According to a report from The Information, SEC is investigating Bolt CEO Ryan Breslow over the company’s statements to current and potential investors. Two (former) board members claim Breslow misled investors when he was raising Bolt’s $355 million Series E financing that valued the company at $11 billion in late 2021. But that was not the interesting part. The board members also alleged that Breslow, who has a controlling voting stake in the company and is executive chairman, directed Bolt in March 2023 to remove them from the board in a dispute over a $30 million personal loan to Breslow that the company guaranteed. Breslow had defaulted on the loan, which was made by JPMorgan. Breslow refused to sell the company stake over the default and JPMorgan took the $30M from Bolt’s bank reserve to settle the loan. Basically, the (former) board members were fired over how this $30M loan was handled as Breslow used his absolute voting control to enrich himself and put the company’s interest in the back burner.
WOW! What a shady founder. Silicon Valley worships charismatic founders like Breslow and when times are good, give them too much power that ultimately hurts corporate governance. It’s infuriating to see how this shady founder behaved but we can’t deny he was enabled by the FOMO investors. I bet by the time the case is settled, the enterprise value for Bolt will probably vanish into the thin air already. It’s a cautionary tale and a sign that startup land is in shambles. Though, new deals that are being done today probably won’t give the founder/CEO absolute voting control plus a ginormous personal loan. Investors are going back to being sensible as they always should be.
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