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Carta to exit secondary trading business

henrysward.medium.com

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Re: Carta to exit secondary trading business

#41

Post by granshaw »

nico wrote: post #40
granshaw wrote: post #32

Separate of what did or didn’t happen here, I hope more companies crack the secondary market puzzle. The current environment really sucks for startup employee liquidity and might be going on for a lot longer.

Yes. Btw, what are someone’s potential liquidity alternatives for ISO options in profitable private startups? What’s an alternative to Carta’s solution?

I know there’s equityzen and probably other marketplaces, but I think the main issue is most even late stage startups ban secondary trading

This knowledge might be outdated, I quit that game and opted to join public companies since a couple years ago.

Yes it’s an upfront risk that employees take when joining but man does it not also feel incredibly one sided and smelly, esp the later stage the startup gets

Re: Carta to exit secondary trading business

#42

Post by ipsum2 »

Animats wrote: post #39

So are they spinning the secondary trading business off into a separate company, or shutting it down completely? If they shut it down, their claimed US$8 billion market cap goes poof, doesn't it? Maintaining cap tables as a service can't be good for more than a few million a year in revenue.

> Fast forward to today, our business is broken down as follows: the captable business is about $250M/year, fund administration is about $100M, private equity is about $20M, and the secondary trading business is about $3M.

$250M is more than a few million.

Re: Carta to exit secondary trading business

#43

Post by CityOfThrowaway »

enra wrote: post #35

I’m CEO of Linear who raised the alarm on this. I have to commend them for making this decision and removing the conflict of interest. However they didn’t address the fact that sales people had convenient access to data and how long & broadly that access was abused. Edit: fixed “Linear CEO” to “CEO of Linear”

They did address it... by completely eliminating the department.

They didn't deep dive retro it, but in that, we know the answer.

Re: Carta to exit secondary trading business

#44

Post by foooorsyth »

earnesti wrote: post #22
notfried wrote: post #11

Earlier quoted context omitted.

A quick search shows me a number of alternatives to Carta, but none that I have ever heard of or come across. Is there any competitor that is considered the second best? Carta just seems to me what everyone had been using without a second thought.

What about an excel sheet?

Some VCs will withhold investment until you use a product like Carta or Pulley. Cap table in Excel carries major risk.

(And yes, Carta/Pulley are often portcos of those VCs pushing you to use them)

Re: Carta to exit secondary trading business

#45

Post by altdataseller »

tiffanyh wrote: post #34
jez wrote: post #31

When a company says something like: “Fast forward to today, our business is broken down as follows: the captable business is about $250M/year, fund administration is about $100M, private equity is about $20M, and the secondary trading business is about $3M.” Is that assumed to be yearly revenue? Earnings? Something else?

I’d assume annual since the first number says “/year”, but that blows my mind captable mgmt is $250M in annual revenue.

Is that too little? Too much?

Re: Carta to exit secondary trading business

#46

Post by mkl »

o0-0o wrote: post #24
earnesti wrote: post #22

Earlier quoted context omitted.

What about an excel sheet?

I have a competitive product and excel is a very valid option but if you want automation for anything like this, you really need something like us hit me up on DM if you want a demo

HN doesn't have DMs, and you don't have any contact info in your profile. I agree about just posting a link though - self-promotion is okay if it's clearly relevant and up-front.

Re: Carta to exit secondary trading business

#48

Post by milkglass »

CityOfThrowaway wrote: post #43
enra wrote: post #35

I’m CEO of Linear who raised the alarm on this. I have to commend them for making this decision and removing the conflict of interest. However they didn’t address the fact that sales people had convenient access to data and how long & broadly that access was abused. Edit: fixed “Linear CEO” to “CEO of Linear”

They did address it... by completely eliminating the department. They didn't deep dive retro it, but in that, we know the answer.

So strange. What are the data retention requirements for situations such as this?

The whole thing just feels so off. Some big moves but very little details from Carta.

Commitments just sound like empty promises now, especially when they're presented on Medium. Did any customers receive assurance or details of what went down?

Re: Carta to exit secondary trading business

#49

Post by jjtheblunt »

enra wrote: post #35

I’m CEO of Linear who raised the alarm on this. I have to commend them for making this decision and removing the conflict of interest. However they didn’t address the fact that sales people had convenient access to data and how long & broadly that access was abused. Edit: fixed “Linear CEO” to “CEO of Linear”

what is "linear"? [ edit : thanks below! ]

Re: Carta to exit secondary trading business

#50

Post by yesimahuman »

xyzzy_plugh wrote: post #14

To be honest this still seems off. If Carta shows respect for your data and privacy I believe they could still offer an opt-in secondary market, and I can see plenty of companies being interested in participating in it. No one was complaining about the secondary market, they were complaining that Carta was double dipping with their data without consent. This whole post feels like he's just trying to move the goalpost…

Agreed. And to make such a seemingly big decision in a matter of a weekend. Respect for being decisive I guess but this seems impulsive and framing the secondary opportunity to conveniently fit the narrative instead of addressing the core issues that, when resolved, might make it viable
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