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

• Former employees say Carta has been fraught with discrimination and harassment.
• The company is embroiled in legal battles with former employees, many alleging retaliation.
• At the center of the turmoil is CEO Henry Ward, who multiple employees say demanded loyalty above all else.

Lisa Whittaker, a cap table management startup, relaunched the internal whistleblower-complaint system at Carta in August 2020. Whittaker was recently hired from the investment bank UBS to clean up Carta’s “toxic, boys club” culture. Within three months, the Integrity Counts portal had received over 58 complaints.

There was the case of a sales representative accused of exposing his genitals to coworkers during a company retreat in what one employee referred to as a “helicopter penis” motion. According to an Equal Employment Opportunity Commission complaint filed by former chief technical officer Jerry Talton, the same sales representative was also accused of groping a female employee. (The EEOC declined to investigate the allegations, and Talton’s lawyers declined to comment.)

Then there was DK, Carta’s head of business and the CEO’s longtime right-hand man. Andrea Lamari, a former Carta head of liquidity solutions, said he was known to take subordinates to Gold Club, a San Francisco strip joint. Kim was also accused of making one female employee cry, and of making comments about sucking on women’s breasts during a team dinner in Brazil, according to Talton’s complaint and an employee present at the time. Whittaker claims that at least 25 of the 58 complaints filed through the Integrity Counts system during her time at Carta were against Kim.

According to former employees, both men remained valued employees at Carta, with the sales representative even being promoted just weeks after the alleged “helicopter penis” incident. When contacted for comment, the sales representative denied the incident occurred.

Carta, formerly known as eShares, was founded in 2012 by CEO Henry Ward as a service for startups to digitize their paper stock certificates. Carta now assists startups in tracking their investors, employees in managing their equity awards, and venture capitalists in managing their funds. The company, which is backed by venture capitalists such as Andreessen Horowitz and Lightspeed Venture Partners, has become an important part of the startup ecosystem. It was estimated to be worth $8.5 billion in 2022. Throughout Carta’s history, Ward has outlined a vision of being a force for good in Silicon Valley, fighting for transparency and equality.

However, court documents, complaints filed with the EEOC and the California Civil Rights Department, and interviews with more than a dozen current and former employees paint a picture of a company riddled with harassment and discrimination, a lax approach to compliance, and a culture of blind loyalty to an erratic and vindictive CEO. According to one former employee who still owns shares in the company, the company has gone through rounds of layoffs, seen its foray into public markets fizzle, and seen its once eye-popping valuation more than cut in half on secondary markets. And there has been a mass exodus of high-profile executives, mostly women, many of whom claim to have been fired for opposing Ward.

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

Insider contacted over a hundred investors in the company, which recently raised a $500 million Series G in 2021, but they either did not respond or declined to comment. The only Carta board member who responded to Insider’s requests, Alex Kurland of Meritech Capital, 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, Ward discussed recent negative press coverage of Carta in a blog post published last Thursday, describing it as “sensationalized noise.”

‘It’s Henry or the highway.’

Ward is located in the heart of Carta. He set out from the start to shape Carta in his image. Ward required new hires to attend a full-day course in which he showed them YouTube videos of Peter Thiel and distributed 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. Internally, the practice was dubbed “American Idol,” with Ward playing Simon Cowell. Ward, who was known to attend meetings barefoot, decreed an office-wide no-shoes policy when Carta opened its first Palo Alto office.

While some of Ward’s mandates could be classified as “quirky startup founder,” those close to the CEO described him as mercurial and erratic.

One former employee, who asked to remain anonymous for fear of retaliation, recalled the 2017 Halloween Massacre, in which Ward unexpectedly laid off a large portion of the staff. According to the former employee, someone dressed as the Grim Reaper with Ward’s face attended an office Halloween party the following year.

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

Ward, according to former employees, valued loyalty above all else 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 claims she was fired for questioning Ward.

‘Women can be members of the boys club until they speak up about issues.’

Whittaker, who was hired as the head of corporate compliance, says it was clear from the start that she would have a difficult job: “When Ward first met with the new compliance team, the CEO went on a long rant about his deep hatred of lawyers,” she said. Ward, she claimed, resisted her team’s efforts to change the company culture at every turn in the months that followed.

Following a series of employee lawsuits and an external audit that found the company’s compliance programs lacking, Carta relaunched the whistleblower system as part of a larger effort to clean house.

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

The initiative, led by Whittaker and Carta’s then-chief legal officer, Suzanne Elovic, was supposed to include new insider trading and conflict of interest policies, additional employee training, and a more robust system for investigating complaints. Elovic did not respond.

As the concerns mounted, Whittaker and Elovic warned Ward that Carta’s proprietary stock-trading platform, CartaX, which was envisioned as a sort of New York Stock Exchange for private startups, might be violating insider-trading laws and FINRA regulations.

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

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

‘Henry’s Inner Circle’

Employees who raised concerns about Carta’s culture were sidelined or even fired, but 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 went on to say.

Take, for example, Jeff Perry, Carta’s chief revenue officer. An employee who worked under Perry and requested anonymity to avoid retaliation from Carta said they raised concerns with him about his salespeople cheating to boost their numbers.

Perry denied the allegations and later complained to the team about “whiny gossipers” in their midst who were “running to HR,” according to two former employees. According to the two people, one sales manager, JT Goodman, attempted to escalate the complaints but eventually quit in disgust, and Goodman became a frequent target of ridicule in sales meetings after he left. Goodman did not respond to an interview request.

Shortly after, despite being a top performer, the employee who raised the concerns received a negative performance review from Perry, resulting in them not receiving an equity award. Talton’s EEOC complaint mentions the same employee, who claims retaliation for raising concerns.

According to an employee who worked for Perry at the time, they wrote down 10 rules for navigating Carta’s sales culture in their journal. No. 1: “drink with the boys.” No. 5: “women can be in the boys club until they speak up about problems.” No. 8: “once you’re out of the club you can’t get back into the club no matter how much you drink” in the words of Jeff Perrry.

Perry has recently been the subject of two additional lawsuits. Allie Rogers, a sales manager, filed one, accusing Perry of sexual harassment and retaliation. In the lawsuit, Rogers claims that while she was waiting in line for the bathroom at a company event, Perry approached her and “slapped the top of her thigh, and grasped it in his hand.” She claims that he pushed her off and he “simply laughed it off and walked away.”

Rogers was promoted a few months later, and Perry became her boss. According to the complaint, Perry touched Rodgers’ leg under the table at a sales dinner a few weeks after the promotion.

According to the filing, she reported the incidents to HR and was chastised for “having her legs out.” She also claims that her requests to be transferred to a different team were denied and that no disciplinary action was taken against Perry.

Ward “began treating Ms. Rogers in an aggressive and demeaning manner during several meetings,” according to the lawsuit, and she was later told by a manager, Rachel Mayes, that she should adjust her attitude and that “Mr. Ward doesn’t like women with strong personalities.” Mayes suggested she apologize to him at the next team dinner. Rogers was let go less than two months later.

In a post on his blog, Ward stated that “Anybody that knows Jeff [Perry] knows the accusations against him are ridiculous. He is a good and moral person.” He went on to say 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 agreed to speak with Insider about the harassment allegations, but canceled minutes before the interview because Jeff Perry countersued her for defamation. Orrick Herrington & Sutcliffe, the same law firm that represented Carta in a recently settled gender discrimination lawsuit, is representing Perry.

In addition, the firm represented Kleiner Perkins in a high-profile discrimination lawsuit brought by former partner Ellen Pao.

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

Opposition from the top

Ward and Elovic were in a meeting when the CEO announced Perry’s promotion. Elovic immediately expressed his concerns. There were too many outstanding complaints against Perry, and she warned that if he was promoted, female executives would leave the company.

Ward dismissed her concerns. He elevated Perry. Elovic was fired the same day. Elovic refused to comment for this article.

Whittaker claims that after Elovic’s firing, she was advised by general counsel April Lindauer to soften her stance on compliance issues. “You need to pivot because Henry doesn’t care about this conduct stuff,” Whittaker remembered Lindauer telling her.

“I wasn’t going to pivot just because he didn’t believe in it,” she explained to 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.”

Whittaker discovered shortly after the conversation with Lindauer that HR had been directed to stop entering complaints into Integrity Counts. Whitaker claims she demanded that HR continue entering complaints so that they could be kept on file. Whittaker and two female members of her team were fired on the same day less than a week later.

Whittaker claims the official reason given was a reorganization, but she believes 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,” said Whittaker, adding, “it made me sick to my stomach every day I was there.”

Whittaker was not the only employee who raised concerns about Carta’s culture.

According to Jerry Talton’s EEOC complaint, he expressed his concerns about Ward to Lindauer and members of Carta’s board of directors, including Barbara Byrne, a former vice chairman of investment banking at Barclays and Lehman Brothers. Notably, Byrne was the first female vice chairman at both companies.

According to the complaint, Lindauer agreed that Ward’s behavior was a continuing issue, and Byrne stated that Ward had “a problem with women” and was unfit to be CEO. Talton also claims that around 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, and offered him a list of employees who wanted to raise concerns. According to the EEOC complaint, Osnoss turned down this offer.

According to Talton’s complaint, at the urging of Byrne, he wrote a letter to the full board condemning discrimination, harassment, and Ward’s behavior. Shortly after, he was placed on leave and eventually fired after it was discovered that he had secretly recorded conversations with executives and board members in which they disparaged Ward, recordings Carta is now attempting to suppress in court, according to legal documents.

Because of Carta’s reputation for ruthless legal tactics, nearly all of the former employees contacted by Insider expressed apprehension about speaking publicly about the company. Many of the employees who have publicly criticized Carta and Ward have found themselves embroiled in costly legal battles.

Rogers is now being sued for defamation. Heidi Johnson is being sued for breach of contract after raising concerns about at least 14 allegations of harassment and discrimination, according to the EEOC complaint. Carta went so far as to include his personal sexts and accuse Talton of sexual harassment in its complaint against him, which his EEOC complaint claims has harmed his reputation and made it difficult for him to find work. Johnson and Talton, who were fired after raising concerns about Ward with the company’s board, have recently filed complaints with the Montana Human Rights Bureau and the Equal Employment Opportunity Commission, respectively. Johnson’s attorneys declined to comment for this story.

Ward’s aggressive legal tactics are not out of character.

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