Carta's Shining Moment
Jason Kirby
4x Exits | Raised $100M+| Helping Founders w/ Capital Strategy | MD @ Thunder.vc | Podcast Host | Angel Investor
Fundraising Demystified: Issue #56
by Thunder
You can expect us to share a new weekly topic relevant to fundraising successfully!?
What's Below in Issue #56:
?? - A dive into Carta's response and building trust
?? - Data behind the perfect number of VC meetings to have
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Carta’s Quick Decision That Teaches How to Build Trust
Carta has been all over the news for an allegation by the founder of Linear that Carta started “doing cold outreach to our angel investors about selling Linear shares to their non-disclosed buyers.” Carta is the largest cap-table software company used by both startups and VCs to track investments.
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However, my interest is NOT around what happened, but the response Carta had to this newsbreak.
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Within a day, Carta’s CEO and co-founder, Henry Ward, created a post on Medium titled "Should Carta Facilitate Secondary Trading?”, which he answers:
“No. Not anymore. Because we have the data, if we are trading secondaries, people will always worry that we are using the data, even if we are not. So we have decided to prioritize trust, and exit the secondary trading business.”
For context, Carta had been planning to create a secondary market for startup shares since their first fundraising pitches to VCs. It was part of the plan when Carta was conceived. Yet, the CEO tossed it out the window within hours to maintain customer trust. While there are still many upset voices around Carta’s breach of trust, their actions spoke quite loudly, and most customers appreciated the fast and far-reaching response.
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Nothing is more valuable to a startup than building customers' trust and maintaining it. People make decisions about purchases when they see others using and benefiting from them as well. If others are unhappy, people will avoid it since there are usually enough alternatives. This is why people check reviews before purchasing a product.
Building trust for early-stage startups is difficult since people want others to have tried it first, and finding those early adopters is like finding a needle in the haystack – and even they need a level of trust.
So how can startups build trust with their potential customers?
Relevant Articles to Building Trust
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Data Corner
Focus on Quality, Not Quantity
DocSend conducted an elaborate study of thousands of decks to correlate the number of meetings with the amount of money raised.?It is NOT a numbers game. More meetings do not correlate with more money raised. It is more important to focus on pitching the right investors through the right channels than chasing the wrong ones. You save time and get results faster.
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1 年There's an unlimited way to have bad meetings, only a few to have ones that produce results. Focus and qualifying to fit within that focus is key!