Fraudulent Startup Founders

These fraudulent founders were once hailed as ‘the next Steve Jobs’ of their now-disgraced startups

Elizabeth Holmes

Repeatedly hailed as “the next Steve Jobs,” a label that was quickly replaced by more negative ones.

Total Funding: $1.1 billion

Holmes founded Theranos in 2003 at age 19 after dropping out of Stanford. Theranos was allegedly a revolutionary blood testing startup which claimed to run blood tests at a fraction of the cost and time, while only needing a tiny amount of patients’ blood.

By 2010, Theranos was valued at $1 billion and later had over $400 million in funding (the company would go on to be valued at $10 million).

Adam Neumann

In the run up to his departure, Neumann had conducted a series of shady business transactions with his coworking company.

Total Funding: $20.6 billion

Adam Neumann may not have committed massive fraud to get his company up and running, but he did practically run it into the ground before being ousted by his board of directors. Neumann stepped down in September 2019 just before WeWork’s parent company, The We Company, was supposed to go public.

Not only did Neumann cripple his company’s finances, but his company wasn’t profitable to begin with. In 2018 alone, WeWork lost $1.9 billion. It was a long way to fall for a company that was valued at $47 billion at its height.

Trevor Milton

His fall from grace came when the electric truck maker, Nikola, was exposed

Total Funding: $2.5 billion

Trevor Milton’s fall from grace came in September when the electric truck maker he founded, Nikola, was exposed by financial research company Hindenburg Research. Hindenburg’s report, which soon led to Milton’s ouster, was titled “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America” In it, they it was revealed that Nikola faked its tech, including having proprietary battery technology, natural gas wells, solar panels, and hydrogen production capabilities. To top it off, a promotional video of a Nikola truck driving in the Utah desert was later revealed to be a prototype being rolled down a hill to give the illusion of propulsion.

Milton’s accusations don’t stop at Nikola, however. He has two sexual assault allegations against him, both from women who were underage at the time. As for his self-described serial entrepreneurship, Milton leaves behind a history of failed startups and betrayed investors.

Danielle Fong

Even Bill Gates invested, her company never went commercial.

Total Funding: $70 million

Danielle Fong’s clean energy startup, LightSail, promised large-scale energy storage using compressed air, fixing an issue that many thought didn’t have a solution. Fong’s business concept was so promising that LightSail even raised money from Bill Gates, Peter Thiel’s Founders Fund, and Vinod Khosla’s VC firm.

Unfortunately, that energy storage system never came to be. Instead, all LightSail came up with was a set of gas storage tanks. The company never went commercial.

Adam Rogas

Ns8 billed itself as a fraud prevention and detection platform. In a bizarrely ironic twist, however, NS8’s CEO, Adam Rogas, turned out to be a fraud himself.

Total Funding: $157.9 million

Rogas faked financial documents to make it look as if his company had turned a handsome profit, in a bid to get more capital from investors. Rogas, whose main role at NS8 was to raise money, did it well — except once he raised it, he kept $17.5 million for himself. In September, the FBI, with the help of the SEC, made the fraud allegations, which resulted in Rogas’s arrest in Las Vegas, Nevada. He currently faces up to 45 years in prison for his misdeeds.

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