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Carta is making it too difficult to cancel subscriptions, some founders say

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Re: Carta is making it too difficult to cancel subscriptions, some founders say

#71

Post by [deleted] »

Spivak wrote: post #69
terminalbraid wrote: post #67

Earlier quoted context omitted.

I agree and I'm consistently flabbergasted at how many "entrepreneurs" see this as controversial or even wasteful. It's like the same take that "insurance is a scam". (I would not be surprised of these opinions were strongly correlated)

What kind of insurance because both health and auto insurance absolutely are. I don't think it's a coincidence that these two forms are also mandatory by law. Insurance where there's a well defined insurable event that has a known in advance payout are great, life insurance for example. "Insurance" where the insurance company gets to decide if and how much to pay out is flat out bullshit. Everyone with auto insurance…

[deleted]

Re: Carta is making it too difficult to cancel subscriptions, some founders say

#72

Post by gamblor956 »

Narkov wrote: post #49
dogboat wrote: post #33

Earlier quoted context omitted.

Ok then ask for that shutdown money in advance. (Or write it off if someone churns). Or make the recurring payments quarterly or annual.

It's not a money thing. It is a process thing. They have regulations that they must follow to off-board you.

It's a process thing but it's not a regulatory thing.

There are no regulations governing the transition of cap table management, as generally this thing is handled by most companies internally by their Legal and/or Finance departments. It's just tech that felt the need to create software for something that can be done in Excel.

Re: Carta is making it too difficult to cancel subscriptions, some founders say

#73

Post by paultopia »

Spivak wrote: post #69
terminalbraid wrote: post #67

Earlier quoted context omitted.

I agree and I'm consistently flabbergasted at how many "entrepreneurs" see this as controversial or even wasteful. It's like the same take that "insurance is a scam". (I would not be surprised of these opinions were strongly correlated)

What kind of insurance because both health and auto insurance absolutely are. I don't think it's a coincidence that these two forms are also mandatory by law. Insurance where there's a well defined insurable event that has a known in advance payout are great, life insurance for example. "Insurance" where the insurance company gets to decide if and how much to pay out is flat out bullshit. Everyone with auto insurance…

auto insurance definitely isn't a scam. it's not to protect the policyholder, it's to protect the people who the policyholder might run over.

Re: Carta is making it too difficult to cancel subscriptions, some founders say

#74

Post by gamblor956 »

duskwuff wrote: post #54
StressedDev wrote: post #45

Earlier quoted context omitted.

What makes Carta different? Why is offboarding more complex?

As mentioned elsewhere in this thread, Carta can manage assets such as employee stock options. A company can't simply close their Carta account and declare that their corporate equity is now managed elsewhere; there's regulations that govern how everything has to be handed off.

There aren't regulations on this.

Cap tables at most companies (including nearly all publicly traded companies) are handled internally by the Legal department or Finance department. While they may or may not use software more advanced than Excel to manage the cap table, they generally don't put all of their eggs in one basket and rely on a third-party SaaS to do this critical work for them.

Re: Carta is making it too difficult to cancel subscriptions, some founders say

#75

Post by saghm »

malyk wrote: post #66
saghm wrote: post #40

Earlier quoted context omitted.

> This is the sort of thing that a decent corporate lawyer ought to be able to handle. I'm not saying you're wrong, but given that plenty of quite small companies seem to use Carta for handling their shares, it seems pretty ridiculous to have to pay for a lawyer to be able to cancel a subscription. Do early startups really need to keep a lawyer on retainer or be forced to pay by the hour for something like this?

Yes. Startups need and should be accustomed to working with a lawyer. They are needed very frequently in any real business.

I guess my disconnect isn't that I think startups shouldn't be accustomed to working with a lawyer, but that I expected they shouldn't need one for something like this. Maybe there are enough areas where a lawyer is needed that having one on retainer already should be something startups do, so asking them to help with this wouldn't be onerous.

Re: Carta is making it too difficult to cancel subscriptions, some founders say

#76

Post by Sohcahtoa82 »

habosa wrote: post #53

Here’s my Carta horror story, since we’re sharing. I left my last company and had 90 days to buy my options. The day after I left the company (January) I exercised. The total I had to pay was about $20k. I didn’t think a lot about it after that. 6 full months later I get an email from Carta. It says my bank account transfer was unsuccessful. They had tried to pull the $20k from my account 6 months after I authorized…

> The total I had to pay was about $20k. I didn’t think a lot about it after that.

You must be living in an entirely different world to me that you don't think about an upcoming $20K pull. I would have been calling up Carta after ~10 business days, if not sooner, if they were making me sit on $20K in cash.

> and it had overdrafted my checking account by $1k (I don’t keep a ton of cash around).

If a $20K overdrafted by $1K, then you had $19K in cash. I can't imagine what your monthly spend is like to feel the need to keep that much. I only keep $5K. First paycheck of the month comes in on the 1st, mortgage payment comes out on the 2nd, and I pay off the credit card. Anything over $5K left goes into savings. Second paycheck comes in on the 15th, pay off the credit card again, pay utility bills, car insurance, make my monthly IRA contribution, and then again throw everything over $5K into savings.

Re: Carta is making it too difficult to cancel subscriptions, some founders say

#77

Post by stanfordkid »

The answer is to work with your bank to block payments. Equity is a legal contract, it's not going to evaporate because Carta says so. Carta isn't going to hire a debt collector against a well funded startup and get counter-sued / risk the bad PR.

Re: Carta is making it too difficult to cancel subscriptions, some founders say

#78

Post by reaperman »

tivert wrote: post #60

> The issue first surfaced on X after founder Sudarshan Sridharan of Pipeline posted about his struggles trying to cancel, writing, “I’m speechless at how anti-founder @cartainc is. They make it impossible to cancel your subscription or speak to a human support agent.” Oh come on. What rock did that guy crawl out from under? That's industry best practice, especially the speak to a human part.

Just checked ... the company Sudarshan Sridharan founded ( https://withpipeline.com/ ) also offers a B2B Saas (for $150/month) and the terms of service outline that users can cancel inside the application itself (no certified mail or meeting required). Users can also opt-out of arbitration via email as well, not just by mail.

Re: Carta is making it too difficult to cancel subscriptions, some founders say

#80

Post by TomasMilar »

Hi,

I’m the founder of Eqvista — an equity management and 409A valuation provider. Eqvista is a strong competitor to Carta, and we’ve seen a significant number of migrations from Carta for several reasons, including costs, lengthy 409A valuation timelines, difficulty accessing support, and, more recently, adverse media coverage.

One common issue customers face with Carta is how challenging it is to cancel their subscription, as they try to prevent you from transferring your cap table elsewhere.

At Eqvista, we do things differently: - Flexible Plans: Cancel your subscription anytime, with no lock-ins. - Cost-Effective: Up to 70% more affordable than Carta. - Fast and Reliable Support: 100% responsive and dedicated to solving your needs. - Comprehensive Services: We handle $3 billion in client asset valuations monthly, onboard 400 companies every month, and currently serve over 20,000 entities on our platform. - Cap Table Audits: We’ll ensure your cap table is audit-ready and fully compliant.

If you’re interested in joining Eqvista, feel free to contact me directly at tom@eqvista.com.

We can onboard you now and you pay us once your Carta contract ends so you don’t have to pay for two platforms. We will migrate you for free - in 3 days!

Looking forward to helping more startups succeed!

Many thanks, and best of luck!

Tom - https://eqvista.com

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