The recent press
The recent press about Carta has been hard. For me, but more importantly for Carta employees. I have spent the last few weeks listening to a lot of the women at Carta and reflecting on the recent allegations and press. Below is what I’ve been thinking about.
I started my first company to work on the wealth inequality problem by building risk management software for retail investors. The idea came to me when I was working at an investment bank building portfolio management software for fixed income traders. The tools we built for the bank’s traders were far more sophisticated than anything regular investors had access to. I wanted to rebuild those tools and give them to everybody.
The company failed miserably, so in 2012 I started a new company called eShares, now Carta, as my second attempt at tackling wealth inequality. This time the idea was to democratize access to private companies by creating the Nasdaq for private markets.
I started with working on wealth inequality problems, but quickly expanded into problems around labor rights and compensation. It is hard to believe today, but in 2014 it was standard practice to provide employees only the number of options they would receive without any other information like last preferred price, fully diluted percentage, or even an exercise price. I realized many of the employees didn’t understand the equity they received. So I created A Better Offer Letter for our employees and published it in the hopes that more companies would become more transparent with their equity.
Around the same time, I began to see how wealth inequality wasn’t just a construct of capital markets, but was a consequence of modern labor compensation more broadly. So we refocused the company to change the paradigm of labor compensation from renting one’s time to building productive ownership. We called this Creating More Owners with the mission of narrowing the wealth inequality gap by moving employees from the debt stack of a company and onto the equity stack.
As Carta continued to grow, I grew too. In 2018 an employee sent me a link to a powerful piece about the intersection of wealth inequality and gender inequality in Silicon Valley. I read it and offered to help with our data. That was my first exposure to how large the gender inequality gap in tech really was. If learning is an onion and each peel a new level of understanding, this was my first peel into understanding just how systemic gender inequality is.
Since then we have been tackling gender inequality as aggressively as we had been tackling wealth and employee inequality. We published data studies in 2018 and 2019 showing industry gender inequality on cap tables. This year, along with data on gender, we will include data on race and ethnicity, and start capturing data on age and parental status to include in future studies.
This year we took $2M of the money we raised and started putting it directly in the hands of emerging GPs, specifically women and people of color, through our Carta Ventures LP investments. We can do more to promote change by putting our capital behind this next generation of GPs, and ultimately the founders they back.
We also worked internally to peel more layers of the onion. We studied our own cap table and learned that we had internal pay discrepancies. We published our results in the hopes of encouraging more companies to analyze the fairness of their cap tables. We learned that one of the most common reasons for gender discrepancies in pay is that women are less likely to negotiate their employment offers. So we removed negotiation from our recruiting process and replaced it with a First and Best Offer policy, which we also published.
We also learned that women (and employees in general) are often silenced through non-disparagement and release-of-claims clauses in severance termination agreements. So we removed those agreements, and all legal paperwork, from our employee departure process. Once again we published our policy in the hope that other companies would make changes to their practices.
This last example may sound silly, but we banned hard liquor from all company events because we learned that a hard-drinking culture not only creates environments for bad behavior, but can feel exclusionary to women, people with families, and people who don’t drink.
We also deserve criticism for our failures. I personally deserve criticism for not diversifying my board in the last two years. I came close twice but failed to finish. I recently kicked off a new board member search, my third attempt, and I hope I get it right this time. I also deserve criticism for only having one female exec for too long. Today 40% of my C-Level executives are women, but we only got there in the last year.
There are also likely mistakes we are making today that we don’t know are failures yet. Just like it is painfully obvious today that we should have collected race and ethnicity data over the last two years as a part of our cap table studies, there are things we are doing today that seem right now but we will look back on in three years with regret. That is the consequence of constantly peeling the onion.
The last couple of months have been an incredible opportunity for me to try to understand what it feels like to be a woman in tech. I’ve spoken one-on-one with women inside of Carta and out, just listening to their stories. I heard what it is like to have your idea dismissed in a meeting only to have a male colleague repeat the same idea and everyone take it seriously. I heard what it is like to be given administrative tasks by male colleagues that they think are beneath them. I heard what it is like to not see female executive leadership in your department and believe the deck is stacked against you.
Every woman in tech has the right to be skeptical when it comes to their pay, and probably should be. Gender pay inequality, especially with equity, is tragically common in technology. I know this because we have the data and studies that show it. In Emily’s case, she was paid fairly. In fact, she was paid more than the male Vice President she references in her lawsuit. She was the highest paid Vice President at Carta when she joined and the second highest paid Vice President when she left, but there is no way she could have known that. Across the industry compensation is so opaque and gender pay discrimination so ubiquitous that it makes sense for all women to question their pay.
Though I disagree with Emily’s portrayal of Carta, I wholeheartedly agree with her message: Gender inequality in pay and discrimination in the workplace is a huge and systemic problem, and we all need to do more to solve it.
The hardest part of the allegations for me, and for Carta employees, is the idea that the work we do at Carta is “smoke and mirrors”. That we are deceitful, espousing policies that we ignore internally and tricking the world with our rhetoric. That we don’t believe in what we say.
I want to be very clear on this. At Carta we relentlessly pursue what is right. We are ferociously earnest in building a fairer world, both inside our walls and out. Every day nearly 900 employees work at Carta to reduce inequality of all kinds, ranging from national policy initiatives like the Employee Shareholder Bill of Rights to local volunteer work like Carta Cares to educational seminars like How do I Teach My Employees About Equity. We are constantly peeling new layers, making mistakes, gaining new insights, overcoming setbacks, and enjoying successes. The problems we work on are messy and hard. Progress is not a straight line nor is it evenly distributed. We are imperfect and always will be. But we are never complacent, disingenuous, or dishonest. Our moral compass is unwavering and we tirelessly follow it.
It is a difficult time for women and people of color. There is a lack of leadership in equality, empathy, and compassion in the public sector and the private. In technology there is a leadership vacuum as those with wealth and power become wealthier and more powerful while those on the margin become more marginalized. This cycle has lasted for decades and will continue if we don’t fix it. And we can do more together than apart.