Why Is Pulley Going Out of Business?
Author: Redwood Valuation Content Team
Published: September 18, 2026
Pulley is shutting down on December 8 and handing its customers to Carta. The easy explanation is that Carta simply won. The more useful explanation, if your company relies on a cap table platform, is that Pulley got caught between a brutal macro environment and bad unit economics. Understanding both helps explain what is coming next and why it matters for your 409A valuation.
The Macro: Capital Left the Building
There is a capital drought for exactly the kind of company Pulley is. AI is absorbing the venture market. By some estimates, roughly 86 cents of every US venture dollar in the first half of 2026 went to AI. That leaves everything else, including B2B SaaS, competing for a shrinking remainder.
The capital drought creates a double whammy for a company like Pulley. Less investment capital is available, and fewer newly funded startups are entering the market as future customers for a cap table platform. Pulley has to raise in a harder market just as its customer pipeline is thinning. That combination is very hard to grow through.
The Micro: The Math Never Worked
Pulley also had a company-specific problem: it was going head to head with a dominant incumbent. Pulling customers away from the default choice requires heavy spending. When acquisition costs stay high and a competitor can match on price and features, customer lifetime value is constrained and the unit economics stop working. Pulley reportedly raised more than $50 million over seven years and still could not make the model work against Carta. That is not a failure of effort. It is what happens when acquisition costs outrun customer value in a consolidating market.
What Consolidation Usually Does Next: Prices Go Up
For current customers, the more immediate question is what happens to pricing next. When a market consolidates toward a single dominant player, pricing power concentrates with that player. Carta has raised prices before, and there is little in this dynamic to stop it from doing so again. With Pulley gone, one of the last credible alternatives is off the board.
Some customers report the same pattern in adjacent products. In fund administration, for example, they say Carta's pricing is moving toward that of established, specialized fund admins. That undercuts the original pitch that the bundled platform would be the cheaper option. If you are counting on today's pricing to hold, consolidation is a reason for caution, not comfort.
Why This Matters If You Have a 409A Valuation
All of this creates an operational headache for managing your cap table and a separate risk for your 409A valuation. When one of these platforms collapses or hands you off, your cap table data moves, but the valuation opinion behind your option grants does not travel with it. A 409A valuation is an independent appraisal that has to be defended if it is ever questioned in an audit, in diligence, or by the IRS. The firm that issued that valuation through Pulley will not be there to defend it. Migrating your cap table to Carta does not make Carta responsible for a valuation Pulley produced.
So the same consolidation that pushes your software costs up can also leave you exposed when the valuation already on your books is scrutinized later.
How Redwood Can Help
Redwood is an independent valuation firm. Our work is designed to stand up in audit and diligence. If you are coming off Pulley, we can take over the valuation relationship and include audit support for your prior year's valuation as part of the package. That way, the 409A already on your books is covered rather than orphaned.
You do not have to accept the default path just because it landed in your inbox. If you want a valuation partner whose incentives are not tied to a consolidating software platform, talk to Redwood before December 8.