"One platform, unlimited potential" is the tagline currently displayed on Carta's website. Carta is a well-known cap table management solution that is widely used and appreciated by startups and founders. This solution enables companies to accurately monitor ownership stakes as the company undergoes various funding events and experiences changes in its investor composition on the cap table.
However, it has become evident that when Carta referred to "unlimited potential," they were actually referring to the unlimited potential to cause inconvenience to their customers.
What is Carta?
Carta's business model was simple: pay a fixed price and receive a secure and private space to manage and organize equity in your company. This model was a hit with many companies and founders.
As a founder, your cap table is sacred, and the last thing you want is for it to fall into the wrong hands. Naturally, you want to have control over when to sell your company's stock. Until recently, Carta was a trusted partner for equity management. However, everything changed when chaos ensued.
What happened at Carta?
Carta exposed itself by contacting one of the angel investors of a company that stored their cap table on Carta and asking him to sell his holdings. This raises the question of how Carta would know that he was holding shares unless there was a data leak or Carta willingly shared private user data.
Many founders are now extremely upset after witnessing Carta's management attempting to recruit their own cap table shareholders in order to purchase their shares. Naturally, this creates a clear conflict of interest.
So, why should you care about this? Well, this is a perfect example of why we should be cautious about trusting SaaS products. Time and time again, they mishandle or sell our data, which can cause more harm than good for the end user. It's as if SaaS has become synonymous with data "leaks".
What about the secondary market?
Following the success of their cap table management tool, Carta wanted to create a secondary market that would provide seamless transfer of ownership of shares for startups that are not yet publicly listed.
Until now, this asset class was fragmented and lacked liquidity. Creating a secondary market based on the accumulated experience gathered from handling the cap tables tool would position Carta as an ultimate player, capable of delivering on this mission. They would understand both the customer base and the needs of the investors, as well as the companies that would trade on the platform. A true definition of a cash cow.
Logically, such a service would pose an attractive marketplace for all the startup enthusiasts and angel investors, opening the doors of investing in startups to simple retail investors.
In theory, all of this sounds great and Carta is bound to become a unicorn company. However, in the light of the recent scandal, to preserve what was left of their credibility, Carta pulled out of the secondary market project, citing“Because we have the data, if we are ~trading secondaries, people will always worry that we are using the data, even if we are not. So we have decided to prioritize trust, and exit the secondary trading business.” Clearly, mishandling user’s data comes with its own business risks.
Don’t get stuck in SaaS
With all this controversy, a natural question arises: "How can I avoid these issues while still reaping the benefits of SaaS?" The answer lies in private sharding. Private sharding is a blockchain technology that involves taking a portion of the blockchain and making it completely private.
At Calimero, users can store their data on private shards, ensuring both efficiency of operations and real privacy. With our technology, it’s possible to build equity management tools, secondary markets, real-world token asset marketplaces and more. The best thing is - your data is only yours, no leaks. You as a founder dictate who and when can have access to your cap table, trade your stocks or see your transactions.
Our platform not only guarantees unparalleled data ownership and privacy, but also embeds trust into every transaction through smart contracts. What sets us apart is our seamless interoperability and the ease with which it can be integrated into existing systems. This means that there’s no vendor lock-in, as Carta’s users are experiencing now. The platform's scalability and cost-effectiveness make it an ideal choice for startups and enterprises. Calimero is not just a platform; it's a gateway to a more secure, transparent, and efficient future for businesses in the digital age.