On Fintech today, we are please to speak to Carine, President of AST Private Company Solutions. AST is a leading provider of ownership data management, analytics and advisory services to public and private companies as well as mutual funds. AST’s comprehensive product set includes transfer agency services, employee stock plan administration services, proxy solicitation and advisory services and bankruptcy claims administration services.
Who are you and what’s your background?
I started my career in the financial services and technology industries at Oracle. I was with Oracle when they went public. Later, I was a partner at PwC. I founded my own company and raised the investment money. I became CEO of a software company, which led me to become president of Nasdaq Private Market (NPM), eventually I started working with privately held companies. Now, I work exclusively with private companies and help entrepreneurs, founders and investors manage their ownership and prepare for exit. I studied psychology and sociology in college, I have always been interested in what motivates people and specifically how money motivates people. I’ve observed in my time working in the private world, most people’s focus is on obtaining life-changing wealth and hoping to win the lottery by starting a company that will make billions of dollars. There is synchronicity in how you motivate employees and how you inspire people to start their own company. Today, I am focused on making sure that once you start your own company, you keep track of what you own.
What is your job title and what are your general responsibilities?
I’m president of AST Private Companies Solutions, which produces a SaaS software package called Astrella. Worldwide, Astrella helps companies manage their ownership. It’s designed specifically for private companies. My general responsibilities are to manage the business unit, coordinating with our parent company AST as well as working directly with our Astrella clients and our partners. I also get the word out about Astrella, how it can help individuals and why it’s important for all businesses. A fun part of my job is working one-on-one with founders as they grow their businesses.
Can you give us an overview of your business?
Astrella is an intuitive online solution that you can use anywhere. It’s specifically designed for private companies worldwide, either LLC’s or C-corps. It helps manage the current owners of a company, which is called a capitalization table or a “cap table.” It also allows a company to manage any stock or cash-based awards that might be granted to your employees. Sometimes those are stock options, Restricted Stock Units (RSUs) or other awards that you may grant today with a vesting schedule. So, at a date in the future, they’ll be able to take advantage of the appreciation in the company value.
Astrella also allows for the modeling of a potential exit or investment into your company. This tool helps you understand what happens if you were to sell your company, go public or take on additional investors and how that would impact the shareholders who currently own shares in your company or have an award.
Finally, it communicates to the investors and the employees exactly what they own or have been granted. What are their holdings in the company? What is the value of those holdings? What documents did they sign? It also gives them an opportunity to do some modeling if the company were to sell at a certain share price and what that mean for them individually. It’s an important tracking, communication and motivational tool.
Tell us how you are funded.
We are owned by AST, one of the largest public company ownership management and transfer agent firms in North America. We’re very lucky that we haven’t had to bootstrap, and we aren’t dependent upon external investors for our growth. Therefore, we can focus 100 percent of our time on developing our products and serving our clients. It also means that when companies go public, our parent company can continue to support the client through the next stage of the company.
Why did you start the company? To solve what problems?
I think it’s really important for people to understand when they start their own companies, what they own and what will happen if they accept investments from professional investors like venture capital, private equity, angel investors or even incubators. It’s imperative to know what that means for the ownership you believe you have in your company. I talk about the modeling so much because it’s important to look at that before you make important, sometimes life-altering decisions in terms of your potential wealth. Employees should understand what they have been granted because many of them have taken a lower salary in order to join your company and they understand their stake in the company and future growth potential.
Who are your target customers? What’s your revenue model?
We support private companies anywhere the world, regardless of size and in a few different formats. We can support both venture backed, as well as private equity owned companies. You can be either a C Corp for U.S. purposes or an LLC. It doesn’t matter for us, we work with new, very small companies. We go up decacorn (a company valued over $10 billion) companies that are ready to go public and worth billions of dollars.
If you’re a small company and you have less than 10 stakeholders in your company (a stakeholder is an employee or a shareholder), Astrella is available for free. We want to encourage you to use Astrella from the day you start your company. Enter the ownership right away, so that as you grow your ownership information is correct. Once you exceed your eleventh stakeholder, there is a monthly charge dependent upon the advanced features you need. If you are a larger company, you’re probably going to need our more sophisticated modeling and financial reporting features; obviously the pricing is different. For larger companies, we charge on an annual basis.
We recently managed a very large decacorn, we helped them ensure that they had all the data needed to go public and their records were correct. Upon IPO, they had to implement a complicated stock split and offer a secondary sale to 500+ shareholders. With Astrella, this was done quickly and accurately before we transferred the records to the AST Transfer Agent group, who supported the company post-IPO.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
I would like to make it easier for people to participate in the private market. So, investors can easily understand the opportunities and risks before they invest. I would like to see investment funds that allow people to diversify and put some of their retirement savings into private market company funds without the need to be accredited investors and invest in specific companies. I would also like to see those companies who provide buy and sell opportunities for people to invest in private companies, make it easier for individuals to participate. For example, lowering the minimums required to allow retail investors to participate. You wouldn’t need to be a venture capitalist, know the right people or live in the right place to invest in the private market.
What is your message for the larger players in the Finance industry?
Most CEOs of large global banks understand that the private market is here to stay. They are all trying to understand their strategy in terms of supporting their current clients in this asset class. I want to encourage banks to continue to devote resources and attention to supporting not only the asset classes that are in the public sector, but also those that are in the private sector. They have the financial fortitude to be able to create solutions, like mutual funds or other types of instruments, that allow their clients to participate in private company investments.
What phone are you carrying and why? And what are your go-to ‘fintech’ mobile apps?
I have two Apple iPhones, one professional and one personal. I use many fintech mobile apps, like my banking app, my credit card app and my investment firm apps. I don’t think I have a favorite, but I like to go in and see what my investments are worth. Some of the brokerage firms have great apps and others still need to do some work to make it easier to use! I also like the ones that the 401k or the IRA providers supply. They allow me to very quick check-in to see how things are going with my investments.
Where do you get your industry news from?
I generally start at a macro level with CNN or the Wall St. Journal, then move locally to SFGate.com and Business Insider. At some point during the day, I look at Crunchbase, PitchBook News and Venture Capital Journal Daily. I read many industry newsletters and links my colleagues send me.
Can you list 3 people you rate from the FinTech sector that we should be following on Twitter?
What’s the best FinTech product or service you’ve seen recently?
I am biased, but I truly believe Astrella is the best new fintech product. The work we are doing is changing the private market.
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
Money movement is a big focus these days. At Astrella, we are the only provider of stock option exercising that allows you to do “real time” private company exercises of stock options that deposit funds automatically into the employers’ bank account. Our competitors still use ACH or accept paper checks and co-mingle employees’ funds, which we believe is an archaic way of supporting the exercise of stock options.
Blockchain is going to become more accepted and use cases will become more prevalent. It’s not only for managing cryptocurrency. People are going to understand the power and why blockchain is so important to manage records in the fintech industry.
Finally, I think we will see regulatory changes in the banking sector that are going to make it much easier for people to move money and to make purchases, including securities, with a simple touch of an app. We’ve seen that with the advancement of firms like Robinhood, E-Trade and others, that will continue to grow and it’s going to be easier and cheaper to invest in the future.