At unicorn startup Carta, a culture of absolute fealty to an erratic and vindictive CEO, employees say

Then there was David Kim, known as DK, Carta’s head of business and the CEO’s longtime right-hand man. Andrea Lamari, a former head of liquidity solutions at Carta, said he was known to take subordinates on outings to Gold Club, a San Francisco strip club. Kim was also accused of making one female employee cry; another time, over a team dinner in Brazil, he made comments about sucking on women’s breasts, according to Talton’s complaint and an employee present for the exchange. Of the 58 complaints made through the Integrity Counts system while Whittaker was employed at Carta, she said at least 25 of them were against Kim.

Both men remained valued employees at Carta, with the sales representative even getting promoted just weeks after the alleged “helicopter penis” incident, according to former employees. When reached for comment, the sales representative denied that the incident took place.

CEO Henry Ward cofounded Carta, originally called eShares, in 2012 as a service for startups to digitize their paper stock certificates. Today Carta helps startups track their investors, employees manage their equity awards, and venture capitalists administer their funds. The company, which is backed by venture heavyweights like Andreessen Horowitz and Lightspeed, has become an essential part of the startup ecosystem. In 2022, it was said to be valued at $8.5 billion. Throughout Carta’s history, Ward laid out a vision of being a force for good, fighting for transparency and equality in Silicon Valley.

But court documents, complaints filed with the EEOC and the California Civil Rights Department, and interviews with more than a dozen current and former employees depict a company fraught with harassment and discrimination, a fast-and-loose approach to compliance, and a culture of absolute fealty to an erratic and vindictive CEO. The company has endured rounds of layoffs, seen its foray into public markets fizzle, and watched its once eye-popping valuation more than cut in half on secondary markets, according to one former employee who still holds shares in the company. And there’s been an exodus of high-profile executives, mostly women, many of whom say they were fired for standing up to Ward.

“Henry likes to present himself as this really progressive person,” Whittaker said, “and the reality is, it’s a total farce.” 

Insider reached out to more than a hundred investors in the company, which most recently raised a $500 million Series G in 2021, but either they didn’t respond or declined to comment. Alex Kurland of Meritech Capital, the only Carta board member who responded to Insider’s requests, declined to discuss the allegations, saying only that it was not his place to question management.

While Carta did not respond to a request for comment, in a blog post published last Thursday, Ward discussed recent negative press coverage of Carta, describing it as “sensationalized noise.” 

‘It’s Henry’s way or the highway’

At the center of Carta is Ward. From the beginning, he sought to craft Carta in his image. New hires were required to take a full-day course, taught by Ward, in which he showed them YouTube videos of Peter Thiel and passed out copies of “The Lean Startup” and “How To Win Friends and Influence People.” Later he instituted code-review sessions in which he grilled engineers in front of an audience. The practice was internally referred to as “American Idol,” with Ward as Simon Cowell. When Carta opened its first Palo Alto office, Ward, who was known to attend meetings barefoot, decreed an office-wide no-shoes policy. 

While some of Ward’s mandates could fall under the umbrella of “quirky startup founder,” those close to the CEO said he was also mercurial and erratic.

One former employee, who asked to remain anonymous fearing retribution, recalled an incident that became known internally as the 2017 Halloween Massacre in which Ward unexpectedly laid off a chunk of the staff. The following year, the former employee said, someone attended an office Halloween party dressed as the Grim Reaper with Ward’s face.

Then there was the time he fired his chief business officer and longtime right-hand man David Kim over a heated argument, only to ask him back a few years later, according to Talton’s EEOC complaint, legal filings, and multiple former employees.

Multiple former employees said Ward valued loyalty above all and was quick to anger when challenged. 

“It’s Henry’s way or the highway — that’s the nature of it — if you don’t agree with Henry, you are quickly pushed out,” said Lamari, the former head of liquidity solutions, who says she was forced out of the company for challenging Ward. 

‘Women can be in the boys club until they speak up about problems’

Whittaker, who was hired as the head of corporate compliance, says it became clear early on that she had her work cut out for her: When Ward first met with the new compliance team, the CEO went on a long rant about his deep hatred of lawyers, she said. In the ensuing months, she said, her team’s efforts to transform the company culture were resisted at every turn by Ward.

The relaunch of the whistleblower system was part of a broader effort to clean house at Carta following a series of employee lawsuits and an external audit that found the company’s compliance programs lacking. 

“I wanted people to know that if they did report something, it was going to be investigated, and that we took them seriously,” Whittaker told Insider.

The effort, spearheaded by Whittaker and Carta’s chief legal officer at the time, Suzanne Elovic, was supposed to include new policies on insider trading and conflict of interest, additional employee training, and a more robust system for investigating complaints. Elovic declined to comment.

As the concerns rolled in, Whittaker said, she and Elovic warned Ward that Carta might be breaking insider-trading laws and violating FINRA regulations with its proprietary stock-trading platform, CartaX, which was envisioned as a sort of New York Stock Exchange for private startups. 

They also attempted to implement conflict-of-interest policies to curtail the widespread habit of employees using customer data to start their own side businesses, and they raised concerns about sanctions violations when it was discovered that an Iranian company was using one of Carta’s products.

Whittaker said Ward dismissed their concerns and told them to “stop acting like such schoolmarms.”

‘Henry’s Inner Circle’

While employees who pointed out issues regarding Carta’s culture found themselves sidelined or even fired, those in the CEO’s good graces could count on protection from the top. “As long as you were in Henry’s inner circle, you were allowed to behave outlandishly,” Lamari said.

Take Jeff Perry, Carta’s chief revenue officer. An employee who worked under Perry and who asked to remain anonymous, fearing retribution from Carta, said they raised concerns with him that his salespeople had cheated to juice their numbers.

Perry dismissed the claims and later complained to the team about “whiny gossipers” in their midst who were “running to HR,” two former employees said. One sales manager, JT Goodman, attempted to escalate the complaints but eventually quit in disgust, the two people said, adding that Goodman became a frequent target of ridicule in sales meetings after he left. Goodman didn’t respond to a request for comment.

Shortly after, the employee who initially raised the concerns received a negative performance review from Perry despite being a top performer, which resulted in their not receiving an equity award. Talton’s EEOC complaint mentions the same employee, saying that they experienced retaliation for raising concerns.

An employee who worked for Perry at the time says they wrote down in their journal 10 rules for navigating Carta’s sales culture. Rule No. 1: “drink with the boys.” No. 4: “women can be in the boys club until they speak up about problems.” No. 9: “once you’re out of the club you can’t get back into the club no matter how much you drink” with Jeff Perrry.

More recently, Perry has become the subject of two additional lawsuits. A sales manager named Allie Rogers filed one accusing Perry of sexual harassment and retaliation. In the lawsuit filed in San Francisco Superior court, Rogers says that while she was in line for the bathroom at a company event Perry walked up to her and “slapped the top of her thigh, and grasped it in his hand.” She says in the suit that he pushed him off and he “simply laughed it off and walked away.”

A couple of months later, Rogers was promoted and Perry became her boss. The complaint says Perry placed his hand on Rodgers’ leg under the table at a sales dinner a few weeks after the promotion. 

The filing goes on to say she reported the incidents to HR and was admonished for “having her legs out.” She says her requests to be transferred to a different team were denied and no disciplinary action was taken against Perry. 

The lawsuit says that 10 days after Rogers filed her complaint, Ward “began treating Ms. Rogers in an aggressive and demeaning manner during several meetings.” Later she was told by a manager, Rachel Mayes, that she should adjust her attitude and that “Mr. Ward doesn’t like women with strong personalities,” the suit says. Mayes advised her to apologize to him during the next team dinner. Less than two months later, Rogers was laid off.

In his blog post, Ward wrote that “Anybody that knows Jeff [Perry] knows the accusations against him are ridiculous. He is a good and moral person.” He also asserted that “the accusation that I retaliated against Jeff’s accuser because she reported him to HR is equally ridiculous. I am not privy to HR investigations for exactly that reason. I didn’t learn about the accusation against Jeff until we got the financial demand letter from the accuser’s lawyer.”

Rogers had agreed to speak with Insider about the harassment allegations but canceled minutes before the interview was scheduled to take place after Jeff Perry countersued her, alleging defamation. Perry is being represented by Orrick Herrington & Sutcliffe, the same law firm that represented Carta in a recently settled gender-discrimination lawsuit.

The firm also represented the venture-capital firm Kleiner Perkins in a high-profile discrimination lawsuit brought by the former partner Ellen Pao.

The second lawsuit, filed by a former Carta employee named Amanda Sheets in San Francisco Superior Court, says that Perry denied her reasonable accommodations for her chronic migraines and then fired her for complaining about it. Carta issued an answer to the complaint denying all of Sheets’ claims. The trial for this case is set for May.

Pushback from the top

Ward and Elovic were in a meeting when the CEO announced his plans to promote Perry. Elovic immediately raised concerns. There were too many outstanding complaints against Perry, and female executives would leave the company if he was promoted, she warned.

Ward ignored her concerns. He promoted Perry. That same day, Elovic was fired. Elovic declined to comment for this story.

Whittaker says she was advised by the general counsel April Lindauer after Elovic’s firing to moderate her stance on compliance issues. “You need to pivot because Henry does not give a shit about this conduct stuff,” Whittaker recalled Lindauer telling her.

“I wasn’t going to just pivot because he didn’t believe in it,” she told Insider. “It’s what I was hired to do. I went in front of a town hall and promised women in the organization that I was going to continue to push.”

Shortly after the conversation with Lindauer, Whittaker found out that HR had been instructed to stop entering complaints into Integrity Counts. Whitaker says she demanded that HR continue entering complaints to make sure they were preserved for the record. Less than a week later, Whittaker and two female members of her team were fired on the same day.

The official reason given, Whittaker says, was a reorganization, but it feels clear to her that she and her colleagues were fired for committing the ultimate cardinal sin: standing up to Ward.

“Honestly, the day I got fired, I was thrilled,” Whittaker said, “it made me sick to my stomach every day I was there.”

Whittaker wasn’t the only employee who attempted to raise the alarm about Carta’s culture. 

Jerry Talton, in his EEOC complaint, says he brought his concerns about Ward to Lindauer and to members of Carta’s board, including Barbara Byrne, a former vice chairman of investment banking at Barclays and at Lehman Brothers. Notably, Byrne was the first woman to be named vice chairman at both firms.

The complaint says Lindauer agreed that Ward’s behavior was an ongoing problem and Byrne said Ward had “a problem with women” and was unfit to be CEO. Talton also writes in the complaint that at about the same time he met with Joe Osnoss of Silver Lake, who sits on the company’s board and led Carta’s most recent funding round, offering him a list of employees who wished to raise concerns. Osnoss rejected this offer, according to the EEOC complaint.

Talton’s complaint says that at the urging of Byrne, he wrote a letter to the full board calling out discrimination, harassment, and Ward’s behavior. Shortly after that he was placed on leave and ultimately fired when it was discovered he had made secret recordings of his conversation with executives and board members in which they disparaged Ward, recordings Carta is now going to court to suppress, according to legal documents.

Nearly all of the former employees contacted by Insider expressed a fear of speaking publicly about Carta because of the company’s reputation for scorched-earth legal tactics. Many of the employees who have spoken out publicly about Carta and Ward have found themselves embroiled in expensive legal battles.

Rogers is now facing a defamation countersuit. Heidi Johnson, who raised concerns about at least 14 allegations of harassment and discrimination, according to the EEOC complaint, is facing a breach-of-contract lawsuit. In its complaint against Talton, Carta went so far as to include his personal sexts and accuse him of sexual harassment, which his EEOC complaint says has damaged his reputation and made it difficult for him to find work. Johnson and Talton, who were both fired after raising concerns about Ward with the company’s board, recently filed complaints with the Montana Human Rights Bureau and the EEOC respectively. Lawyers for Johnson declined to comment for this story.

The aggressive legal tactics are not out of character for Ward.

“There are two types of CEOs,” Ward said in a podcast interview in 2018. “There are wartime CEOs and there are peacetime CEOs, and I am very much a wartime CEO.”