The tiff began on Friday when Karri Saarinen, CEO of software startup Linear Orbit Inc. and a customer, posted a complaint that Carta had used its knowledge of the company’s investors to approach one of them via email about selling Linear shares on the secondary market.
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“This might be the end of @cartainc as the trusted platform for startups,” Saarinen wrote on X.
In a response posted on Medium, Carta said the issue, which also impacted two other customers, was an “internal breach of protocol.” CEO Henry Ward wrote, “It is unacceptable and we’ve dealt with the violation on Saturday morning and are continuing the investigation to make sure it never happens again.”
In a more colorful exchange on X, Ward accused Saarinen of calling for the demise of Carta, which he said would “eliminate 2,000 jobs and strand 40,000 customers.” Carta was most recently valued at $7.4 billion, and has raised more than $1 billion from investors including Andreessen Horowitz and Menlo Ventures, according to PitchBook data.
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While Carta occupies a role in the relatively dry industry of enterprise software, the company is no stranger to drama. Last year, it laid off staff and sued a former executive. In 2020, the company was sued by another former executive who alleged unequal pay for women.