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Fractional Vesting

Diego Azevedo
  • Updated

When using phantom shares, companies can opt for a vesting schedule with fractional numbers. 

You are able to issue equity with fractional vesting utilising our Phantom (Virtual) Shares feature in Carta. 

Using phantom shares, you can either issue a grant whose quantity is a whole number or grants whose quantities are numbers with decimals. Carta will support grants with up to three decimals.

fractional 3.png

 

Whether you issue a grant that is an whole number or a grant whose number has decimals, you can always reflect the vesting schedule with decimals if you wish to. You can build a custom vesting schedule and create tranches with fractional numbers.

fractional 2.png

 

Phantom shares will count as the fully diluted in the cap table, so if you navigate to Ownership > Cap Table, you will be able to see them reflected in the fully diluted number. 

Also it is important to note that phantom shares cannot be exercised. They have their payout realised in an exit event. 

fractional 6.png

 

There are some limitations when working with phantom shares, these include:

  • Phantom Shares are not accounted for when generating the SBP report.
  • When it comes to the round modelling report, the spreadsheet will automatically show the rounded values. 

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