Carta, a well-known Silicon Valley company, is facing accusations of breaching trust and soliciting sales without consent from one of its prominent customers. The Finnish CEO of Linear, a project management software company, posted on LinkedIn about an incident where a Carta representative reached out to an angel investor in Linear without his knowledge or consent. The representative mentioned a firm buy order for Linear shares from a undisclosed buyer at a specific price. The investor, who happened to be a family member of the CEO, immediately alerted him to the email.
Feeling betrayed, the CEO expressed his disappointment on LinkedIn, stating that Carta, which he trusted to manage their cap table, was now involved in cold outreach to their angel investors without their consent or knowledge. He further revealed that several other investors and companies had also experienced similar incidents, where Carta employees solicited them to sell their shares without their approval.
The CEO’s post received significant attention, with thousands of likes and hundreds of comments. Carta’s founder, Henry Ward, later apologized and claimed that the incident was a violation of their internal procedures by an employee. Ward assured that they were investigating the matter and urged anyone with information to contact him directly. However, Ward has not responded to further inquiries from TechCrunch.
Other startup founders, who are also customers of Carta, expressed their concerns and indicated that they might consider switching platforms due to the recent revelations. However, one of Carta’s board members clarified that the cap table business and the CartaX business, which handles private stock liquidity, are separate entities with different teams. The breach of protocol occurred from an employee on the CartaX team and has been dealt with.
Carta has been no stranger to bad publicity, including lawsuits and accusations of poor customer service. The company has faced legal battles and allegations of gender discrimination, retaliation, and wrongful termination. Numerous customers have also expressed dissatisfaction with their experiences with Carta’s representatives, highlighting issues with account management and continuity. These latest accusations regarding soliciting sales without consent only add to the company’s already troubled reputation.
Despite the apologies and explanations from Carta, the Finnish CEO of Linear has lost trust in the company and has decided to move on to another service. Others in the startup community are closely following the conversation and contemplating their next steps as well. The incident has raised questions about Carta’s practices and has shed light on potential breaches of privacy and unauthorized sales.
Overall, Carta must address these issues promptly and take appropriate action to regain the trust of its customers. The startup community is closely watching how the company handles this situation and whether it can rectify its tarnished reputation in the industry.
