When the founder becomes the story – TechCrunch
A year ago, few knew about the Bolt brand, a payments technology company founded in 2014, nor its founder, Ryan Breslow, a seemingly archetypal Silicon Valley guy: smart, strong-willed, and a dropout who left Stanford after just two years. to start a business.
Fast forward to today and Bolt has suddenly become a company to watch, with Breslow catching the attention of journalists, investors and founders through a series of eye-popping statements starting last January.
The question is, is courting so much controversy in Bolt’s interest?
Breslow’s latest statement came on Monday, when he announced on Twitter that Bolt – which already gives employees more time to exercise their stock options than most companies – was offering every employee the ability to borrow money to the company to exercise its stock options. That “radicaland a possibly unprecedented proposal, Breslow explained, promised to give regular employees the same tax benefits for buying stock as senior executives. (Employees who buy their stock early theoretically reduce their exposure tax if the value of the stock continues to rise.)
Many founders applauded the move, including Harry Hurst, co-founder and co-CEO of Pipe, a fast-growing company that provides seed capital to businesses with recurring revenue streams. “Yeah, no brainer! We did this in 2020 and it was amazing. This is the right thing to do,” he tweeted.
But many others weighed in to suggest the idea was neither new nor sensible, suggesting such loans could put employees in dire financial straits if their company’s shares sink.
Jeff Richards, managing director of GGV Capital, was among them. Asked for a comment yesterday, Richards wrote to us in an email, “Usually I stay out of comments on Founder threads, but on this one I couldn’t stay silent. This is literally one of the worst advice you can give to other founders. So many of us have been through the nightmare scenario of trying to help employees with loans to deal with the inevitable downside, it’s just sad. More importantly, unlike Ryan’s tweet, it’s not “new”. Thousands of companies have done it. There’s a reason the good guys don’t do it anymore – it’s a really bad idea.
Vieje Piauwasdy, senior director of equity advisory at Secfi, agrees. Secfi is not impartial: it is a stock option finance company that provides non-recourse loans, in which it gives money to employees in advance in exchange for subsequent payment. But Piauwasdy, who has already spent five years at PriceWaterhouseCoopers, calls the type of loans Breslow offers “incredibly risky”.
“Hopefully Bolt will be successful,” Piauwasdy said. “Ryan wants Bolt to be an employee-friendly company. But you can’t predict the future, and if the stock ends up worth zero, you’ll still have to pay off that recourse loan in some way, shape, or form. of a form.
Breslow, 27, predicted in his tweets Monday that VCs “will say it’s a disaster,” but his pompous thread about stock loans for employees seems emblematic of other proposals he’s made. Just two weeks ago, in a yarn which also garnered both praise and disdain, he falsely accused payment company Stripe of controlling Y Combinator’s message board, said YC was unwilling to fund rivals of Stripe (it is) and called Lyft as a YC company (it was never part of the YC acceleration program).
Following the return of that tweet storm, Breslow resigned as CEO and became the company’s executive chairman, a move he said had been in the works for a long time.
Breslow clearly has a lot of skin in the game: He reportedly owns a 25% stake in Bolt, which closed last month with funding at an $11 billion valuation, including heavyweights such as BlackRock, General Atlantic and Willoughby Capital. But it’s hard to see how Breslow’s Twitter game contributes to his company’s reputation with customers and investors, who would have poured even more money into the company at a $14 billion valuation.
Breslow’s latest revelation was likely intended to attract job applicants in what is undeniably a very tough market, but it must also send confusing signals to potential recruits about who is really in charge when starting the checkout. (You have to wonder what signals this also sends to the company’s new CEO, former Amazon executive Maju Kuruvilla.)
We asked to speak to Breslow earlier this week and were told he was “off the grid” at the moment. Still, don’t look for Breslow to stop making news on Twitter. At the end of his tweets, Breslow — now among the nation’s youngest billionaires on paper — asks readers to follow him and says he’s committed to sharing “radical” ideas on how to build startups. Pinned to his profile, a tweet from February 9 highlights his mission.
It reads: “Last month was WILD. +50k subscribers in 30 days. For context: it took 8 years to reach 4,000 subscribers. The lesson: people appreciate it when you tell your truth.