Subscription management is a common challenge for startups, where costs for essential tools like cap table management software can run into thousands annually. Carta, a San Francisco-based leader in cap table management, is now under fire for making it challenging for users to cancel their subscriptions.
The controversy began on X when Sudarshan Sridharan, founder of Pipeline, shared his frustration. “I’m speechless at how anti-founder @cartainc is. They make it impossible to cancel your subscription or speak to a human support agent,” Sridharan wrote. He highlighted that Carta required a meeting with a customer success manager to process cancellations, with the earliest available slot falling after his December 17 renewal date.
Adam Ryan, CEO of Workweek, echoed similar experiences. Ryan noted that Carta’s cancellation system only offered meeting dates after his subscription’s renewal deadline. To resolve the issue, he bypassed the system by emailing Carta and disputing the charge with his credit card provider.
Carta attributed these delays to a “one-time staffing challenge,” stating that they are addressing the issue and expanding their live support team’s availability. A company spokesperson emphasized that the meeting system is designed to ensure a smooth migration of securities data and provide clarity during the cancellation process.
Critics argue that mandatory meetings for cancellations are neither standard nor practical. Competitors like AngelList and Pulley allow customers to cancel directly through their platforms or via email without requiring meetings. Pulley’s VP of Marketing, Alison Gonzalez, called Carta’s approach “not a standard industry practice” and emphasized their straightforward cancellation policy.
Concerns have also been raised about the risk of staffing shortages delaying cancellations. While Carta’s website suggests meetings are typically available the next day, founders shared screenshots showing delays of up to 17 days. One user reported that a renewal pricing meeting was only available at 6:00 a.m. on December 26, an inconvenient time following the Christmas holiday.
Carta defended its approach, citing its role as an SEC transfer agent, which involves additional steps compared to typical SaaS products. However, Pulley, also an SEC transfer agent, manages cancellations without such requirements.
Despite the criticism, Carta continues to have loyal supporters. Bill Smith, founder of Landing, praised the company’s product after switching back from a competitor. Katie Jacobs Stanton, an investor in Carta, also vouched for the company, suggesting the issues might stem from an isolated incident.
This isn’t the first time Carta’s practices have faced scrutiny. Earlier this year, Linear’s founder accused the company of improperly handling private cap table data. Carta later exited the secondary stock trading market, selling that part of its business to Public in August.
Featured image courtesy of Empower Africa
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