Insight #25 | Bolt Probed by SEC, Investors Over Statements Made During Fundraising

According to The Information, “The SEC subpoenaed e-commerce software startup Bolt and sent a notice to co-founder and former CEO Ryan Breslow last year over their past statements to current and potential investors, according to an April 2023 letter from a lawyer representing two of Bolt’s major investors.”

“The letter also alleged that Breslow, who has a controlling voting stake in the company and is executive chairman, directed Bolt in March 2023 to remove [two investor/board members] from the board in a dispute over a $30 million personal loan to Breslow that the company guaranteed. Breslow had defaulted on the loan, which was made by JPMorgan. A third investor, Activant Ventures, echoed many of those allegations in a suit filed this week in the Delaware Court of Chancery.”

Evan Epstein was quoted in this story:

“In this market, ‘you don’t have IPOs, there’s less M&A, valuations are lower, you essentially have to fight for better results,’ said Evan Epstein, the executive director of the Center for Business Law at UC Law San Francisco. As companies need to shut down or lay off workers, ‘there will be more boardroom battles and litigation between different types of investors and founders.’

Full story (subscription required): https://www.theinformation.com/articles/bolt-probed-by-sec-investors-over-statements-made-during-fundraising?rc=heuxl6