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Alexandra Rogers remembers the evening vividly. She was standing in a small hallway, waiting for the restroom, at Hi Dive bar in San Francisco. She and her sales colleagues at Carta, the equity management startup last valued at $7.4 billion, were about to head over to a Giants game, where Carta had treated its sales team to tickets.<\/p>\n
Rogers says she was leaning against the wall near the bathroom, with the back of her foot propped back against it. Her knee was jutted out at about a 45-degree angle, she says. That was when she alleges that Carta\u2019s chief revenue officer, Jeff Perry, walked by, slapped his hand on her leg, squeezed it, then kept walking.<\/p>\n
\u201cIt wasn\u2019t something normal\u2014definitely not professional,\u201d Rogers says in an interview with Fortune<\/em>, recounting the claims she made in a lawsuit against her former employer, Carta, and Perry in August. <\/em>Rogers says she shouted Perry\u2019s name, he turned around, and then she stared at him. \u201cHe just kind of laughed it off and walked away,\u201d she says.\u00a0<\/p>\n Rogers says she was interviewing for a sales manager role at the time, one that would report directly to Perry. Two months later, the evening before Rogers says she officially started the new role, she ended up sitting next to Perry at a Carta dinner, where she alleges in her lawsuit that Perry placed his hand on her leg under the table, twice, and stroked her arm above the table.<\/p>\n \u201cHe touched my leg again,\u201d Rogers sent her mom in a text that evening, according to messages reviewed by Fortune<\/em>.<\/p>\n \u201cWho? Your boss?\u201d her mom responded.<\/p>\n \u201cCRO yes,\u201d Rogers said. \u201cThe one i [sic] complain about.\u201d<\/p>\n Rogers reported these incidents to Carta\u2019s human resources department in June 2023, according to the lawsuit Rogers filed this summer in a California state court in San Francisco. It wasn\u2019t long after that she alleges in her lawsuit that Carta\u2019s CEO, Henry Ward, started behaving differently toward her. She says he started to single her out in meetings and that \u201che was acting very rude and disrespectful.\u201d Rogers says her manager told her that Ward allegedly questioned her \u201cability to be a manager in that role because he thought [she] had an attitude\u201d and that she told Rogers that Ward didn\u2019t \u201clike women with strong personalities,\u201d according to Rogers and legal filings. Shortly after, Rogers says her manager suggested she be demoted to a sales executive role because Ward was \u201cdoubting [her] ability,\u201d Rogers said. When Rogers asked for specific examples, she said she was offered none. In July, Rogers was laid off as part of a broader reduction in staff that impacted the sales department. In August, Rogers filed a harassment and retaliation lawsuit.\u00a0<\/p>\n A Carta spokeswoman, on behalf of the company, Ward, and Perry, declined to comment on the record. In legal filings, Carta and Perry vehemently denied all of these allegations. Perry said in an answer to the complaint on behalf of himself that he \u201cnever at any time interacted with Rogers in a sexual or inappropriate manner, never touched her inappropriately, and never harassed her in any way.\u201d Perry filed a defamation cross complaint against Rogers, alleging that she had \u201ctargeted Perry\u201d and \u201cbegan to create evidence to smear him and his reputation with false statements\u201d when her job was under threat. Prior to the defamation counterclaim being filed, Perry\u2019s lawyer sent a letter to Rogers\u2019 counsel, expressing her intent to bring \u201cmalicious prosecution\u201d claims against Rogers. (Rogers has not yet responded to the counterclaim in court, but her attorney says of the claim: \u201cThese arguments are straight out of the defense victim-blaming toolbox\u2026We remain confident that any jury looking at the facts will side with Allie.\u201d)<\/p>\n Lawsuits like Rogers\u2019 are rare in the tightly knit, still male-dominated world of venture capital and startups, where nondisclosure agreements are prevalent and settlements typically precede public accusations. It\u2019s still infrequent that women go public with sexual harassment or gender discrimination claims, whether via litigation or otherwise\u2014even after the high-profile, three-year Kleiner Perkins case from 2012, filed by Ellen Pao against her employer that she ultimately lost, but that helped lay ground for the #MeToo movement.<\/p>\n Which makes Carta\u2014an equity management software platform that has become one of the industry\u2019s unicorn darlings\u2014unusual. Since 2020, the startup (which boasts board members and investors like a16z\u2019s Marc Andreessen, Silver Lake Partners\u2019 Joe Osnoss, and Lightspeed Venture Partners\u2019 Will Kohler) has had four women come forward with claims of mistreatment, gender discrimination, or retaliation at the company, either via litigation or published statements.\u00a0<\/p>\n In addition to Rogers, there\u2019s Emily Kramer. In 2020, Kramer, Carta\u2019s former vice president of marketing, filed a gender discrimination and retaliation lawsuit that was ultimately settled earlier this year. That same year, Andrea Walne\u2014now Andrea Lamari\u2014who had overseen Carta\u2019s secondaries trading platform CartaX, published an essay on Medium stating that there was a \u201crecurring theme\u201d that played out within Carta, \u201cwhich at times included an element of discrimination, a disturbing cabal of yes-men\u2026and thus a culture of omerta.\u201d In 2023, there have been two lawsuits filed in a state court in San Francisco: Amanda Sheets alleged sex discrimination against Carta and Perry after her disability request was allegedly treated differently than it was with her male peers. Rogers filed her lawsuit this summer, alleging harassment and retaliation. Carta declined to comment on the litigation and essay for this story. In legal filings, Carta and Perry, separately, said of the Sheets case that they generally deny \u201ceach and every allegation and cause of action\u201d and refer to the allegations in the complaint as \u201cunverified.\u201d\u00a0<\/p>\n There has been more playing out behind the scenes. On Oct. 7, 2022, Carta\u2019s former chief technology officer, Jerry Talton, sent a letter to all eight of Carta\u2019s board members, including Carta CEO Henry Ward and a16z\u2019s Andreessen, laying out what he said were serious, systemic problems within the company and stating that he believed complaints of discriminatory or abusive behavior were not being adequately investigated, according to the letter, which was seen by Fortune<\/em>. (Carta fired Talton two months later and is currently engaged in a lawsuit against him, filed in December, that alleged he secretly recorded Carta executives and refused to return Carta property, among other claims. Carta\u2019s board members either declined to comment for this story or didn\u2019t respond.)<\/p>\n Fortune<\/em>\u2019s reporting\u2014which included speaking with eight former and current employees, investors, and people close to the company or board, as well as reviewing hundreds of pages of legal filings, attorney correspondence, and correspondence to the board\u2014reveals how a by-the-book startup success story has evolved into a nightmarish collision of litigation, high turnover, and mounting employee grievances against management.\u00a0The company\u2019s valuation appears to be dwindling at somewhere around $3.8 billion on the secondaries market (down from $7.4 billion two years ago), per data from private company data provider Caplight, and it appears Ward\u2019s employees are questioning his leadership.\u00a0<\/p>\n \u201cThe perception is that [Ward] doesn\u2019t really have control over anything, really, because of what is going on publicly,\u201d says a current Carta employee, who spoke with Fortune <\/em>on condition of anonymity out of fear of being retaliated against.\u00a0<\/p>\n But perhaps the strangest facet of the Carta story is the r\u00e9sum\u00e9s of some of the figures connected to its ongoing litigation. The lawyer defending Carta\u2019s CRO, Perry, is Lynne Hermle\u2014the same lawyer who defended Kleiner Perkins against Ellen Pao in 2012\u20132015. Perry\u2019s wife, Jessica Perry, had also been on Kleiner\u2019s legal defense team. And Matt Murphy sits on Carta\u2019s board. He\u2019s the one who fired Pao.<\/p>\n Carta was cofounded as \u201ceShares\u201d back in 2012 by Ward and venture capitalist Manu Kumar, who had invested in Ward\u2019s previous startup. They conceived of a company that would digitize paper stock certificates, warrants, and options so that a startup could manage its cap table digitally\u2014and they foresaw a whole suite of services, such as 409A valuations, or fund administration capabilities, and, eventually, a liquidity platform.<\/p>\n Carta\u2019s Rolodex of venture investors has documented the trajectory of the company across glowing blog posts. From the start, Carta appeared to have everything investors could want: steady million-dollar capital infusions, product launches, and enviable growth figures. Carta made its first $700 in revenue in January 2014, and by November of that year, had reached a $1 million transaction revenue run rate. In spring 2016, Carta notched 2,000 customers. Five years later, Carta would have more than 30,000 corporate customers and Ward would raise $500 million in capital at a $7.4 billion valuation, becoming one of the highest-valued companies in the private markets.<\/p>\n Ward\u2019s ability to find product-market fit, fundraise, and scale a company is undeniable, and by 2019 there was heaping demand (and competition) among investors to get a piece of Carta. Glowing profiles were published, such as Carta\u2019s early investment in \u201cbuilding extreme empathy and authenticity,\u201d from a 2021 Unusual Ventures blog post, or how Carta had an idea of how to\u00a0\u201callow more employees to take control of their financial destiny,\u201d Lightspeed\u2019s Kohler wrote in 2019.<\/p>\n People who have worked or are working at the company describe other noteworthy details absent in those profiles. Four current and former employees describe frequent organizational restructurings and high turnover. A slew of executives have parted ways with the company in recent years, including Aaron Forth, an ex-chief product officer; Japjit Tulsi, a former CTO; D\u2019Arcy Doyle, former senior vice president of enterprise sales; Webb Stevens, a former chief product officer; Suzanne Elovic, former chief legal and compliance officer; Heidi Johnson, a former chief product officer; Suzy Walther, former chief people officer; Jenny Kim, ex-vice president of HR; and Joe Kondel, ex-vice president of engineering.<\/p>\n \u201cI just didn\u2019t feel like I was able to do high-quality work because of all the turmoil,\u201d one of the former employees tells Fortune<\/em>. Two separate people said that Ward struggles to focus on one thing. Ward is a \u201cman of too many ideas that doesn\u2019t know how to execute them,\u201d the current employee says.\u00a0<\/p>\n Five of those people say that favoritism is prevalent across Carta, and four said that performance was less important than how people aligned with Ward. Four of the women who spoke with Fortune<\/em> say that senior executives were disrespectful toward them.<\/p>\n Talton\u2019s letter sent to the board in October stated that dissent and debate among Carta\u2019s executive team are explicitly disallowed and punished; that job performance is conflated with alliance with Carta\u2019s CEO, Ward; and that senior staffers who express issues are forced out of the company. Talton laid out instances in which he had personally witnessed and reported a senior executive making sexually inappropriate comments at work events, or how Ward had dismissed his concerns over a vice president he believed did not treat female peers with respect.<\/p>\n Within four days of Talton sending his letter to the board, the former CTO was put on administrative leave, according to legal filings. At the direction of Carta\u2019s board, which had been sent the letter, Carta opened an investigation, according to two people with direct knowledge of the matter, hiring the former U.S. attorney general, Loretta Lynch, who now works at the law firm Paul Weiss, to look into Talton\u2019s claims. Barbara Byrne, one of Carta\u2019s only independent board members, spearheaded the investigation, a person with knowledge of the matter told Fortune<\/em>. (The investigation was first reported by Insider.)<\/p>\n It\u2019s not clear how thorough the inquiry was into Ward\u2019s leadership and Talton\u2019s claims, nor the outcome. Carta declined to comment on the matter and wouldn\u2019t specify how many people at Paul Weiss worked on the investigation, how many Carta employees were interviewed at the company, whether any other employees were put on administrative leave, or whether any changes had been made internally as a result of the investigation. One source close to the board told Fortune<\/em> they were impressed by independent board member Byrne\u2019s handling of Talton\u2019s complaint and, without going into details of the investigation, says that the board thoroughly investigated the claims.<\/p>\n About a month after Talton had been put on administrative leave, he allegedly sent an email to Carta\u2019s general counsel, attaching a transcript from a conversation he had recorded. At the end of December, Carta sued Talton, lodging a plethora of allegations against its former CTO that range from secretly recording Carta executives and board members to sexting during working hours on corporate devices and sending offensive messages about women and people of color, according to Carta\u2019s complaint. <\/p>\n Talton\u2019s attorney says the allegations in Carta\u2019s complaint about Talton sexually harassing and discriminating against Carta employees were \u201coutrageous fiction\u201d and noted that, in an amended complaint, Carta had removed language suggesting Talton had violated Carta\u2019s antidiscrimination and anti-harassment policies. \u201cHenry Ward continues his attempts to retaliate against Jerry and destroy his good name after Jerry notified Carta\u2019s board of the serious, systemic problems he witnessed at the company,\u201d Talton\u2019s attorney wrote in a statement.<\/p>\n \u201cThe board is made up of a lot of [venture capitalists], who don\u2019t normally support something like this,\u201d the person close to the board says of Carta\u2019s decision to sue Talton. \u201cNo one likes to see an employee sued. Henry does play hardball. The board felt pretty strongly there were some bad things done here.\u201d\u00a0<\/p>\n This summer, Carta sued another one of its former executives\u2014former chief product officer Heidi Johnson, alleging she has copies of the secret recordings of executives. Neither Johnson nor her attorney returned a request for comment.<\/p>\n Current employees have seemingly become accustomed to litigation at Carta. After learning of Rogers\u2019 lawsuit against Carta, the current employee says, \u201cObviously this is not the first time this has happened at this company, and it might not even be the last.\u201d<\/p>\n At the same time execs were turning on one another, Carta\u2019s business was taking a hit.\u00a0<\/p>\n As an equity management platform, the company\u2019s performance is closely intertwined with the performance of the broader startup ecosystem. With funding rounds slowing down, valuations in decline, and the amount of capital being deployed shrinking, Carta has trimmed its staff, laying off approximately 10% of its employees in January, with a smaller layoff in July that Rogers was a part of.<\/p>\n Meanwhile, the value of Carta shares is down approximately 48% from their price tag in 2021, according to private market data company Caplight, which tracks secondary market activity. (A Carta spokeswoman told Fortune <\/em>that revenue was up 47% in 2022 and Carta had 45,000 paying and nonpaying customers at the end of September 2023.)<\/p>\n And competition is heating up. Morgan Stanley has been delving into the space since its acquisition of Solium (now known as Shareworks) in 2019. And there are smaller players rising up from the bottom of the market, such as Ledgy or Eqvista. \u201cToday Carta is being squeezed from both sides of the market, and I think the years of mismanagement and lack of focus are finally starting to show,\u201d a former employee says.<\/p>\n In the private markets, it\u2019s not normal for a board of directors to push out a founder, but it\u2019s not necessarily rare either. Some of the most recognizable examples have been WeWork\u2019s Adam Neumann and Uber\u2019s Travis Kalanick\u2014with plenty of lesser-known examples like Etsy\u2019s Rob Kalin, Groupon\u2019s Andrew Mason, or Tesla\u2019s Martin Eberhard.<\/p>\n This isn\u2019t lost on Ward. In February, a few months after Carta\u2019s board-led investigation into Talton\u2019s letter, Ward published a post he had written earlier on Medium, explaining some of the executive departures at the company. \u201cI hope I get to work at Carta until I\u2019m too old to,\u201d he wrote. \u201cBut Kings and Queens rarely die a natural death\u2026Most founder\/ceos don\u2019t go the distance. Statistically, I am more likely to be fired from Carta than retire from it. So I have to earn it every day, too.\u201d<\/p>\n For the women who worked there, the stakes can seem high for speaking out.\u00a0Carta\u2019s ongoing litigation with its former employees has frightened women from coming forward and going on the record with their own experiences, former staffers say.\u00a0But Rogers hopes her lawsuit will force a painful conversation. \u201cThis is looking like a systemic issue within Carta, and the only way to disincentivize this in the future is going forth with a lawsuit and making an example of this type of behavior,\u201d Rogers says. \u201cThe way to get these things to stop is by coming forward.\u201d<\/p>\n<\/div>\n #women #claims #mistreatment #unicorn #startup #Carta<\/p>\n","protected":false},"excerpt":{"rendered":" Alexandra Rogers remembers the evening vividly. She was standing in a small hallway, waiting for the restroom, at Hi Dive bar in San Francisco. She and her sales colleagues at… <\/p>\n","protected":false},"author":1,"featured_media":2701,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[4694,3941,3481,4695,3572,570,4696,167],"class_list":["post-2700","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-carta","tag-claims","tag-discrimination","tag-mistreatment","tag-silicon-valley","tag-startup","tag-unicorn","tag-women"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/2700","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2700"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/2700\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/2701"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\u2018Empathy and authenticity\u2019<\/strong><\/h2>\n
\u2018More likely to be fired\u2019<\/strong><\/h2>\n