This is a good thing for employee-investors, right?
Depends if you are the founder and how tightly you want to control the price
Carta doing unsolicited tender offer outreach to their customers' investors
61–70 of 87 posts
Re: Carta doing unsolicited tender offer outreach to their customers' investors
#62Earlier quoted context omitted.
Not close because it does not involve a public company. Still seems shady.
privately held securities as well as non-equity securities can be involved in insider trading, specifically it is a fraud doctrine instead of a "publicly traded equity" doctrine, so it is quite flexible for different reasons Carta's solicitation doesn't necessarily trigger that, by mere nature of contacting people
+1
affiliates (insider) have to certify below a certain threshold its a private buyer and a private seller so no biggie
Re: Carta doing unsolicited tender offer outreach to their customers' investors
#63Bizarre. Carta has an opt-in liquidity program that I'd expect to be the source of this type of offer, but doesn't fit the case here. I'm guessing someone fucked up and should not have considered this particular investor for a tender. I'm willing to give Carta the benefit of the doubt here, that this is a one-off fuck up (this type of offer being a human-managed process wouldn't surprise me as it's typically high-tou…
+1 Clearly looks manual high touch email
Re: Carta doing unsolicited tender offer outreach to their customers' investors
#64Can someone explain this in simple language?
Imagine you are planning a wedding and you use party.com as an easy way to manage the guest list. Maybe you give your friend two seats — him and a plus one — the Smith family four seats, and your diving club pals a whole table. Also, you’ve invited surprise guest auntie Beyoncé. These are all people with whom you have entrusted important rights such as dressing nicely, staying relatively sober, and not poking the cak…
Lol… someone has had quite a wedding experience
Re: Carta doing unsolicited tender offer outreach to their customers' investors
#65Can someone explain this in simple language?
Companies typically use Carta to manage their cap table, shares, and overall ownership of the company. This requires a high level of trust as there is a lot of financial information at stake. Carta seems to be taking this confidential information and is potentially sharing it with other investors and soliciting investors to sell their shares. This is a big no-no.
Same can be said about JP Morgan who solicts you with credit card offers and other financial products no?
They know where you live and how much is your credit score you bank balance
Re: Carta doing unsolicited tender offer outreach to their customers' investors
#66Hold on! Is this legal in any way? Using confidential information held on behalf of third parties to become market makers?
There are 2 guys with spreadsheets in denver doing the same with information scrapped of linkedin and pitchbook on who works where who invested where…
Re: Carta doing unsolicited tender offer outreach to their customers' investors
#67I'm OP on the tweet. To clarify on some points why I think this is wrong: Private companies generally don't want or allow secondary transactions. Every good company wants to manage their cap table and who is on it. Every shareholder has some level of rights and sometimes you need their signatures on things. A problematic shareholder can cause a lot of problems that are time consuming to the company. Companies do offe…
Do you have transfer restrictions and/or a ROFR in your org docs?
These often don’t apply to Preferred Stock.
Re: Carta doing unsolicited tender offer outreach to their customers' investors
#68I'm OP on the tweet. To clarify on some points why I think this is wrong: Private companies generally don't want or allow secondary transactions. Every good company wants to manage their cap table and who is on it. Every shareholder has some level of rights and sometimes you need their signatures on things. A problematic shareholder can cause a lot of problems that are time consuming to the company. Companies do offe…
Thanks. Looks like some eager sales person. Info on price is available on multiple platforms. In fact some of your investors could be buyers. I am a Carta user and my investors did not get any if these emails (I checked). My customer success person at said carta markets new products/service so maybe just opt out of emails/do not contact.
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Re: Carta doing unsolicited tender offer outreach to their customers' investors
#69Re: Carta doing unsolicited tender offer outreach to their customers' investors
#70Earlier quoted context omitted.
What's wrong about folks selling shares they own? Maybe it's bad for the founders, but there's always a good chance these employees may not see a real liquidity event.
It's generally bad for the company as a whole. Liquidity erodes the 409A discount[1], which then makes other grants (either future or existing, one way or another) less valuable. This is a pretty classic case of local vs. global optima, like in the prisoner's dilemma. If you're interested in startups, I'd look for founders who 1) give you the maximum exercise window (10 years with ISO->NSO conversion if you leave), 2…
Telling rank-and-file employees they don't want liquidity for valuation and tax reasons smells like a scam.