Carta vs Forge for a Custom Software Shop's Equity Pool

Carta runs the tender inside your existing cap table software: eligible holders see their vested shares, elect how much to sell, and a broker-dealer handles compliance and settlement without the transaction ever leaving the platform. Forge instead brings an outside marketplace of buyers who can absorb a large block that your own balance sheet cannot, in exchange for the company opening its books to institutional diligence.

When a handful of senior engineers hold most of the non-founder equity, a small, internally funded buyback through Carta is often enough to solve the actual problem: giving two or three key people enough liquidity to stay rather than take a competing offer. The transaction stays confidential, which matters when client contracts and margins are the kind of detail you would rather a competitor not see in a data room.

If a private equity sponsor already sits on your cap table and wants to bring in additional institutional capital to buy out a founder's larger stake, Forge's buyer network and secondary price discovery tools are built for exactly that kind of transaction. It works less well for a small, employee-only tender where the whole point is to avoid outside diligence.

Because a services business's margins depend heavily on utilization rather than a recurring ARR line, treat a self-funded buyback the same way you would treat any other large discretionary spend: model it against a burn multiple you would actually defend to the board, not one borrowed from a SaaS benchmark that does not describe your business¹. Say a firm with a dozen senior architects wants to offer each one a modest cash-out; price that against the utilization hit of pulling those same architects into diligence calls for weeks.

If the transaction is small, internally funded and about retaining two or three specific people, use Carta. If it involves a private equity sponsor sourcing outside capital to buy a meaningful stake, use Forge. Bring your AI CFO into the modeling early so the utilization tradeoff sits next to the cash-flow tradeoff on the same page before you commit to either path.

Rules of thumb for choosing between the two:

• Use Carta when the transaction is small, internally funded, and aimed at retaining two or three specific senior people.
• Use Forge when a private equity sponsor is sourcing outside capital to buy a meaningful stake.
• Have counsel confirm which client agreements restrict sharing margin or rate detail before opening any outside diligence.
• Model a self-funded buyback against a burn multiple you would defend to the board, not a SaaS benchmark.
• Schedule the program outside major client rollouts so the senior architects you want to retain have time for it.

Plenty of custom software shops never take outside capital at all, and the whole liquidity question shows up differently: two co-founders who bootstrapped the business for a decade, one of whom wants to step back while the other keeps running it. That is usually a private buyout negotiated directly between the founders, priced off a business valuation rather than a venture-style 409A, with neither Carta nor Forge doing much work beyond documenting the share transfer once terms are agreed. Bringing in either platform mostly makes sense once the company has enough non-founder equity holders that a structured, documented process beats a handshake deal.

Client contracts in this business often carry confidentiality clauses that extend to margin and rate information, not just the client's own data, and an institutional buyer's diligence request can bump directly into those clauses. Before opening a Forge-sourced process, have counsel confirm which client agreements would need consent or redaction to share financial detail with an outside buyer, since discovering that mid-diligence is a common source of delay. A Carta-run internal program sidesteps this almost entirely, since the disclosure packet stays inside the existing shareholder group and never needs to satisfy an outside institution's diligence checklist.

Pick a quiet stretch on the delivery calendar to run the program, not the middle of a major client rollout, since the senior architects you most want to retain are also the ones whose time diligence calls and election-window questions will eat into. Say a firm is mid-way through a nine-month platform migration for its largest client; opening the tender the same month means the people who should be focused on that delivery are instead fielding tax questions from teammates. Shifting the window by even six to eight weeks to land between engagements costs nothing and avoids that tradeoff entirely.

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