It makes me sick that Carta threatens to cancel a company's securities as a shady retention tactic. I asked securities lawyers & a top law firm. They confirmed Carta can't unilaterally cancel securities. Quote: "pretty bizarre that they say that"
Dan Hightower on X: "It makes me sick that Carta threatens to cancel a company's securities as a shady retention tactic. I asked securities lawyers & a top law firm. They confirmed Carta can't unilaterally cancel securities. Quote: "pretty bizarre that they say that""
More receipts. It gets worse. This is a notification from Carta to an investor after the company unsubscribed from Carta. Can you imagine if your investors got an email out of the blue saying their SAFE was just ... canceled?
Here are my notes (based on research from a top law firm and conversations with securities attorneys) • It's not true that a transfer agent can unilaterally cancel a security/someone's ownership rights. They should not do that, and certainly should not email the shareholders
Given the number and frequency of reports from founders about this tactic, I am convinced that this "barrier" to data ownership is systematically weaponized by Carta, at the expense of companies and their stakeholders. Founders deserve better.
When Carta told me I had to give them a reason for cancelling