Carta Scandal Deepens: Former Customer Accuses Company of Misusing Cap Table Data
Carta, a popular financial platform for startups, is embroiled in another controversy after one of its former customers accused the company of misusing their cap table data. The incident has sparked concerns among other customers and raised questions about Carta’s business practices.
What Happened?
In an interview with TechCrunch, Matt Murphy, a venture capitalist at Menlo Ventures and a board member at Carta, acknowledged that there was a breach of protocol within the company’s private stock liquidity team. However, he emphasized that the cap table data is separate from the CartaX business unit responsible for private stock sales.
Carta’s Response
When asked about the situation with Linear, Murphy echoed what Carta CEO, Rick Hubbard (previously mentioned in the text as Ward), told Saarinen on LinkedIn: "Carta does not use customer cap table data. The cap table business and the CartaX business units are separate, with separate teams and leadership."
However, this response seems to contradict the experience of Saarinen’s company, Linear. According to Saarinen, Carta did take buy orders from his investors without their approval.
The Fallout
Carta has been facing criticism for its handling of cap table data and private stock sales. The controversy comes on the heels of a string of negative press surrounding the company, including lawsuits over gender discrimination, wrongful termination, and violating California’s Equal Pay Act.
Reactions from Other Customers
Some customers are now reevaluating their relationship with Carta, citing concerns about the company’s business practices. "I am a customer of Carta," said one founder in an interview with TechCrunch. "If I learned they were peddling shares in my company without my knowledge, I would be furious. I’m definitely considering switching platforms."
Carta’s Attempt to Regain Legitimacy
In October, Carta’s CEO emailed customers, telling them that if they are concerned about the negative press surrounding the company, they should read a Medium post from Hubbard. However, this move only drew more attention to the problems plaguing the company.
Conclusion
The incident highlights concerns over Carta’s handling of cap table data and private stock sales. As customers continue to scrutinize the company’s practices, it remains to be seen whether Carta can regain its legitimacy in the market.
Sources:
- TechCrunch: "Carta sued by former CTO"
- The New York Times: "Carta accused of gender discrimination and retaliation"
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