He did not have my permission and I do not support this financing.” Pournouri, a music producer and executive, was similarly irked.
Of the 13 investors named in Breslow’s email, only one, Oleg Tscheltzoff, would confirm that they had signed paperwork.
Breslow’s pitch to Bolt investors to back his return as CEO struck a sour note with those alarmed by the company’s stalled growth, wild spending, and an ultimatum to back the new round or risk having 70% of their investment wiped out.
One Bolt shareholder characterized the deal to Forbes as “either bad faith or extremely delusional or both.” In his email, Breslow offered a few concessions to investors.
That’s down from the $200 million Bolt said it was hoping to raise last week.
The company has also trimmed what it expects to raise from existing investors by a fifth to $20 million.
In a new set of financial documents shared with investors, Bolt proposed converting preference shares to a new share class stripped of investors rights as part of the round (again hinged on the backing of a majority of preferred shareholders).
Financial statements shared with investors and seen by Forbes last week showed that Bolt had made a $302 million loss on revenues of just $27 million in 2023.
The one-time billionaire continued to work as executive chairman of Bolt after stepping back as CEO in January 2022.
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Bolt founder Ryan Breslow thanked a group of investors on Monday morning for agreeing to a deal that would see him take over as CEO of the payments company. The company had announced plans in August to raise $450 million at an astounding $14 billion valuation.
He sent an email to shareholders saying, “I’m so grateful to announce the support of so many of our key stockholders for the Series F Financing round.” The email also listed “a few investors who have given us permission to share their names as supporters”: NJF Capital, Stack Capital, Streamlined Capital, Thirdbase Capital, Stonebridge, Montauk Ventures, Daniel Fine, Ash Pournouri, David Spencer, Oleg Tscheltzoff, Steve Ryan, Mike Krilivsky, and Bruno Werneck.
Arranging the endorsements of 13 willing shareholders to be publicly identified was a proud moment for Breslow, whose planned raise and reinstatement as CEO requires the majority approval of preferred shareholders — if only there was one small issue: some of them had not actually given their support.
I don’t know why Ryan included me in this. I do not approve of this financing, and he did not have my consent. “.
Investor Philip Krim in Bolt.
According to Forbes, Philip Krim, the creator of both Montauk Ventures and the mattress startup Casper, “has not and does not support the financing.”. “I don’t understand why Ryan included me. I do not support this financing, and he did not have my consent. “.
Pournouri was an executive and music producer who was equally irritated. He remarked, “I’m not sure why my name was shared in this manner and I haven’t signed anything yet.”.
Just one of the 13 investors Breslow mentioned in his email—Oleg Tscheltzoff—would attest to having signed legal documents. Forbes was told by Tscheltzoff, “I think none can run a company better than its founder.”. The other ten either did not reply to requests for comments or declined to say anything.
A flurry of mishaps and misunderstandings that have left investors perplexed and unable to understand the unconventional deal Breslow maintains will “lead Bolt back to the path of massive growth” has culminated in his apparent premature victory lap. “.
To summarize: Silverbear Capital, an investment bank registered in the Seychelles, which was listed as the lead investor, denied any involvement a few days after the $450 million round was announced. Not long afterward, a broker took ownership of their incorrect listing in the deal. The London Fund, the other lead investor in the round, then clarified, saying, “At no point have we stated that a transaction has concluded. Bolt is currently threatening to sue Silverbear in order to make it participate in the round.
Reporters Iain Martin at iain . martin@forbes . com and Sarah Emerson at semerson@forbes . com or 510-473-8820 on Signal are both available to hear from you with tips.
On Tuesday, the plan faced yet another roadblock when Hedosophia, Untitled Ventures, and BlackRock, the largest asset manager in the world, filed a restraining order request in Delaware’s Court of the Chancery to stop Bolt’s Series F. The same group had previously voiced objections to a proposed settlement involving Breslow, Bolt, and investor Activant Capital, which called for Activant to return approximately $36 million worth of shares to the company.
The three shareholders want the court to halt the fundraising before Tuesday’s signature deadline because they believe Bolt has not responded to their inquiries concerning the deal.
In a court filing, Cliff Gardner of Skadden Arps, who represents the investors, claimed that the company is coercing its investors by making them choose between losing the majority of their current investment or paying millions of dollars for new stock. According to their claims, Bolt’s board of directors has not given its approval for the Series F. They claimed that Breslow supported all sides of the proposed agreement.
Comments have not yet been received from Bolt, Blackrock, Hedosophia, or Untitled Ventures.
In the meanwhile, Bolt’s executives have reiterated the dire but generous outlook for the company. Interim CEO Justin Grooms wrote shareholders last Friday, saying, “We now have the opportunity to get everything back on track…and all the firepower we need to see our grandest ambitions through because of the extraordinary actions taken by management and our Board.”.
Alarmed by the company’s sluggish growth, extravagant spending, and threat to forfeit 70% of their investment if they didn’t support the latest round of funding, Breslow’s plea to Bolt investors to support his return as CEO struck a bitter note. According to a Bolt shareholder, the agreement was made in “either bad faith or extremely delusional or both.”. “.
Breslow made some concessions to investors in his email. If the deal’s lead investor doesn’t come through with the promised $100 million, the original threat of shares being bought back for just one cent is still on the table. Bolt stated last week that it hoped to raise $200 million, so that amount is less. Additionally, the company has reduced its projected amount from current investors by 5% to $20 million. Although The London Fund’s founder and CEO, Ashesh Shah, told Forbes that the company is still waiting for compliance “with our internal process,” Bolt continues to appear optimistic that it will receive $250 million in “marketing credits” from the fund. “.
However, if the $100 million investment does not come through, these new terms might mean that shareholders still lose out. Bolt suggested converting preference shares to a new share class devoid of investor rights as part of the round in a fresh set of financial documents that were made available to investors (again hinged on the backing of a majority of preferred shareholders).
Breslow also talked about his startup’s struggling performance. Bolt lost $302 million on revenues of only $27 million in 2023, according to financial documents obtained by Forbes last week and shared with investors. Breslow wrote in the letter, “It was nothing short of devastating to watch from the sidelines as the company I’ve poured my heart and soul into slowly lost its way.”.
After relinquishing his position as CEO of Bolt in January 2022, the former billionaire carried on in his role as executive chairman. Since then, after a legal battle with investors over a $30 million personal loan on his Bolt stock that he refused to repay, Breslow allegedly fired Bolt’s replacement CEO Maju Kuruvilla, instituted and then abandoned a four-day workweek at the startup, and dismissed five company directors in two separate boardroom spats.
Extra content from Forbes.
Forbes: “We Were Never In This Deal”: Bolt’s $450 million fund raise caught Ryan Breslow, the “lead investor,” off guard. Bolt threatens to take legal action against the main investor amid the $450 million raise. Forbes: “Bolt’s Former Billionaire Founder Is In Legal Trouble — Again”.
