EDITORIAL

A Glimpse Of How Not To VC

Editor’s Morning Note: Mattermark Editorial is at Disrupt this morning, so we’re keeping this short. The story you had hoped would come out about Rothenberg Ventures is out.

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Backchannel recently published a long, detailed story about the rise, and fall of Rothenberg Ventures and its eponymous founder that is worth reading.

Quickly, Rothenberg Ventures was a venture capital firm that raised tens of millions of dollars — a moderate sum in the world of private capital — invested in a number of companies you know by name, and was then consumed in scandal.

TechCrunch, among others, has been on the beat since the unspooling began.

Since we are keeping our notes short today, let’s do this in three parts. We’ll quote, sigh, and then move on.

The Rise

How did Rothenberg Ventures afford its lavish spending on the back of its modest capital raise?

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Oh.

The Show

Where did the money go?

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The Fall 

And what happened in the end?

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None of this is to gloat; there were any number of people negatively impacted by the firm’s implosion. Some of them were people I know, I should add, and care quite a lot about.

That said, to see misconduct of this sort during a boom time is not without precedent. In fact, a maxim that I was taught — I forget where, sadly — was that an uptick in fraud and other similar activities is a pretty good sign of a market peak.

And here we are at all-time market highs. I doubt that we are not seeing a correlation.

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© Mattermark 2017. Sources: Mattermark Research, Crunchbase, AngelList.
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