP topics such as buybacks, top-ups or stock exercise, and over half of companies still use Microsoft Excel to manage ESOPs. 

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