When Chase Carter partnered with Bitwise, he thought he would grow his app geared toward real estate agents.
Instead, he lost his job and lost control of his creation, Listing Alert.
Carter’s interest in real estate and technology led to an idea and what he saw as a multi-million dollar opportunity.
“That app was essentially to help agents close more business and do more deals,” Carter — a 32-year-old Coarsegold native and a real estate agent himself — told GV Wire.
To build the technology, he hired Bitwise (through its company Shift3) in 2018. Carter hustled around the country, “sleeping out of my car” while engaging in more than 100 meetings. He says he landed big-name clients such as Century 21 and Berkshire Hathaway.
Listing Alert was so successful, Bitwise wanted to partner with him to expand the company, he said. Carter and Bitwise formed a joint venture called JITRE, Inc. with Bitwise investing $2 million and owning 73%.
“They were going to help me get X amount of clients and we were going to package the company and turn around and sell the company together and wipe our hands clean of the company and do our own thing,” said Carter, who now lives in Tennessee.
Then the partnership fell apart.
In a lawsuit filed in Fresno County Superior Court in February, Carter said Bitwise muscled him out of the company he founded — weeks before he was due to increase his share in the joint venture.
Carter estimates Listing Alert is worth $120 million. The lawsuit is seeking $20 million in damages.
“The company/Board wouldn’t be able to comment on any pending litigation,” Bitwise spokeswoman Christine Beggan said.
Partnership Leads to Lawsuit
With the joint venture established in August 2020, Carter owned 24%, with an option to purchase an additional 20% out of Bitwise’s end. Carter’s grandfather Jack Carter — an initial investor — owned 3%.
Bitwise hired Carter as the business development manager for JITRE.
Nearly a year later — two weeks before his option to buy more into the company activated — Bitwise fired Carter, the lawsuit alleges.
“The reasoning for firing me was a difference of vision in terms of where the company was going,” Carter said Bitwise officials told him.
But, Carter said there was more to his dismissal.
He said “something fishy was going on” and he demanded financial documents. That, and the impending vesting option becoming due, were why he was fired, Carter says.
Bitwise not only locked Carter out of emails and access to the app, he said, but also cut his family from insurance. His wife was pregnant at the time.
The lawsuit alleges that Bitwise never paid Carter or his grandfather anything they were owed from the profits of the company.
“(The amount lost is) kind of hard to quantify because this business should be exploding. And it was until the founders of Bitwise found themselves in hot water and they’ve kind of just let Listing Alert lay dormant and it’s not doing anything,” said Nick Penner, who is Carter’s attorney.
Since Bitwise furloughed employees on May 29, clients are not being taken care of, Carter said. He’s worried that they will drop Listing Alert.
Penner says Bitwise has taken loans out on Listing Alert, using the company as collateral.
Why Make a Deal with Bitwise?
At the time he signed the deal, Carter said he had “minimal” legal advice, and trusted Bitwise’s attorneys would play fair.
“I didn’t have a lot of money,” Carter said.
Not receiving the financial documents raised red flags, but his partners wanted to continue. And there was also Bitwise’s positive reputation.
“Along with most of Fresno, I was enthralled by their mission and what they promised,” Carter said.
Carter was part of a Bitwise program through their tech training business, Geekwise. He was in the “founder’s cohort.”
“(It was) elegant, flashy, and nice. And I believed in what I saw and I hoped that they were going to at least respect me and do what they told me. And that was to help me build my business to what I envisioned it to be,” Carter said.
Carter says he owns the trademark to the brand name, but there really isn’t any intellectual property when it comes to the technology. He said it was “copy and paste.”
“Bitwise is elementary at best when it comes to development and what they were doing,” Carter said.
It may be tough to collect, given Bitwise’s recent financial implosion. Penner said they are “trying to figure out what the next steps are.”
“I learned a lot of lessons in all this,” Carter said. “But you’ll definitely be seeing me running a successful business again.”