Mortgage originator Better.com is one of the most buzzed-about startups, and was recently valued at $4 billion.
But CEO Vishal Garg is a volatile leader ensnared in a rash of lawsuits alleging financial mismanagement and worse, according to a new report.
Garg, 42, is accused of improper management of funds at several prior startups, including as much as “tens of millions of dollars,” Forbes reported. Some of the allegedly mismanaged money went to starting Better.com.
Founded in 2014, New York-based Better.com is trying to digitize home loans. Covid-19 has accelerated demand for its product, and since March, the company has hired 2,000 employees. It’s now on track to generate $800 million in revenue this year and is rumored to be eying an IPO.
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But Garg’s legal woes could present a challenge to a public offering. Goldman Sachs, which invested in Better.com, accused entities controlled by Garg of “flagrant self-dealing,” Forbes said. And while the bank dropped its legal claims in October, Garg is still facing accusations by PIMCO that startups he controlled siphoned off money owed to investors.
Meanwhile, Garg has been battling a former business partner and friend, Raza Khan, who claims Garg transferred $3 million from a joint business to his personal bank account, and used that money to launch Better.com. Garg denied the claim in a countersuit. But in a deposition, things grew so heated Garg threatened to burn Khan alive. Garg later apologized for letting his emotions get “out of control.”
A spokesperson for Better.com called the accusations “baseless,” and said “lawsuits are an unfortunate fact of life for successful startups and their CEOs.”
Former employees described a harsh work environment where Garg chastised managers who only worked eight-hour days. “You are TOO DAMN SLOW,” he wrote in an email that was obtained by Forbes. “You are a bunch of DUMB DOLPHINS and … DUMB DOLPHINS get caught in nets and eaten by sharks. SO STOP IT.”
[Forbes] — E.B. Solomont