Pulley vs. Carta for Contractors Weighing an Equity Transfer

Any change in ownership, even a minority transfer to a longtime executive, is worth a conversation with your surety before it happens, not after. Sureties often have personal indemnity agreements tied to specific named owners, and adding or removing someone from the cap table can change what the surety is actually willing to underwrite.

This conversation costs nothing and takes far less time than discovering, mid-project, that your bonding capacity has quietly shrunk because an indemnitor's ownership stake changed without anyone flagging it.

A contractor mid-bid on a large project is the worst time to find this out. If a transfer is planned, time it around your bonding review cycle rather than your own convenience, and ask the surety directly whether the change affects your program before signing anything that updates the cap table.

For a contracting business with one operating entity and a small ownership group, Pulley can handle the cap table, and it offers 409A valuations if you are issuing options rather than direct stock.

It is a reasonable long-term fit for a contractor that does not expect to raise outside capital or restructure into multiple bonded entities, which describes a large share of privately held general contractors.

Carta earns its place once a contracting group operates multiple bonded entities, such as separate companies for different geographies or trade specialties, and needs one consolidated view of ownership across all of them for a lender, a surety, or eventual succession planning.

It also fits a contractor preparing an ownership transition where a departing founder wants to sell part of a vested stake over time rather than all at once, since that kind of structured buyout benefits from the deeper reporting a lean cap table tool does not provide.

A contractor running three separate bonded entities across three regions, for instance, gains more from Carta's ability to show a surety or lender one consolidated ownership picture than from any single entity's cap table being individually accurate but disconnected from the other two.

If a project executive is buying in with cash they do not have on hand, a financed buy-in, paid down over several years from distributions, is common in this industry. Structure it so the surety sees a clear path to the executive holding real, unencumbered equity, not an open-ended loan that leaves ownership ambiguous.

Document the buy-in terms the same way you would document any grant: amount, timeline, and what happens if the executive leaves before the buy-in completes. A surety reviewing your ownership structure will ask exactly these questions.

Say an executive agrees to buy in over five years, funded by their share of distributions rather than outside cash. Until the buy-in completes, the agreement should be explicit about whether they hold full voting shares from day one or a smaller interest that grows as each payment clears. Either approach can work, but only one of them should be true on paper, and it should match what the surety was told.

Confirm your surety agreement and indemnity terms before any transfer. Confirm whether the incoming or outgoing owner is a named indemnitor and what removing or adding them requires. Confirm the transfer does not change your work-in-progress reporting in a way that raises questions during your next bonding review.

Only after those three are settled does it make sense to update the cap table itself. Sequencing it this way keeps the software step from becoming the thing that triggers a bonding problem nobody saw coming.

Put the same checklist in front of every future transfer, not just the first one you happen to plan carefully. Contractors that get this right once and then skip the process on the next transfer, assuming the surety relationship is now settled, are the ones most likely to be caught off guard by a bonding review a year or two later.

Work through the transfer in this order:

1. Review your surety agreement and indemnity terms before any transfer is discussed with the incoming or outgoing owner.
2. Confirm whether either owner is a named indemnitor and what adding or removing that person requires.
3. Check that the transfer does not change your work-in-progress reporting in a way that raises questions at the next bonding review.
4. Structure any financed buy-in so the surety sees a clear path to the executive holding real, unencumbered equity.
5. Update the cap table in Pulley or Carta only once the surety questions are settled.