Carta’s success narrative is being eclipsed by its mishap in stock trading

Carta’s decision to exit the secondary share trading business was a quick response to the controversy that emerged after it was chastised by customers for using private data to foster its equity transactions. The Exchange explores startups, markets and money. Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday. After a customer criticized Carta for working to connect buyers and sellers of startup shares on its secondary trading platform without permissions, there have been several questions regarding data security and just what — or who — its product is. Cloudflare’s CEO and co-founder, Matthew Prince, argued in the aftermath, for example, that the only way for Carta to “justify [its] multiple [and] valuation” was to pitch investors that it was going to build “the world’s biggest secondary market” predicated on the data it holds on behalf of its customers.

After facing backlash from clients for using private data to facilitate equity transactions, Carta has announced its departure from the secondary share trading business. This decision was a quick response to the controversy that emerged and raised questions about data security and the true purpose of Carta’s product.

The Exchange explores startups, markets and money.
Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

One customer’s criticism shed light on Carta’s role in connecting buyers and sellers of startup shares on its secondary trading platform without obtaining proper permissions. This sparked concerns about the security of data and the company’s intentions behind its actions. Cloudflare’s CEO and co-founder, Matthew Prince, even weighed in, suggesting that Carta may have exaggerated its value to investors by positioning itself as “the world’s biggest secondary market” based on the data it has access to through its customers.

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Ava Patel

Ava Patel is a cultural critic and commentator with a focus on literature and the arts. She is known for her thought-provoking essays and reviews, and has a talent for bringing new and diverse voices to the forefront of the cultural conversation.

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