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London Tech Week

Former Carta investor team launches Passthrough, raises $5M to simplify fund closing process


Passthrough, a New York-based platform that manages subscription document distribution, execution, and compliance, announced that it has secured $5M led by Positive Sum. Other investors, including Okta Ventures, Great Oaks VC, and Company Ventures, participated. 

Additional strategic angel investors and operators also participated in the round, including Samir Kaji (Founder and CEO of Allocate); Bob Moore (CEO of Crossbeam); Josh Smith (co-founder and former CEO of Solovis, a leading institutional investment portfolio management system);

Marshall Boyd (Co-President/Chief Investment Officer at Interstate Equities Corp.); Andrea Walne (General Partner at Manhattan Venture Partners); Daniel McAuley (Data Science at Instagram); Winter Mead (CEO and Managing Member at Coolwater Capital); and Deanna Fong(Program Manager at Meta and Former Head of Compliance at Carta).

How will the funding be used?

Passthrough will use the funding to hire multiple new team members across offices in New York, Philadelphia, and remote. We at Tech Funding News had a conversation with Tim Flannery, co-founder, about Passthrough’s expansion, initial challenges, business model, and more. 

Talking about the expansion, Flannery says, “Our team’s expansion will be critical in supporting the product’s rapid growth and improving the investor’s data interoperability so investors can utilise their investor identity to its full potential.”

How did it all start?

Passthrough was founded by former leaders from the Carta Investors Services team Alex Laplante, Ben Doran, and Tim Flannery. 

Sharing his experience, Flannery says, “We helped scale Carta’s Investor Services and fund administration business from nothing to the behemoth it is today. It’s also where we met this particularly annoying problem: the subscription document (or sub doc). If you’ve ever seen a sub-doc, I don’t need to convince you why they’re terrible. Signing up for Robinhood takes a couple of minutes. Investing into a private fund takes far longer.”

According to Flannery, investors need to spend hours filling out non-standard legal agreements with 100-200 questions where not every question applies to them. Also, fund managers will have a hard time coordinating their investors, law firms, fund administrators, and more once they send out sub docs. 

Further, anyone who needs data from the sub doc has to manually transcribe information from executed PDFs into their destination of choice. Here’s where Passthrough comes into play.

How do Passthrough works?

The US company enables fund managers to collaborate with their advisors and service providers in closing funds across private equity, real estate, venture capital, and other private investment vehicles. 

With the ability to turn any subscription agreement into conditional logic, investors only answer questions relevant to them while fund managers coordinate fund administrators, law firms, and other third parties with ease. 

He continues, “When an investor completes a sub doc on Passthrough, they’re passively providing us with their identity. Passthrough’s goal is to give them control of it and allow it to be interoperable across future sub docs and anywhere else that it needs to be applied. Though we have more work to do, a version of that investor profile is live.” By creating a data passport for investors that have used Passthrough, fund managers speed through the fundraising process on subsequent funds.


In terms of challenges, Flannery says, “Every time we help a fund manager execute their raise, we get to meet their investors by helping them complete subscription agreements. Those investors might be investors in other funds or fund managers or investor relations professionals themselves.” 

“Those good experiences result in referrals which results in more business and that demand was tough to satisfy. It’s difficult to balance capacity with increasing customer demand. We found leverage through the product team, but it’s still a tricky challenge today,” he says. 

Target audience

The platform is targeted towards fund managers and investors. Flannery says, “Incorrect documents and coordination challenges keep fund managers from deploying capital. Without Passthrough, on an average, only 20% of subscription documents are filled out correctly, and the process takes hours at best or weeks at worst.”

However, 80% of investors on Passthrough require zero revisions and our world record for fastest sub doc completion is 6 minutes. “The net result is that funds are raising more dollars because they can handle a greater volume of investors, but also that they’re doing it quicker by weeks or months,” notes Flannery.

Business model

Explaining the business model, Flannery states, “We take any sub doc and create a custom workflow that looks a lot like TurboTax. Investors only see one question at a time and only the questions that matter to them. Fund managers can track the raise live and nudge someone along towards the close. Because the data’s structured, fund managers, law firms, and fund administrators can export the data into whatever format they need.” 

He continues, “Depending on the size and complexity of the investment firm, Passthrough’s fees can range from the low thousands for emerging managers in the venture to hundreds of thousands of dollars for multi-strategy asset managers.”


Founded in 2020, Positive Sum is an early-stage venture capital firm based in Stamford, Connecticut. “When we met Passthrough, their vision for APIs that make investing processes seamless set them apart,” says Patrick O’Shaughnessy, Partner at Positive Sum. 

“The subscription agreement product the team built demonstrated the first step towards the kind of infrastructure the investing world needs, and customers truly loved working with them,” says O’Shaughnessy.

“I believe Passthrough can be the dominant leader in fund workflow automation.”

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