Running a startup can be expensive and require various subscriptions. Cap table management software that helps founders organize their finances can cost thousands of dollars per year.
San Francisco-based Carta is the market leader in this industry. But some startup founders say Carta makes it extremely difficult to cancel subscriptions.
The issue started when Sudarshan Sridharan, founder of Pipeline, posted about his struggle to cancel, writing, “I am speechless at the attitude of the anti-founder @cartainc. You won't be able to talk to a human support agent.”
Carta requested a “cancellation request” meeting with a customer success manager to terminate the subscription, he wrote. However, the slot was only available from December 26th, well past the December 17th renewal date, the founder posted:
Adam Ryan, CEO of startup WorkWeek, also posted about not being able to schedule cancellation requests until well past the renewal date.
“Once you check the box to cancel, a calendar will pop up. Next available date is December 26th. Our renewal date is [December] 17th,” Ryan told TechCrunch. “I have never completed that process. I emailed Amex and told them it was not approved and showed them a screenshot so they could reject the vendor.”
Carta told TechCrunch that the problem with conference reservation cancellations was due to a “one-time staffing issue.”
“This was a one-time staffing issue that resulted in calendar availability issues, which are currently being resolved,” a Carta spokesperson said. “Customers who require assistance during this period can contact our live support team via chat or phone during non-business hours.”
However, several of Carta's competitors told TechCrunch that they have not held any meetings to cancel the service.
“Customers can completely cancel their subscription directly within the software with the click of a few buttons or by sending us an email,” said Sumukh Sridhara, Founder Product Head, AngelList. says. “In my opinion, there is no good reason for a cap table vendor to force you to answer the phone.”
Pulley, another competitor, said the same thing.
“At Pulley, the cancellation process is easy. Customers can cancel their subscription by emailing support@pulley.com. There is no need to make a reservation or attend a cancellation meeting (this is not standard industry practice),” said Alison Gonzalez, Pulley's vice president of marketing. “Cancellation requests will be processed upon receipt of email, and these requests will be processed as soon as possible to allow customers to cancel before their renewal date.”
Requiring these types of meetings risks delaying when founders can cancel due to staffing shortages. A video on Carta's website shows that such a meeting could be held the next day. However, two screenshots shared by the founders show that this month's schedule is only available until 17 days from now.
Another screenshot shared exclusively with TechCrunch shows a meeting regarding renewal pricing (not cancellation) available only once this month at a very inconvenient time, namely at 6am on December 26th, the day after Christmas. is shown.
Carta says its reservation system is designed to help customers fully understand the process and transition their securities data as smoothly as possible.
“We are offering reservations to ensure our customers have a clear understanding of the cancellation process, best practices to reduce the impact on shareholders and investors, and can initiate the safe and appropriate transfer of securities data. (Customers will no longer be able to access the Carta platform, which we contract with Carta for services),'' he told TechCrunch.
“We understand that some customers prefer a less customized approach, so we always welcome feedback and will continue to take it into consideration.”
Carta also said that its stock management is “more than just a SaaS product” and that its role as an SEC transfer agent “requires different procedures than a typical SaaS company.”
However, Pulley, which does not use cancellation reservations, is also an SEC transfer agent, according to Pulley's website.
Many of the founders still use Carta, and the original viral post includes comments from people praising the company's product.
“I switched from Carta to Diligent to cut costs, but it was a big mistake. I went back to Carta and will never leave Carta again. It is a 100x better product and continues to get better. ” Landing founder Bill Smith posted.
Katie Jacobs Stanton, a “small investor” in Carta who also uses the software, said: “It's a bug! They've been really great to our team (and to us). .”
Karuta practices have long been the subject of intense scrutiny. In January 2024, Kari Saarinen, founder of coding startup Linear, claimed that a Carta employee made an offer of stock to one of his angel investors without notifying Saarinen in advance. and accused Carta of sharing private cap table data. Carta eventually exited the secondary stock market and sold to stock trading startup Public in August of this year.