The Billion-Dollar Unraveling Of The 'King' Of Silicon Valley

Forbes

Ryan Breslow rode his fintech unicorn Bolt to the bank. Then came the lawsuits and money squabbles — and a brutal valuation crash that wiped out much of his fortune.  Read the full story on Forbes: https://www.forbes.com/sites/sarahemerson/2024/03/11/the-billion-dollar-unraveling-of-ryan-breslow/?sh=10778141547e  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 Here's your Forbes Daily Briefing for Wednesday, March 13.

00:05 Today on Forbes, the billion-dollar unraveling of the king of Silicon Valley.

00:12 Ryan Breslow was dancing barefoot in a geodesic dome when his investors sued him last July.

00:19 An aggrieved shareholder was accusing Breslow, the once-billionaire founder of payments unicorn

00:24 Bolt, of draining millions of dollars from the company by defaulting on a personal loan

00:29 secured by its cash.

00:32 The lawsuit alleged that rather than liquidate his shares to cover the debt, Breslow had

00:36 allowed $30 million to be swept from Bolt's bank account.

00:40 And when three board members insisted he repay the company, he forced them out instead.

00:46 These problems were an ocean away in Ibiza, Spain, where Breslow was headlining a mindfulness

00:51 retreat centered around dance and "the pursuit of happiness."

00:56 But back home, the suit was among a host of legal battles, bitter money squabbles, and

01:01 shaky ventures that awaited him.

01:03 Over the past two years, Breslow has repeatedly attempted to use his Bolt equity to take out

01:09 large loans and has tried to expense seven-figure travel and security bills to Bolt after stepping

01:15 down as CEO.

01:16 This, according to internal documents, court filings, and interviews with more than a dozen

01:21 friends, advisors, and colleagues.

01:25 One of the companies Breslow co-founded after Bolt, an equity lending platform called Prism,

01:30 claimed in pitch materials first reported by the New York Times that he had taken out

01:34 a $100 million loan collateralized by his Bolt shares.

01:39 But Forbes has learned that the loan was never approved.

01:42 Three individuals with knowledge of the situation told Forbes that Bolt's board confronted Breslow

01:47 after learning of the loan attempt, saying the arrangement would be a violation of the

01:51 shareholder agreement.

01:53 A Prism investor deck viewed by Forbes listed Bolt as a "signed launch partner" alongside

02:00 Scale.ai, Flexport, and Brex.

02:04 Breslow declined to comment on the Prism loan and a detailed list of questions sent by Forbes

02:09 saying they contained "too much inaccuracy."

02:12 However, his October 2023 motion to dismiss a lawsuit filed by Connecticut-based venture

02:18 fund Activant, one of Bolt's earliest backers, confirmed the $30 million loan's existence

02:24 and terms, as well as his non-repayment at the time.

02:29 For years, Breslow has personified Silicon Valley success with an archetypal story—a

02:35 public school kid who dropped out of Stanford University to found Bolt, a one-click payments

02:40 company that became a venture capital darling and raised $1 billion in funding, earning

02:45 him a spot on Forbes' list of the world's youngest billionaires and a cover story.

02:51 During this time when he was riding high, Breslow took out a $30 million loan in November

02:55 2021 with unusual terms.

02:58 That is, if he were to default, Bolt would cover his obligations and could claw back

03:03 some of his shares as repayment.

03:06 By early 2022, Wall Street heavyweights like BlackRock and HIG Growth had lined up to back

03:12 a $355 million Series E funding round, valuing Bolt at $11 billion and Breslow's personal

03:19 stake at over $2 billion.

03:22 But instead of catapulting Bolt to new heights, the 2022 deal marked the start of a turbulent

03:27 18-month period for Breslow, pocked with acrimonious lawsuits and a showdown with venture fund

03:33 Activant.

03:34 In its July lawsuit, Activant alleged that after being told to reimburse Bolt for the

03:38 $30 million loan, "Breslow quickly moved to the nuclear option," forcing out board members

03:45 Steve Saraceno of Activant, Arjun Sethi of Tribe Capital, and Brian Reinkin of WestCap,

03:51 who had tried to compel him to make good on the debt.

03:54 Sethi, Tribe, Reinkin, and WestCap all declined to comment.

03:59 Breslow has called the Activant litigation "nothing more than sour grapes" over his "unfettered

04:05 right" to remove members of the board, stating in his dismissal motion that "he did not believe

04:11 that those directors were the best people to help support his vision for the continued

04:14 growth and success of Bolt."

04:16 Meanwhile, Bolt's value, which makes up the vast majority of Breslow's wealth, has crashed.

04:24 The company began buying back shares from investors and employees this January at a

04:28 97 percent markdown that suggests a valuation of around $300 million, three sources told

04:35 Forbes.

04:36 The offer, which has since ended, also required participants to release Bolt and its affiliates

04:41 from a broad set of claims.

04:44 At the time of the Series E round, Forbes reported that Breslow owned 22 percent of

04:48 Bolt.

04:49 At the valuation suggested by the tender offer, that stake would be worth an estimated $60

04:55 million.

04:56 For full coverage, check out Sarah Emerson's piece on Forbes.com.

05:03 This is Kieran Meadows from Forbes.

05:05 Thanks for tuning in.

05:06 [music]

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