This is Jessi. A few weeks ago, often Channel back Collaborator Lauren Smiley tells a story about the troubles that are coming to the venture capital firm founded by Mike Rothenberg. Immediately, we realized this has the potential to become an important press. Certainly, with just $ 50 million under management, the company then known as Rothenberg Ventures wasn’t the biggest player in the valley. But in the four years since the start of the business, Rothenberg’s has made more than 100 investments and established his company as a key advocate for virtual reality. In the process, he became a notable figure in the startup world, known for his flashy corporate networking events. He’s part of Silicon Valley and another part is “Silicon Valley,” the TV show.
But things didn’t go well for Rothenberg. This summer, his company ran out of money and is under federal supervision. At the end of August, Rothenberg dismissed nearly all of his employees (except lawyers) without pay, and he frequently faced confused investors. Very much at stake. At first, many Rothenberg investors felt they had been cheated. And at least three of his employees are suing him for wages.
This is troublesome for the industry we care about. BackchanneMy editors decided to skip scrutinizing events at Rothenberg’s company and the virtual reality studio he also founded, River Studios. I joined Lauren to report the story, and we spoke with more than two dozen former employees, limited partners, the investment firm CEO, and others who knew and worked with Rothenberg. We also spoke with Rothenberg, who spent a lot of time answering our questions, working with us in good faith to try to explain ourselves. Channel backThe entire editorial team was involved in creating the work, weighing the evidence behind every detail we chose to include.
As we have written in the result recordThe story of how Rothenberg built, almost demolished, and now hoping to save his startup is a moral one for this generation of Silicon Valley investors and entrepreneurs. Money is still cheap. Starting a company has become a business legend, in which everyone becomes billionaires. And it was the gifts that allowed Rothenberg to start his fund and make a name for himself in this crowded valley’s adventure scene – youth, Stanford and Harvard degrees, dense social networks and other famous event – may have set him up for failure.
Hours before our publication, I received word that Rothenberg had changed the company name to Frontier Tech Venture Capital, paving the way for possible management changes. The final chapter of this story has yet to be written, but we believe the essence of the Rothenberg character – and a sizable portion of the tech world circa 2016 – is well reflected in our work.
We hope you read it and take it into consideration.