The state of transparency and inclusion in private markets, in 4 charts
- If Musk privatizing Twitter and Kim Kardashian setting up a private equity firm are indications of things to come, then transparency and inclusion in private markets should be in the spotlight.
- We look at Carta's Annual Equity Report 2022, which gives a demographic analysis of ownership in US private markets. Here are our takeaways, in four charts.

"Buy when there’s blood in the streets,” said Baron Rothschild, more than a century ago. While that remains one of the best investment strategies, it overlooks two major problems.
The first is that Rothschild said it in the 18th century, when women were not part of the workforce, and people of color had no civil rights.
The second problem is that the statement assumes everyone has the money to buy, or has other assets to collateralize in exchange for a loan or line of credit. However, excluding trust fund babies, that is not the case for many people.
For many, moving up in the world means working a nine-to-five, building a business, and accumulating appreciating assets. It remains the safest bet and has the longest proven track record for escaping poverty, given that the ownership of assets is the true basis of wealth creation.
As we fumble towards (hopefully) a more equitable society, alternative ways of creating wealth for the collective are emerging. And as one of the leading industries, the tech sector is put on the frontlines of bridging the gender gap and achieving racial equity.
In recent years, the Silicon Valley startup culture has been a major source of generating enormous wealth. In fact, despite the pandemic and culture wars, the number of millionaires continued to increase faster in the US than in other countries.
Silicon Valley has printed more millionaires than any other place in the world. Besides the founders, employees who joined companies early were privy to stock options. For the first time, a little more than 5% of the US population is worth at least $1 million.
Though not a reflection of the public stock market, private equity holds massive opportunities and is expected to grow to $12.5 trillion in 2025 from $7.2 trillion in 2020. If Elon Musk turning Twitter into a private company and Kim Kardashian setting up private equity firm SKKY Partners are indications of things to come, then transparency and inclusion in private markets should be in the spotlight.
We looked at Carta's Annual Equity Report 2022, which gives a demographic analysis of ownership in US private markets. Here are our takeaways, in four charts.
While California gave the most equity and paid the highest salaries, there is a massive gap in initial private equity grants issued across different metropolitan areas in America.
- San Jose, the largest metro in Silicon Valley in California, gave employees an average initial equity grant with a value of 0.14x their annual salary. The average salary last year was $150,000.
- Meanwhile, Atlanta, Georgia only gave employees an average initial equity grant of 0.06x their annual salary. The average salary was $100,000.
- San Jose employees also gained the most profits, with 68% exercising their in-the-money options before the expiry dates. San Francisco and Boston came next, followed by New York, Los Angeles, and Seattle.
- Chicago employees gained the least, with only 39% exercising some or all of their in-the-money options before they expired.
Compared to their representation in the US labor population, the report found that Latine and Black employees received the lowest value in equity grants.
- Black and Hispanic & Latine people make up 30% of the US labor force, yet only 16% of equity-receiving employees in 2022 were Black or Latine.
- White people make up 61% of the labor force, and 60% of employees receiving equity grants were white.
- East Asian and Southeast Asian employees make up 4% of the workforce and 12% of those granted equity in 2022.
- South Asian men received the highest median value of equity grants, while Black women received the lowest median value of grants.
Looking deeper into the gender dynamics, women received less private equity than men across the board. In addition, a pattern dubbed the Fatherhood Premium emerged – where employees who are fathers receive more advantageous packages than their childless counterparts.
- Women are 47% of the US labor force, yet they comprised 36% of equity-receiving employees in 2022.
- Women only received 28% of the notional value of initial equity grants.
- Only 27% of executive hires are women.
- Though still below 47%, companies in the New York metro had the highest rate of women employees at 41%.
Looking at job areas where employees gained the most in employee ownership plans, finance departments made the most gains, while admin departments lagged.
Employees in administrative and customer support exercised less than 40% of their options, highlighting compensation differences in job areas.
Another highlight was that men and women worked in different job areas. For instance, 14% of female executives work in human resources, compared to 2% of male executives. In contrast, 22% of men work in engineering, compared to only 5% of women.
The report was by no means exhaustive. It pooled from data that the Carta platform has access to – an impressive 1.5 million employees, 67,000 founders, and 2,400 LLCs. It included nonbinary people, which made up 1% of all participants. However, it did not capture the mass exodus among women who have left the workforce due to the pandemic.