I'm not at all clear that Carta did anything wrong (and I'm not sure what the latest in the story is to-date since it's being partially told in multiple venues and I don't use Twitter) and I'm not sure we'll ever know because I doubt either Linear or Carta want to lay all their cards on the table.
But, if *all* CartaX was doing is *connecting* potential buyers and sellers to facilitate a potential trade, and then the board would still ultimately have to bless the trade, so what? I don't know, however, if this is all they were doing. But I'm pretty sure most investor agreements prohibit direct 3rd party sales without a board blessing or option to buy the shares first (and yes, I'm sure most startups probably don't want to have to use their cash buy vested options or angel shares back at the current price).
I think the startup ecosystem is overwhelmingly skewed to favor founders and non-employee investors - and *maybe* that's ok since those groups have the most at risk. But I'm definitely in favor of an ecosystem where minor shareholders (i.e. employees with vested shares) can liquidate easily if there is a buyer. Right now stock options for employees - vested or not - are basically like holding lottery tickets. Most of the time they aren't ever going to be worth anything.
I think a practical different between Google and Carta is also that it’s 2024. I’m not so sure if Google was getting off the ground right now that some of Google’s behavior wouldn’t be perceived like Cartas. But we are used to Google and have used free gmail accounts for years - and we kind of know the price of free is the currency of our personal data. This being said when I start paying for something I very much expect privacy for my data - which could be another of Cartas problems.
Isn't the other difference between Carta and Google Search is that Carta is a paid product? When Google provides me helpful results for free, I assume that they're going to make money by selling me targeted advertising. When I use a paid service, I assume they're making enough money by my payments to them. This is especially true if I'm paying for a service for other people - a startup CEO doesn't want their investors to get targeted emails anymore than a parent wants their kids to get targeted ads for Bluey plushies based on the Disney+ subscription the parent pays for.
As usual, a thoughtful piece.
I'm not at all clear that Carta did anything wrong (and I'm not sure what the latest in the story is to-date since it's being partially told in multiple venues and I don't use Twitter) and I'm not sure we'll ever know because I doubt either Linear or Carta want to lay all their cards on the table.
But, if *all* CartaX was doing is *connecting* potential buyers and sellers to facilitate a potential trade, and then the board would still ultimately have to bless the trade, so what? I don't know, however, if this is all they were doing. But I'm pretty sure most investor agreements prohibit direct 3rd party sales without a board blessing or option to buy the shares first (and yes, I'm sure most startups probably don't want to have to use their cash buy vested options or angel shares back at the current price).
I think the startup ecosystem is overwhelmingly skewed to favor founders and non-employee investors - and *maybe* that's ok since those groups have the most at risk. But I'm definitely in favor of an ecosystem where minor shareholders (i.e. employees with vested shares) can liquidate easily if there is a buyer. Right now stock options for employees - vested or not - are basically like holding lottery tickets. Most of the time they aren't ever going to be worth anything.
I think a practical different between Google and Carta is also that it’s 2024. I’m not so sure if Google was getting off the ground right now that some of Google’s behavior wouldn’t be perceived like Cartas. But we are used to Google and have used free gmail accounts for years - and we kind of know the price of free is the currency of our personal data. This being said when I start paying for something I very much expect privacy for my data - which could be another of Cartas problems.
Isn't the other difference between Carta and Google Search is that Carta is a paid product? When Google provides me helpful results for free, I assume that they're going to make money by selling me targeted advertising. When I use a paid service, I assume they're making enough money by my payments to them. This is especially true if I'm paying for a service for other people - a startup CEO doesn't want their investors to get targeted emails anymore than a parent wants their kids to get targeted ads for Bluey plushies based on the Disney+ subscription the parent pays for.