Carta is making it too difficult to cancel subscriptions, some founders say
https://techcrunch.com/2024/12/12/carta-is-making-it-too-difficult-to-cancel-subscriptions-some-founders-say/By impish9208 at
paultopia | 3 comments | 2 weeks ago
Dirty tricks like writing a contract that says something like "you can cancel at the end of a term, but you have to have a meeting with us," and the contract doesn't say anything about availability of meetings... then the company only offers meeting times after an automatic renewal in order to cheat people into giving them more money... well, that smells like a really good excuse for a lawyer to argue that the duty of good faith has been breached. And even if the company is honest that they were just unable to schedule a meeting beforehand, a decent lawyer might be able to come up with enough of a theory for recovery to negotiate something fair.
[1] https://www.americanbar.org/groups/business_law/resources/bu...
hn_throwaway_99 | 5 comments | 2 weeks ago
This isn't a Comcast subscription. This is an enterprise software deal that costs many multiple thousands of dollars. Anyone that thinks that Carta was ever going to go "Oh, sucks to be you, you couldn't schedule your cancellation meeting before the renewal date, well, tough cookies, you have to pay us $18k for your next contract year" simply doesn't know how enterprise software deals work. There is no need to get a lawyer involved because all you have to do is call up Carta and say "Your shit is broken, there are no cancellation meetings for weeks."
To emphasize what I put in some of my other comments, sure, Carta needs to fix their shit, and I think the Techcrunch article is making it more about the fact that you have to have a cancellation meeting in the first place (which is a valid compliant), but this idea that it's some deliberate form of "dark pattern gotcha" just belies a misunderstanding of how enterprise software subscriptions work.
StressedDev | 1 comment | 2 weeks ago
Here are some other thoughts:
1) Canceling a subscription should be easy and take less than 3 minutes. There is nothing special about enterprise software subscriptions.
2) Requiring a meeting to cancel and then scheduling the meeting after the customer is charged a renewal fee is outrageous. This should never happen.
3) Customers tried to contact Carta and could not get help. This means they could not just "call up Carta" and tell them "Your shit is broken, there are no cancellation meetings for weeks."
hn_throwaway_99 | 1 comment | 2 weeks ago
yawaramin | 0 comments | 2 weeks ago
conductr | 1 comment | 2 weeks ago
But honestly, I always redline the auto renewal clause anyway so they want to speak with me.
thelock85 | 0 comments | 2 weeks ago
sharkweek | 0 comments | 2 weeks ago
Worked at a few SaaS companies and there are playbooks for retention, upselling, renewals, etc but if a customer wants to cancel, the company will cancel.
I’d put more weight on Carta in this example just having a broken process that I’m sure this negative press will incentivize them to respond and fix.
Loxicon | 0 comments | 7 days ago
You have highlighted an even scarier issue... enterprise software deals, if they all work like this, are scummy and the "way it works" isn't okay.
nailer | 0 comments | 2 weeks ago
Really? I have some small angel investments and use Carta. The companies are seed stage. I’ve never considered it enterprise software.
saghm | 1 comment | 2 weeks ago
I'm not saying you're wrong, but given that plenty of quite small companies seem to use Carta for handling their shares, it seems pretty ridiculous to have to pay for a lawyer to be able to cancel a subscription. Do early startups really need to keep a lawyer on retainer or be forced to pay by the hour for something like this?
malyk | 2 comments | 2 weeks ago
terminalbraid | 1 comment | 2 weeks ago
Spivak | 2 comments | 2 weeks ago
Insurance where there's a well defined insurable event that has a known in advance payout are great, life insurance for example. "Insurance" where the insurance company gets to decide if and how much to pay out is flat out bullshit. Everyone with auto insurance has experienced the— we decided the value of the car we declared totaled is $x where the cost of buying your exact car same year same mileage is at least $2x, usually $3x.
My favorite health insurance story is the one time I had to have an operation out of network because there were no in-network doctors that could do it. I got all the right paperwork, insurance said they would cover it, got it done and the cost was well beyond my out of pocket max. I called up insurance asking where my check was for the difference between my oopm and what I paid. Well guess what, the insurance company "decided" that the operation actually cost exactly my deductible so they owed me $0. The breakdown was hilariously bad, they claimed an anesthesiologist costs $17.
paultopia | 0 comments | 2 weeks ago
saghm | 0 comments | 2 weeks ago
chatmasta | 0 comments | 2 weeks ago
thephyber | 3 comments | 2 weeks ago
This is the same any-consumer behavior that makes people hate companies.
Gotta love that Carta’s competitors are selling that they don’t have the same cumbersome cancellation policy in the article.
thot_experiment | 1 comment | 2 weeks ago
hn_throwaway_99 | 4 comments | 2 weeks ago
As a somewhat macabre example, with CEOs now literally becoming targets after the UHC assassination, I read an article on how many top execs now deliberately take themselves out of the running for CEO. Why put a giant target on your back like that, when you'd still be paid incredibly handsomely to be SVP or whatever but be 10 times more anonymous? So what that does is shrink the potential CEO pool even further, and then these folks demand even more compensation.
To emphasize, I think what we have at present is close to the worst of all possible worlds if CEOs are paid a king's ransom but then escape responsibility when shit goes bad. But I think a better answer is to more evenly distribute both the spoils of success and the responsibilities in a business.
thot_experiment | 1 comment | 2 weeks ago
It's broken at the most baseline level where an individual stealing $1k will face much harsher consequences than an employer stealing $1k of wages.
nickff | 0 comments | 2 weeks ago
Loughla | 0 comments | 2 weeks ago
So, I'm with OP. They're going to have ridiculous compensation, therefore they should have personal responsibility if something goes wrong. Justify that big paycheck and put your money where your mouth is if your want it.
waterhouse | 0 comments | 2 weeks ago
asdasdsddd | 1 comment | 2 weeks ago
ethbr1 | 0 comments | 2 weeks ago
Not least, because the incentive to steal from your employer scales with the difference between your compensation and potential gains.
Do we really want someone making $50k a year also making decisions that could easily be corrupted to get millions in kickbacks?
kstrauser | 0 comments | 2 weeks ago
az226 | 0 comments | 2 weeks ago
burcs | 5 comments | 2 weeks ago
Between this and the fact they got caught sharing private cap table data, it's like they're actively being hostile to their users.
hn_throwaway_99 | 1 comment | 2 weeks ago
> “We switched from Carta to Diligent to try to reduce cost and it was a disaster. Switched back to Carta and will never leave again. It’s a 100x better product and keeps getting better,” posted Bill Smith, founder of Landing.
The 2 main issues that are discussed here actually don't seem like a big deal to me in the grand scheme of things:
1. While I think having to schedule a meeting to cancel is annoying, I think the issue in the article about not being able to have a meeting until after the renewal date seems like a pretty obvious bug to me in the sense that someone's calendar was hosed which is why cancellation meetings weren't available for so long. An f up to be sure, but this feels to me very like an unintended event that then gets amplified on Twitter/social media because the optics are so bad.
2. The cap data data issue was bad, but by all accounts Carta did an appropriate mea culpa, and in any case have gotten completely out of the "secondary market" market which was so problematic to begin with.
I don't mean to make this sound like I'm "letting them off the hook", but I'm just emphasizing that, in the business world, business leaders tend to look at things from much more of a direct cost/benefit analysis, and the pain points above just really aren't that big of a deal to most business leaders. Note that's considerably different compared to consumer products where people are much more likely to "rage quit".
And the fact is, everyone I know says Carta is excellent at their core functionality. As an employee with ISOs from multiple different companies that used Carta, I'd say that at least from the perspective of an employee equity holder that their product is very good.
bloodyplonker22 | 0 comments | 2 weeks ago
orionsbelt | 1 comment | 2 weeks ago
itake | 1 comment | 2 weeks ago
br13n444 | 1 comment | 2 weeks ago
yesimahuman | 0 comments | 2 weeks ago
walrus01 | 2 comments | 2 weeks ago
mandevil | 1 comment | 2 weeks ago
They are also involved in trading lawsuits with former exec turned whistleblower for two different people. https://medium.com/@jerrytalton/when-your-company-tries-to-c... is the former CTO's take on the situation. https://levyvinick.com/wp-content/uploads/2020/07/COMP-for-D... is the former VP of marketing's filed lawsuit, I can't find a blog post from her.
walrus01 | 0 comments | 2 weeks ago
burcs | 0 comments | 2 weeks ago
habosa | 4 comments | 2 weeks ago
I left my last company and had 90 days to buy my options. The day after I left the company (January) I exercised. The total I had to pay was about $20k. I didn’t think a lot about it after that.
6 full months later I get an email from Carta. It says my bank account transfer was unsuccessful. They had tried to pull the $20k from my account 6 months after I authorized it with absolutely no warning, and it had overdrafted my checking account by $1k (I don’t keep a ton of cash around).
Ok no big deal, I’ll move the money around and try again. Nope, Carta decided that after a single failed attempt at payment my options were PERMANENTLY canceled. Like, I no longer have the right to exercise them ever. No equity in the company for me, sorry.
After going back and forth with Carta they insisted they “had” to do this even though that’s BS. There’s no reason they couldn’t have attempted a second time to draw payment, they’d already waited 6 months.
To get the equity I had worked multiple years for I had to go to the CEO of my former company and beg personally. He got the board to back-date an equity offer for me of the same amount so I could exercise again. If I had left under left friendly terms I’d have been screwed.
So yeah, don’t use Carta.
robocat | 0 comments | 2 weeks ago
That is one seriously fucked up delay.
I hate having to closely monitor "professionals" to verify they do their job.
krashidov | 0 comments | 2 weeks ago
Sohcahtoa82 | 1 comment | 2 weeks ago
You must be living in an entirely different world to me that you don't think about an upcoming $20K pull. I would have been calling up Carta after ~10 business days, if not sooner, if they were making me sit on $20K in cash.
> and it had overdrafted my checking account by $1k (I don’t keep a ton of cash around).
If a $20K overdrafted by $1K, then you had $19K in cash. I can't imagine what your monthly spend is like to feel the need to keep that much. I only keep $5K. First paycheck of the month comes in on the 1st, mortgage payment comes out on the 2nd, and I pay off the credit card. Anything over $5K left goes into savings. Second paycheck comes in on the 15th, pay off the credit card again, pay utility bills, car insurance, make my monthly IRA contribution, and then again throw everything over $5K into savings.
habosa | 0 comments | 2 weeks ago
gpi | 0 comments | 2 weeks ago
mukundmohan | 3 comments | 2 weeks ago
If that rule is law, then what are the fines that Carta faces if it does not adhere to that rule.
duskwuff | 0 comments | 2 weeks ago
downWidOutaFite | 0 comments | 2 weeks ago
griomnib | 0 comments | 2 weeks ago
They can offer “rules” of questionable value post-Chevron, but even in areas like COPPA where they have clear statutory authority, and widespread lawbreaking, they do nothing.
However, like all things in the United States, justice is for sale, you just need to sue.
mackman | 1 comment | 2 weeks ago
drpossum | 0 comments | 2 weeks ago
TomasMilar | 0 comments | 2 weeks ago
I’m the founder of Eqvista — an equity management and 409A valuation provider. Eqvista is a strong competitor to Carta, and we’ve seen a significant number of migrations from Carta for several reasons, including costs, lengthy 409A valuation timelines, difficulty accessing support, and, more recently, adverse media coverage.
One common issue customers face with Carta is how challenging it is to cancel their subscription, as they try to prevent you from transferring your cap table elsewhere.
At Eqvista, we do things differently: - Flexible Plans: Cancel your subscription anytime, with no lock-ins. - Cost-Effective: Up to 70% more affordable than Carta. - Fast and Reliable Support: 100% responsive and dedicated to solving your needs. - Comprehensive Services: We handle $3 billion in client asset valuations monthly, onboard 400 companies every month, and currently serve over 20,000 entities on our platform. - Cap Table Audits: We’ll ensure your cap table is audit-ready and fully compliant.
If you’re interested in joining Eqvista, feel free to contact me directly at tom@eqvista.com.
We can onboard you now and you pay us once your Carta contract ends so you don’t have to pay for two platforms. We will migrate you for free - in 3 days!
Looking forward to helping more startups succeed!
Many thanks, and best of luck!
Tom - https://eqvista.com
lxgr | 1 comment | 2 weeks ago
Can’t be bothered to build a single-click cancellation button (which by the way is also a great regulation where it already exists)? Spend more time going through legally binding cancellations in your email and potentially retroactively refunding charges etc.
It should not be my problem if a website is clunky, does not work on my browser, is inaccessible from abroad (and I want to cancel now) etc. – email always works.
dogboat | 1 comment | 2 weeks ago
A UK direct debit is like this I think.
If this breaches contract then the service provider needs to get a lawyer.
The finance system should serve people first - and then tax and law follow. Obviously KYC AML excepted.
Such a system might knock 5% off the SP500 but we will live :)
lxgr | 1 comment | 2 weeks ago
It would be great to integrate a cancellation mechanism into the payment rails though, i.e. allow sending a proactive signal "your customer wants to cancel their service and next payment will fail". But that's definitely not the case for direct debits, currently.
ImPostingOnHN | 0 comments | 2 weeks ago
The company could just not apply the debit, and instead send their customer a friendly message like,
"Heya! We regret to inform you that your payment method on file failed. We'll try a few more times over the next month, and then your account will be suspended, with the data retained for download/export and/or in case the account is reinstated. If you have any questions, or would like to make alternative payment arrangements, please call [phone number] during [normal office hours], and one of our billing specialists will promptly help you out. Thank you!"
dogboat | 2 comments | 2 weeks ago
Big shout out to Plausible Analytics. You click unsubscribe and you are taken to Paddle (I think). One more click and you are done. You get a follow up email which you can reply to or not. You are done.
Anyway. Startups - use Airwallex or similar and create multiple cards. Easy to cancel anything. Then if they wanna chat in April 2025 about it then sure.
duskwuff | 2 comments | 2 weeks ago
dogboat | 2 comments | 2 weeks ago
Or make the recurring payments quarterly or annual.
Narkov | 1 comment | 2 weeks ago
gamblor956 | 0 comments | 2 weeks ago
There are no regulations governing the transition of cap table management, as generally this thing is handled by most companies internally by their Legal and/or Finance departments. It's just tech that felt the need to create software for something that can be done in Excel.
duskwuff | 1 comment | 2 weeks ago
dogboat | 0 comments | 2 weeks ago
They should still offboard of course!
They should design their service (as in customer service experience) to decouple cancellation from offboarding.
I cancel. I stop paying. Now do your offboarding process.
If that loses them too much money then ask for that upfront as effectively a retainer.
Now you go in to the relstionship eyes open. You pay 3 months upfront then you pay monthly. When you want to stop you click "unsubscribe" with a few are you sures.
Then you stop paying and they offboard you when they get their shit together. After cancellation and prior to that offboard meeting you are getting some bonus free subscription time.
If the offboarding dude is on paternity leave then treat it as extra free subscription as it is on the company not the customer.
Fighting to unsubscribe and chasing companies up sucks.
StressedDev | 1 comment | 2 weeks ago
duskwuff | 1 comment | 2 weeks ago
gamblor956 | 0 comments | 2 weeks ago
Cap tables at most companies (including nearly all publicly traded companies) are handled internally by the Legal department or Finance department. While they may or may not use software more advanced than Excel to manage the cap table, they generally don't put all of their eggs in one basket and rely on a third-party SaaS to do this critical work for them.
Pikamander2 | 0 comments | 2 weeks ago
Don't bother posting it there though, or the mods will remove it because "umm well actually it could have just been an honest mistake therefore it's not asshole design".
stanfordkid | 0 comments | 2 weeks ago
ibero | 0 comments | 2 weeks ago
noobermin | 0 comments | 2 weeks ago
kgeist | 0 comments | 2 weeks ago
benatkin | 0 comments | 2 weeks ago
tivert | 1 comment | 2 weeks ago
Oh come on. What rock did that guy crawl out from under? That's industry best practice, especially the speak to a human part.
reaperman | 0 comments | 2 weeks ago
jaynate | 0 comments | 2 weeks ago
blibble | 0 comments | 2 weeks ago
I'd pop a letter in the post: notice of termination in accordance with the contract
then if they charged my card after the notice period they'd get a chargeback
play stupid games, win stupid prizes