In an attempt at damage control, the CEO of the equity management startup Carta, Henry Ward, today emailed customers, telling them that if they are concerned about “negative press” tied to the outfit, they should read a Medium post of his.
The move appeared only to call more attention to the many reported problems plaguing the 11-year-old company.
Ironically, some of the customers say they hadn’t even seen the negative press until Ward called attention to it, according to posts on social platform X.
One X user wrote: “Cringe. They’re forgetting that it’s not a big deal unless you make it a big deal.” Another wrote: “This is literally the first ive heard about negative Carta press but Im definitely not going to just ‘ignore it’ now ha.” Still, one other user posted: “i feel like this is terrible comms work, dont draw unnecessary attention to it for the majority of ppl who prolly never saw anything anyways if it doesnt directly impact me i probably dont give af.”
Says one of the many investors in Carta, which was most recently assigned a post-money valuation of $7.4 billion in 2021, when it last raised an institutional round of funding: “That’s weird,” of Ward’s decision to reach out to customers about some of the negative coverage that has swirled around the company, including, most recently, in an October 24 piece published by Insider, and October 4 and October 16 pieces published by Fortune. “90% of your customers really don’t think about you everyday,” said the VC, who asked not to be named. “This might have been a bit of founder navel gazing, like, ‘Everybody must be thinking about me all the time,’ but most customers of any product, including Carta, have their own job to do. If your product is delivering value, they’re not going to think about it too much.”
In the Medium post, which Ward published five days ago, he outlines conversations he has had with Carta employees about a long spate of negative press, including, most recently, lawsuits around allegations of sexual abuse on the part of executives, a toxic “boy’s club culture,” and indecent exposure, among other things.
In his post, Ward suggests that he’s the target of ambitious reporters bent on building their careers by exposing companies for “bad behavior.” The post is a public service, in a sense, writes Ward. “I know other CEOs have to deal with this so I wanted to share what I shared with employees in case it’s helpful for other CEOs thinking through similar problems.”
He goes on to delve into the many accusations about the company, while also seemingly confirming them. He says, for example, that Carta has “extensive documentation” that former CTO Jerry Talton “was inappropriate with women and abused his position.” Ward adds: “It also turns out, we discovered after he left, that he is a misogynist and a racist.” Ward also reports having extensive documentation that [former Chief Product Officer] Heidi Johnson “was a bully, had the lowest manager approval rating, and misused corporate finances for personal use.”
He adds in the post: “We fired both of them. That’s what the press gets wrong. Our mistake wasn’t firing them. Our mistake was hiring them.”
This year started out on a rough note for the company, whose core business is selling software to investors to track their portfolio and that has raised over $1 billion from investors such as Spark Capital, Andreessen Horowitz, and Union Square Ventures. In January, TechCrunch reported that Carta was suing its former CTO, Jerry Talton. The company said Talton was fired “for cause” on December 23.
In its lawsuit, Carta said it was suing Talton for damages, citing “his wrongful and illegal acts as an executive of Carta” and suggesting he betrayed the company despite being given a role that came with “hundreds of thousands of dollars in salary and benefits, and substantial equity awards.”
It was not the first instance of Carta becoming entangled in a lawsuit. In 2020, the company’s former VP of marketing sued Carta, accusing the outfit of gender discrimination, retaliation, wrongful termination and of violating the California Equal Pay Act. (We featured that case here.) Soon after, four employees spoke on the record with The New York Times, telling the outlet that when they voiced concerns about the way the company is run, they were sidelined, demoted or given pay cuts.
The company has also been accused of poor customer service. TechCrunch this year interviewed numerous Carta customers who expressed dissatisfaction with the company and its representatives. One, a fund manager who is in the midst of transitioning off the platform currently, told TC EIC Connie Loizos that his team had “four different account managers in the less than a two-year engagement at Carta; it certainly didn’t help with continuity and understanding of our fund and needs.”
A separate fund manager who TC interviewed complained of a “lack of communication internally,” saying that it’s “like working with four service providers.” Carta will “ask you for a document that they have on file and should know that they have on file,” she said. “I shouldn’t have to keep track; that’s why I’m paying for fund administration. They’ll tell you to check out ‘the portal’ and the portal is terrible.”
Things only got more tumultuous for the company as the year went on.
In August, Alexandra Rogers, a former sales manager, filed a lawsuit against Carta after alleging she was retaliated against by Ward after filing harassment claims against Carta’s revenue officer, Jeff Perry — according to reporting by Fortune.
Earlier this week, Insider reported that court documents, complaints filed with the EEOC and the California Civil Rights Department, and interviews with more than a dozen current and former employees paint a picture of “a company fraught with harassment and discrimination, a fast-and-loose approach to compliance, and a culture of absolute fealty to an erratic and vindictive CEO.”
TechCrunch has reached out to Carta for comment, and had not received a response at the time of publication.
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