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Speaker 1: Hey, everyone, it's a key. As we get to the

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Speaker 1: end of the year, we wanted to rebroadcast one of

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Speaker 1: our favorite episodes, a story about a young man called

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Speaker 1: Francisco Ordan. Francisco suspected his employer for breaking the law

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Speaker 1: and went on to secretly report that company to the government.

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Speaker 1: I recently sat down with Francisco to ask him about

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Speaker 1: what his life has been like since we first aired

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Speaker 1: that episode in May. For that conversation, stay tuned to

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Speaker 1: the end. Just over a year ago, Francisco Reordan was

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Speaker 1: a twenty seven year old software engineer, and he joined

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Speaker 1: a venture capital firm called Rothenburg Ventures. The company's founder,

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Speaker 1: Mike Rothenberg, was a young, charismatic Stanford University grad, and

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Speaker 1: he was known around Silicon Valley for throwing these extravagant parties.

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Speaker 1: Francisco had heard about his new employer's reputation, partly from

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Speaker 1: a skeptical story I wrote for Business This Week back

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Speaker 1: in At the time, Francisco didn't think much of it.

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Speaker 1: It made me think it was a little bit risky,

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Speaker 1: but um I still thought the company was making good

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Speaker 1: investments based on their portfolio, so I said brush those

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Speaker 1: concerns aside. And in retrospect, uh, I shouldn't have done that.

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Speaker 1: I shouldn't have done that. Francisco says this because soon

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Speaker 1: after he joined he started noticing some unusual things, things

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Speaker 1: that were raising his suspicions. The more he dug around,

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Speaker 1: the more he found. In just a few months in

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Speaker 1: he discovered something he thought was bad, maybe even against

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Speaker 1: the law, something that bothered him enough to take the

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Speaker 1: very serious step of secretly reporting it to government regulators. Yeah.

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Speaker 1: I mean, the internal debate was what will people think

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Speaker 1: of me for doing this? I felt, I'm pretty sure

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Speaker 1: it was the right thing to do, but you know,

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Speaker 1: I thought about what are the consequences to me personally?

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Speaker 1: By love the whistle. A week after Francisco filled out

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Speaker 1: an online form on the website of the SEC short

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Speaker 1: for the Securities and Exchange Commission, a lawyer from the

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Speaker 1: commission got in touch with him. From there, Francisco became

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Speaker 1: something of a double agent, providing the government information about

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Speaker 1: his employer. Francisco's actions set in motion a series of

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Speaker 1: events that ultimately brought down one of the venture capital

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Speaker 1: industries aspiring stars. In addition to being investigated by the

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Speaker 1: sec Rothenburg and his firm today is facing lawsuits from investors, creditors,

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Speaker 1: and former employees. Hi, I'm aki Ito and I'm Adam Satriano.

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Speaker 1: And this week on Decrypted, the whistleblower who secretly took

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Speaker 1: on an ambitious venture capitalist is coming out, revealing his

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Speaker 1: identity and publicly speaking out about his experiences for the

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Speaker 1: very first time. Francisco said he decided to speak to

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Speaker 1: us in part to encourage others to take action if

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Speaker 1: they're seeing bad behavior at their companies. In Silicon Valley,

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Speaker 1: where corporate governance sometimes takes a back seat to growing

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Speaker 1: fast and making a name for yourself, employees are serving

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Speaker 1: as one of the industry's toughest checks. So, Adam, you

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Speaker 1: wrote a story about Mike Rothenberg and his VC firm.

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Speaker 1: Back in the headline was telling Lee Silicon Valley's party animal.

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Speaker 1: Yes he did not like that. Yeah, Bet, give us

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Speaker 1: some background about the guy. What got me interested was

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Speaker 1: you had this young venture capitalist. He had raised a

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Speaker 1: decent amount of money, and I had also heard the

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Speaker 1: story that he had first introduced Mark Zuckerberg to Instagram's founder,

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Speaker 1: Kevin's instrom This was back when they or in their

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Speaker 1: college days. But more than anything. I had heard about

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Speaker 1: these events that he was throwing around San Francisco. Yeah,

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Speaker 1: can you give us an example. Well, my favorite was

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Speaker 1: these events that he had had that he called puppy Parties,

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Speaker 1: and they would rent out puppies that people could pet.

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Speaker 1: But there was this other one they did Quity called

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Speaker 1: founders Field Day, and this was at a T and

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Speaker 1: T park where the San Francisco Giants baseball team plays,

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Speaker 1: and he rented the whole thing out, outfitted it with

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Speaker 1: virtual reality boosts and other thing for entrepreneurs to come

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Speaker 1: and play with. Yeah, this is the thing that the

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Speaker 1: HBO show Silicon Valley ended up parodying, right. It was

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Speaker 1: this perfect example of all the absurdity and exuberance of

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Speaker 1: the startup lifestyle. Richard, after your perfect game at tech

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Speaker 1: Crunch Disrupt a few weeks ago, we fell in love

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Speaker 1: with you and your tech. Look. We know everyone in

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Speaker 1: the valley is after you, and we know that you're

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Speaker 1: probably going to go with Peter Gregory, but we'd love

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Speaker 1: to have you come play on our team. Let's stern

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Speaker 1: Teller Capital funding on your Series A financing, because together, Richard,

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Speaker 1: we'd be oh home run and Rothenberg really seemed like

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Speaker 1: a character from the show. When I interviewed him for

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Speaker 1: that story in I sometimes wondered if he was putting

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Speaker 1: me on. He has a real gift for hyperbole, even

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Speaker 1: by the lofty standards of Silicon Valley. Here's a clip

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Speaker 1: from a talkie gave its Stanford a few years ago,

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Speaker 1: and we want to talk a little bit aboutlue oceans.

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Speaker 1: So when you're in a blue ocean, it means that

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Speaker 1: it's kind of a new market. It hasn't fully developed,

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Speaker 1: and people are I'm not yet sure where it's gonna go,

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Speaker 1: but everybody wins because it's a blue ocean and everybody's

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Speaker 1: gathering the opportunities. And now back to red oceans. Rewind

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Speaker 1: what did you just say. In a blue ocean, everybody

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Speaker 1: can win. And the story we did wasn't a flattering profile.

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Speaker 1: That some former employees told me that Rothenberg made them

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Speaker 1: buy up all the week's issues of Business Week at

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Speaker 1: the airport so they wouldn't see him. But the firm

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Speaker 1: was doing just fine even after your story. Right. Yeah,

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Speaker 1: they aren't a big firm by any stretch, but they

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Speaker 1: were backing a lot of companies like the stock trading

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Speaker 1: app robin Hood, which is now valued at more than

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Speaker 1: a billion dollars, and it was with that backdrop that

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Speaker 1: Francisco joined Rothenburg Ventures to run their website and office

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Speaker 1: I T system. We recently visited Francisco at his one

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Speaker 1: bedroom apartment in one of San Francisco's residential neighborhoods. It's

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Speaker 1: in an old building built after the nineteen o six earthquake.

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Speaker 1: It's at the top of one of the city's many

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Speaker 1: large hills. Thanks, thanks, I thought, okay. He gave us

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Speaker 1: a quick tour. It's essentially a nerdy bachelor pad. There

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Speaker 1: was a big whiteboard on one side of the living room,

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Speaker 1: which I've seen in the bedrooms of some of my

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Speaker 1: other friends who are engineered is too. It's so that

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Speaker 1: they can write out their code by hand. Francisco so

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Speaker 1: had these three big computer monitors on his desk, plus

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Speaker 1: a few consoles to play his video games. And he

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Speaker 1: had these framed pictures of Apple's famous ad campaign dubbed

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Speaker 1: Think Different, featuring people like Picasso. His bedroom and his

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Speaker 1: kitchen were a little bit messy. Can I see what's

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Speaker 1: in your fridge? Oh, you're soilent drinker. For our listeners,

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Speaker 1: Soilent is a drink made out of these different nutritional powders,

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Speaker 1: and it's really popular with coders who don't want to

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Speaker 1: spend time eating real food. Anyway, that's all to say

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Speaker 1: that Francisco is a lot like other young engineers in

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Speaker 1: Silicon Valley. He went to Stanford and the first job

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Speaker 1: he took straight out of school ended up getting bought

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Speaker 1: by the tech giant Cisco, not to be confused with

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Speaker 1: the nickname that Francisco goes by. And then with that

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Speaker 1: small amount of money he ended up making from that acquisition,

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Speaker 1: he started his own company that was in exchange for

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Speaker 1: betting on the price of bitcoin. This kind of options

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Speaker 1: market for bitcoin turned out not to be compliant with

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Speaker 1: federal regulations, so the government sent him a letter to

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Speaker 1: shut it down, and he did not long after. In February,

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Speaker 1: Rothenberg Ventures hired Francisco. Rothenberg offered him a salary of

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Speaker 1: a hundred and thirty thousand dollars plus a thirty thousand

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Speaker 1: dollar bonus. And although he said the firm had scaled

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Speaker 1: back on some of those glitzier events, it still had

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Speaker 1: a luxury suite at the basketball arena where the Golden

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Speaker 1: State Warriors played. He went to the games and even

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Speaker 1: saw a Rihanna concert there once, all in the company's dime.

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Speaker 1: It was a sweet job for a young guy like Francisco,

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Speaker 1: but it didn't take him long to start to notice

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Speaker 1: some things. Well. The first red flag was actually my

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Speaker 1: first week on. The director of finance, who was also

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Speaker 1: the head of clients quit. She just ran out. I

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Speaker 1: didn't know why. Nobody explained it to me, but that

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Speaker 1: was the first red flag. Was it clear that something

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Speaker 1: was weird was going on? It was clear that something

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Speaker 1: weird was going on, but I didn't know what it was.

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Speaker 1: I thought it might have been something personal or um.

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Speaker 1: One of the things I suspected was that it was

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Speaker 1: just like too broy an environment. For Not long after,

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Speaker 1: Francisco said, there was another troubling incident. Uh, there's a

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Speaker 1: growing incident. Somebody on the investment team grow up to

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Speaker 1: an executive assistant. Um, I might get it up, putting

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Speaker 1: him on unpaid leave for a while, and then um,

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Speaker 1: he came back shortly before everyone was put on you know,

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Speaker 1: let's out basically where it was it? Where did this happen?

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Speaker 1: Just at the office at a party? It was a yeah, party.

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Speaker 1: It was actually Mike's birthday. Everyone went out to a

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Speaker 1: bar tonic un poll and lots of shots. UM. The

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Speaker 1: growing thing happened kind of ruin the night. So that

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Speaker 1: so there's some really red flags. But so you hit

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Speaker 1: your it got your suspicion zone. But then you're still

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Speaker 1: learning things. What else were you learning? Yeah, so I

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Speaker 1: had my initial suspicions. UM, A whole theme throughout everything

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Speaker 1: was just ridiculous spending UM any online sports suites UM.

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Speaker 1: And then I had some additional suspicions UM the whole time.

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Speaker 1: River STUDIOSUM was in the same building. But Mike never

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Speaker 1: really explained the funding situation. Let me explain a little bit.

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Speaker 1: In addition to Rothenberg Ventures the VC firm, Mike has

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Speaker 1: also set up another business, a production company called River

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Speaker 1: Studios that made virtual reality videos, and he set up

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Speaker 1: another business on top of that called River Enterprises, which

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Speaker 1: was another way of investing in companies. Francisco says Mike

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Speaker 1: own a major interest in these new businesses. They were

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Speaker 1: supposed to be separate from the venture capital firm that

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Speaker 1: Francisco worked for, which was managing other people's money, but

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Speaker 1: Francisco was being regularly asked to do work for the

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Speaker 1: other businesses, and that made him uncomfortable because he was

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Speaker 1: supposed to work for just the VC fund. I felt

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Speaker 1: like I'd been do by Mike. I felt like, you know,

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Speaker 1: I came in to build the sell people at all,

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Speaker 1: to make things easier for the LPs. It turned out

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Speaker 1: he was actually using it, as you know, a way

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Speaker 1: to mislead the LPs. Like one of the one of

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Speaker 1: the things that it was used for, it was sending

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Speaker 1: out nass emails with notifications about the annual reports. And

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Speaker 1: these feral reports didn't tell the whole story. He left

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Speaker 1: out big things. Francisco had access to the company's I

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Speaker 1: T system, so he started doing some sleuthing. In a minute,

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Speaker 1: we'll find out what he discovered. Before the break, Francisco

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Speaker 1: had started noticing some things that made him suspicious of

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Speaker 1: the venture capital firm he just joined, and he started

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Speaker 1: poking around on top of the lavish spending. Francisco would

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Speaker 1: later discover internal documents that showed that the management fees

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Speaker 1: the VC firm had collected from its investors. So this

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Speaker 1: is the money specifically intended for operating the fund was

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Speaker 1: actually being used by the Virtual reality companies that Rothenburg

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Speaker 1: was funding. Instead, I kept escalating and escalating UM. Also,

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Speaker 1: because I made the LP portal, I I was asked

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Speaker 1: to upload annual reports, so I look at those, and

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Speaker 1: I'd see that these companies weren't disclosed them like there's

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Speaker 1: zero mentioned or River Enterprises in any of the annual

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Speaker 1: reports UM zero. I mentioned a River Studios and annual

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Speaker 1: reports UM Also, so that you were concerned that investors

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Speaker 1: didn't even know that they were in sort of indirectly

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Speaker 1: at least funding some of these other activities exactly. Most

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Speaker 1: people shrugged off what they were seeing at Rothenberg Ventures.

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Speaker 1: I spoke with Warmer employees who said that even though

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Speaker 1: that they had felt uncomfortable, nobody thought to step forward.

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Speaker 1: And it might sound like Francisco's nitpicking these tiny technical

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Speaker 1: details here, but I ran it by Andrew Touch, a

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Speaker 1: professor specializing in financial regulation at Washington University School Law,

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Speaker 1: and he said, this sounds like a case of self dealing,

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Speaker 1: which is when a person who's supposed to be looking

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Speaker 1: out for the interests of investors instead takes advantage of

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Speaker 1: his position to benefit him or herself. Apparently, the courts

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Speaker 1: are pretty strict about this, Andrew said, this fiduciary duty

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Speaker 1: is the bedrack of finance of maintaining the trust between

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Speaker 1: companies and their investors. At the time that Francisco didn't

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Speaker 1: get the benefit of that expert guidance, but he still

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Speaker 1: felt strongly that it was worth talking to the SEC.

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Speaker 1: He'd read up on the responsibility that a fund like

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Speaker 1: Rothenberg Ventures has two investors who have given it money.

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Speaker 1: He felt it could be fraud if Rothenberg wasn't using

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Speaker 1: the money in a way that he had told investors

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Speaker 1: it would be used. Once he made up his mind,

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Speaker 1: Francisco went to the agency's website SEC dot go slash whistleblower,

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Speaker 1: where there's a form to submit tips. It's a simple

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Speaker 1: questionnaire where you describe the complaint and give the government

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Speaker 1: some information about yourself, and there's a way to upload documents.

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Speaker 1: In the complaint, he listed examples of how he felt

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Speaker 1: funds were being misused. So I submitted the forum. About

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Speaker 1: a week later, I got an email from the staff

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Speaker 1: attorney there. She asked me to go in. I went

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Speaker 1: in for one meeting at their San Francisco office, um

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Speaker 1: we talked about the forum. She had a print out

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Speaker 1: of the website which had everybody's picture on it, So

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Speaker 1: we spent some time talking about each employee, what their

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Speaker 1: role was. It was, you know, like a nice office

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Speaker 1: building on Montgomery Street. It was just the two of

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Speaker 1: us in that conference room for that meeting, and then

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Speaker 1: later on in subsequent meetings or more people. Francisco had

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Speaker 1: a lot writing on this. He knew that coming forward

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Speaker 1: could cost him his job. If the sc C decided

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Speaker 1: to do nothing against Rothenburg would still be worth it.

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Speaker 1: Did you think that they could? You would be damaging

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Speaker 1: your career in your future. Yeah, I knew that to

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Speaker 1: some extent. I would be damaging my career. Why do

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Speaker 1: you say that. I'm just so sure that it was

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Speaker 1: the right thing to do that, you know, Uh, it

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Speaker 1: was worth that price that I'd have to pay. After

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Speaker 1: that first meeting with the SEC, Francisco went back to

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Speaker 1: work like nothing was different. He began to live this

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Speaker 1: somewhat double life. While working like normal, He was also

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Speaker 1: corresponding with SEC, sharing documents with them. Another information about Rothenberg.

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Speaker 1: Getting access to these documents wasn't difficult. Francisco was in

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Speaker 1: charge of I T at Rothenberg Ventures, so he had

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Speaker 1: access to all kinds of things that others didn't like,

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Speaker 1: financial reports, email logs, and investor information. He'd copy them

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Speaker 1: onto a thumb drive and then send them to the

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Speaker 1: SEC via E Neil later from his house. Did you

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Speaker 1: feel paranoying a little bit? Yeah, but I just didn't

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Speaker 1: mention it to anybody, and um, I didn't feel that different.

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Speaker 1: This double life didn't go on for long. A big

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Speaker 1: turning point came just a few days later when he

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Speaker 1: told the SEC that Rothenburg Ventures was making some changes

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Speaker 1: to its I T systems and some of the email

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Speaker 1: accounts were being deleted. This was in July of last year,

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Speaker 1: soon after the SEC sent an order to Rothenberg Ventures

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Speaker 1: telling them to not delete any records. It was the

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Speaker 1: first time that the firm knew it was in the

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Speaker 1: SEC's cross hairs. And then Francisco got a message to

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Speaker 1: come to a meeting with two senior executives at the firm.

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Speaker 1: Mike Rothenberg wasn't there. I was doing my work and

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Speaker 1: then one of them sent me a text message and

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Speaker 1: he said that he had an I T problem that

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Speaker 1: he needed help with, so could I make sure I

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Speaker 1: was in the office and minutes and I said yeah, sure,

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Speaker 1: And then I think about half an hour went by,

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Speaker 1: and then he came by and got me. I was

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Speaker 1: sitting sitting out of couch in the main office there,

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Speaker 1: and then he took me um into what was really

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Speaker 1: Mike's office, but Mike wasn't in the office that day,

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Speaker 1: just a small office by itself. Off that man rum

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Speaker 1: and what happened? So his first question, UM was he said, UM,

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Speaker 1: so we've noticed that you've been doing some government related searches.

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Speaker 1: And I didn't say anything to that. And then he

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Speaker 1: said did anybody tell you to do that? And I said,

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Speaker 1: I'm not going to answer that question. And then he said,

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Speaker 1: well you're terminated effective immediately, um, and then long awkward pause,

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Speaker 1: and then he said do you have anything to say?

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Speaker 1: And I said, um, I have some personal litems to

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Speaker 1: my desk actually grab and then he had started me

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Speaker 1: to get that stuff and then out of the building.

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Speaker 1: How did you feel after that? Where you said, did

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Speaker 1: you cry? Were you angry? Whom he wouldn't I was.

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Speaker 1: I was angry, like my my heart was founding. Um,

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Speaker 1: it's mainly angry. Why were you angry? That was unfair?

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Speaker 1: Like you can't terminate it's a blur like that. Um,

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Speaker 1: and this was immediately after they got a document particivation

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Speaker 1: order from the SEC. That's probably what that's probably that's

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Speaker 1: why they're suspicious. Yeah. The SEC has declined to comment

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Speaker 1: about the case, but tech Crunch reported Rothenberg Ventures as

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Speaker 1: being investigated for wire fraud, bank fraud, and breach of

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Speaker 1: fiduciary duty in law suits from investors and employees. It's

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Speaker 1: been alleged that Mike Rothenberg used money intended for the

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Speaker 1: startups for his own benefit to support his own lifestyle,

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Speaker 1: and Francisco learned from emails he had downloaded from the

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Speaker 1: firm that at one point Mike Rothenberg was paying himself

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Speaker 1: about one million dollars, which is a huge amount for

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Speaker 1: a relatively small firm. But Rothenberg was also struggling to

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Speaker 1: man it's it all last year, Rothenberg needed to provide

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Speaker 1: documents and tax information and some return on investment to investors,

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Speaker 1: and according to Francisco and some media reports, the money

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Speaker 1: wasn't there. Okay, so this is a little bit complicated,

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Speaker 1: but stick with us. The records show that River Studios,

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Speaker 1: which if you remember, is one of the virtual reality

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Speaker 1: businesses founded by Mike Rothenberg. This started perceived two million

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Speaker 1: dollars from an investor. The same day, River Studios transferred

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Speaker 1: one point seven million dollars to Mike Rothenberg's personal account.

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Speaker 1: Also on that same day, Mike Rothenberg transferred once again

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Speaker 1: one point seven million dollars from his own account to

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Speaker 1: the Rothenberg Ventures account. According to Francisco, that gave Rothenberg

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Speaker 1: Ventures the money to meet the deadline of the other investors.

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Speaker 1: By the way, that investor who wired the two million

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Speaker 1: has now sued Rothenberg. The lawsuit alleges that Rothenburg co

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Speaker 1: mingled the bank accounts of his various entities, essentially treating

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Speaker 1: the accounts of those businesses as as personal accounts. By

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Speaker 1: the second half of last year, employees quit in mass

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Speaker 1: and a class action lawsuit is working its way through

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Speaker 1: the courts. It alleges that staffers weren't paid. Another former

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Speaker 1: employee has sued for more than a hundred thousand dollars

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Speaker 1: that alleges Rothenberg didn't repay for business charges that have

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00:20:35,200 --> 00:20:38,600
Speaker 1: been put on a credit card. American Express is also

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00:20:38,720 --> 00:20:43,520
Speaker 1: sued for unpaid charges. I knew Mike Rothenberg a touch

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Speaker 1: when I did that story back in so I reached

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Speaker 1: out to him about Francisco and to get his side

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Speaker 1: of the story. He didn't respond, but a person who

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00:20:52,080 --> 00:20:55,040
Speaker 1: works for a New York PR firm that specializes in

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Speaker 1: crisis management and image rehabilitation reached out. He told me

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Speaker 1: my wouldn't be available for an interview given the ongoing

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Speaker 1: investigations in lawsuits Adam. Did the spokesman comment at all

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Speaker 1: about Francisco or the allegations made by him and in

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Speaker 1: the lawsuits. He disputed Francisco's allegation that he was fired

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Speaker 1: for speaking with SEC. He said that Francisco had already

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Speaker 1: given notice that he was leaving. Francisco says this is

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00:21:22,560 --> 00:21:26,640
Speaker 1: not true. The spokesman also pointed out that Francisco had

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00:21:26,680 --> 00:21:30,040
Speaker 1: this run in with authorities for the bitcoin exchange. He

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00:21:30,080 --> 00:21:33,679
Speaker 1: was implying that undermines his credibility. But what about the

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00:21:33,840 --> 00:21:38,480
Speaker 1: core allegations about misusing money. The spokesman declined to comment

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Speaker 1: about the specifics, but Rothenberg did post a Facebook live

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Speaker 1: video earlier this year to explain. So one of the

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Speaker 1: things that I just wanna answer head on which I

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Speaker 1: which I have done to the press, but they have

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Speaker 1: not published it, and I want to be sure I'm

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Speaker 1: very clear about this. Is the question I've had is

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Speaker 1: you know, have you taken any money and properly and

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Speaker 1: answers know? And I've said that before and and uh,

359
00:22:02,960 --> 00:22:05,359
Speaker 1: it continues to that message continues to knock it out

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00:22:05,400 --> 00:22:07,399
Speaker 1: there as clearly as it should. And another one is

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00:22:07,440 --> 00:22:10,520
Speaker 1: that have we made any investments without investor permission? We haven't.

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Speaker 1: We have not made any investments without investor permission. For

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00:22:14,359 --> 00:22:17,240
Speaker 1: those kinds of rumors going quickly, there has to be

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00:22:17,320 --> 00:22:20,680
Speaker 1: very responsible reporting, and um, there has to be fair

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00:22:20,720 --> 00:22:24,320
Speaker 1: and balance reporting, and there's a very big um, there's

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Speaker 1: a very big weight on the shoulders of reporters because

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Speaker 1: those um that particular group of people. The video goes on,

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Speaker 1: and in it, he spends a lot of time blaming

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Speaker 1: the media for bias coverage. Adam, you spoke to a

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Speaker 1: few professors to better understand what kind of trouble that

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Speaker 1: Mike Rothenberg and his firm might be in what I

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Speaker 1: learned is the SEC has been pretty vigilant in protecting whistleblowers,

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Speaker 1: including bringing actions against those who retaliate. So that means

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Speaker 1: it will be pretty difficult for Rothenberg to come after

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Speaker 1: Francisco for going to the SEC. Yeah, and I also

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00:22:58,400 --> 00:23:01,320
Speaker 1: learned that Rothenberg could be in hot water, especially for

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00:23:01,359 --> 00:23:04,840
Speaker 1: what appears to be mismanagement of funds. Like we talked

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00:23:04,840 --> 00:23:08,240
Speaker 1: about earlier, fidiciary duty is the bedrock of finance. It's

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00:23:08,280 --> 00:23:11,679
Speaker 1: that trust between an investor and a person like Rothenberg

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Speaker 1: who's investing that money on their behalf. Do you think

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Speaker 1: there's a risk of jail time here? People I spoke

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00:23:17,600 --> 00:23:20,879
Speaker 1: with didn't think so, but there's definitely a possibility of

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Speaker 1: financial penalties. And even beyond that, Mike Rothenberg's reputations and tatters.

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Speaker 1: Now that's right, and Rothenberg was this really ambitious venture capitalist,

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Speaker 1: but now that the firm is a bare bone staff

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Speaker 1: and the reputation has really been hurt. In addition to

387
00:23:40,680 --> 00:23:45,280
Speaker 1: speaking with the SEC, Francisco also began communicating with a

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Speaker 1: few journalists about what he'd been finding at Rothenberg, under

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Speaker 1: the condition that they wouldn't name him. At that point,

390
00:23:52,800 --> 00:23:55,760
Speaker 1: while the firm's big spending and lavish events were well known,

391
00:23:56,080 --> 00:23:59,600
Speaker 1: the internal turmoil had been largely kept under wraps. But

392
00:23:59,640 --> 00:24:02,560
Speaker 1: in the months after that, several very tough stories came

393
00:24:02,600 --> 00:24:07,840
Speaker 1: out chronicling Rothenberg's questionable management of funds. Francisco says that

394
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Speaker 1: he never regretted the decisions he made, but it did

395
00:24:11,240 --> 00:24:14,439
Speaker 1: take a toll. After he says he was fired, he

396
00:24:14,520 --> 00:24:17,080
Speaker 1: made a last minute decision to join some friends going

397
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Speaker 1: on a seven day hike in Sweden. On the walks,

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Speaker 1: he talked about the ordeal with Justin Chen, a friend

399
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Speaker 1: who's also a software engineer. It's sort of that I

400
00:24:26,840 --> 00:24:30,480
Speaker 1: realized that, oh, he wants to leave this city because

401
00:24:30,480 --> 00:24:34,439
Speaker 1: he's worried about this, this place he was working at

402
00:24:34,440 --> 00:24:38,679
Speaker 1: where he was terminated. Uh, I got the sense he

403
00:24:38,800 --> 00:24:41,840
Speaker 1: was worried about it about like Mike Rothenberg coming after

404
00:24:41,920 --> 00:24:45,560
Speaker 1: him personally for a while, like physically. Justin says that

405
00:24:45,600 --> 00:24:48,480
Speaker 1: even though this hasn't been easy for Francisco, he's in

406
00:24:48,520 --> 00:24:52,000
Speaker 1: a much better position than most software engineering jobs are

407
00:24:52,000 --> 00:24:54,880
Speaker 1: in big demand, and he'll likely have an easier time

408
00:24:54,960 --> 00:24:58,919
Speaker 1: finding another job than somebody else might. At Francisco's apartment,

409
00:24:58,960 --> 00:25:02,320
Speaker 1: there's a messy bookshel off with some tea packets, notebooks,

410
00:25:02,440 --> 00:25:05,439
Speaker 1: a few fantasy books, and on the top shelf we

411
00:25:05,520 --> 00:25:09,040
Speaker 1: found one called The Whistleblowers Handbook, A step by step

412
00:25:09,119 --> 00:25:13,280
Speaker 1: guide to doing what's right and protecting yourself. Francisco said

413
00:25:13,280 --> 00:25:15,880
Speaker 1: that he actually found the book only after he had

414
00:25:15,920 --> 00:25:19,520
Speaker 1: gone through this whole experience of being a whistleblower himself,

415
00:25:20,160 --> 00:25:21,879
Speaker 1: and he said he wished that he had read the

416
00:25:21,920 --> 00:25:26,439
Speaker 1: book before approaching the SEC. Now he thinks more people

417
00:25:26,480 --> 00:25:29,720
Speaker 1: will be coming forward in Silicon Valley. He says he

418
00:25:29,800 --> 00:25:33,000
Speaker 1: hopes to inspire others to step up. Part it's a

419
00:25:33,000 --> 00:25:35,480
Speaker 1: critical mass thing. Once you have a few of those

420
00:25:35,480 --> 00:25:37,639
Speaker 1: stories out there, it's easier for more people to do it.

421
00:25:38,640 --> 00:25:41,320
Speaker 1: And then also I think that people are getting more

422
00:25:41,520 --> 00:25:45,919
Speaker 1: fed up with the streatment. Like I feel like Silicon

423
00:25:46,000 --> 00:25:48,000
Speaker 1: Valley is more unethical now than it was a few

424
00:25:48,040 --> 00:25:51,400
Speaker 1: years ago. People are responding to that, and what why

425
00:25:51,480 --> 00:25:54,959
Speaker 1: why do you think that? Um? I feel like just

426
00:25:55,000 --> 00:25:59,440
Speaker 1: because Silting Valley's doing so well, it's attracting more more

427
00:25:59,480 --> 00:26:02,400
Speaker 1: bad people. He wouldn't have come here ten twenty years ago.

428
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Speaker 1: People who were in it for the money, people in

429
00:26:04,920 --> 00:26:07,680
Speaker 1: it for the easy money. Yeah. Francisco is now eight

430
00:26:07,800 --> 00:26:10,880
Speaker 1: and he's working on a startup idea and email security

431
00:26:10,920 --> 00:26:14,320
Speaker 1: program for businesses. He continues to work with the SEC

432
00:26:14,600 --> 00:26:16,720
Speaker 1: and says he's available to be a witness in any

433
00:26:16,760 --> 00:26:20,320
Speaker 1: of the lawsuits pending against Rothenburg. He also says he's

434
00:26:20,320 --> 00:26:24,320
Speaker 1: been applying for some jobs he's invariably asked about his

435
00:26:24,400 --> 00:26:28,840
Speaker 1: experience at Rothenburg. In one instance, he told them about

436
00:26:28,920 --> 00:26:31,439
Speaker 1: his role blowing the whistle, just to see what the

437
00:26:31,520 --> 00:26:35,240
Speaker 1: response was. He said, there was a bit of nervous laughter,

438
00:26:36,320 --> 00:26:41,560
Speaker 1: and then he didn't get a call back. Hey, it's

439
00:26:41,600 --> 00:26:44,360
Speaker 1: me again in the present day. One of the reasons

440
00:26:44,400 --> 00:26:47,359
Speaker 1: we wanted to check in with Francisco is because of

441
00:26:47,400 --> 00:26:51,280
Speaker 1: a trial that just reached a conclusion in November. A

442
00:26:51,359 --> 00:26:55,520
Speaker 1: former employee had sued Rothenberg Ventures and Mike Rothenburg to

443
00:26:55,600 --> 00:26:59,760
Speaker 1: get reimbursed for expenses, and that former employee won the case.

444
00:27:00,320 --> 00:27:03,240
Speaker 1: You hear us talk about that and more here it

445
00:27:03,320 --> 00:27:09,480
Speaker 1: is so we ran our episode about you and May

446
00:27:09,600 --> 00:27:13,280
Speaker 1: how's life been. Um, it's been pretty stable since then.

447
00:27:13,320 --> 00:27:16,040
Speaker 1: I started a job right around the time the podcast aired,

448
00:27:16,600 --> 00:27:18,920
Speaker 1: so mainly I've been concentrating on that. Oh that's great.

449
00:27:18,920 --> 00:27:22,159
Speaker 1: Shortly after that must feel pretty nice. You know. One

450
00:27:22,200 --> 00:27:25,800
Speaker 1: of the worries that you had that you talked about

451
00:27:25,800 --> 00:27:28,080
Speaker 1: with us was that you might not be employable, and

452
00:27:28,119 --> 00:27:32,200
Speaker 1: now that you have this like whistle blower brand on you. Yeah,

453
00:27:32,240 --> 00:27:34,840
Speaker 1: and ended up not really being an issue. That's great.

454
00:27:34,880 --> 00:27:37,200
Speaker 1: Can you tell us a little bit more about the job. Yeah,

455
00:27:37,320 --> 00:27:41,280
Speaker 1: it's um about a fifty person um e commerce company.

456
00:27:41,480 --> 00:27:45,159
Speaker 1: Is that is a bigger company than Brook Ventures? Was

457
00:27:45,760 --> 00:27:48,040
Speaker 1: it is? It's about fifty people? And how does that

458
00:27:48,080 --> 00:27:50,879
Speaker 1: feel to be part of a new organization? It feels

459
00:27:50,880 --> 00:27:54,520
Speaker 1: good to be part of a real organization with proper

460
00:27:54,680 --> 00:27:56,960
Speaker 1: hr and that whole thing exactly. Yeah. Is it it's

461
00:27:56,960 --> 00:28:01,080
Speaker 1: a tech company okay, but not a venture capital firm? No? No? Yeah.

462
00:28:01,359 --> 00:28:04,480
Speaker 1: Was there any blowback after you came went public with us?

463
00:28:04,880 --> 00:28:09,480
Speaker 1: Um a little bit. There was like one weird blog post,

464
00:28:10,119 --> 00:28:14,000
Speaker 1: but otherwise other than that, not really. Yeah. Um, did

465
00:28:14,000 --> 00:28:16,760
Speaker 1: you hear from your friends about that episode? Yeah? A

466
00:28:16,760 --> 00:28:20,000
Speaker 1: lot of people texted me or emailed me. Yeah, like

467
00:28:20,040 --> 00:28:22,440
Speaker 1: I saw the article or listened to the podcast. What

468
00:28:22,600 --> 00:28:25,240
Speaker 1: they say? Um? Some people said like it's great what

469
00:28:25,280 --> 00:28:30,840
Speaker 1: you did. Other people just like, oh that's cool. Yeah.

470
00:28:31,000 --> 00:28:34,400
Speaker 1: Were you nervous about, you know, using your real name

471
00:28:34,440 --> 00:28:37,600
Speaker 1: in our podcast? Um? A little bit, But I mean

472
00:28:37,600 --> 00:28:40,200
Speaker 1: there isn't really a story if it's all anonymous, right,

473
00:28:40,720 --> 00:28:43,960
Speaker 1: and remind me again what made you want to go public?

474
00:28:44,120 --> 00:28:46,480
Speaker 1: I just felt like my side of the story wasn't

475
00:28:46,480 --> 00:28:48,080
Speaker 1: out there, so I just wanted to put the truth

476
00:28:48,120 --> 00:28:50,840
Speaker 1: out there. Yeah. Are you glad you did it? Yeah?

477
00:28:51,080 --> 00:28:55,520
Speaker 1: When you joined this new company, had they known about

478
00:28:55,640 --> 00:28:58,480
Speaker 1: your history? Yeah? So it was a friend of mine

479
00:28:58,480 --> 00:29:00,760
Speaker 1: who recruited me there, Okay, I've been telling about it

480
00:29:00,920 --> 00:29:05,480
Speaker 1: all along, so like they weren't surprised. Some of the

481
00:29:05,520 --> 00:29:08,480
Speaker 1: people the company were, but not everyone. Did they talk

482
00:29:08,520 --> 00:29:11,960
Speaker 1: to you about it? Yeah? The CEO took me aside

483
00:29:12,080 --> 00:29:14,120
Speaker 1: and he told me that the board had talked about it.

484
00:29:14,600 --> 00:29:17,160
Speaker 1: Really but he told me that they said good things.

485
00:29:17,560 --> 00:29:21,080
Speaker 1: Oh that's great, that's great. That must have That must

486
00:29:21,160 --> 00:29:25,480
Speaker 1: made you feel proud. Yeah, that was a good feeling. Um.

487
00:29:25,560 --> 00:29:27,240
Speaker 1: You know. One of the reasons why I wanted to

488
00:29:27,280 --> 00:29:31,920
Speaker 1: talk to you today is because the first lawsuit against

489
00:29:32,040 --> 00:29:37,320
Speaker 1: Rothenburg Ventures came to a conclusion. So I guess in

490
00:29:37,360 --> 00:29:41,880
Speaker 1: that sense, you know, a former employee who sued Rothenburg

491
00:29:41,960 --> 00:29:46,240
Speaker 1: Ventures one. How do you feel about that? I just

492
00:29:46,280 --> 00:29:49,600
Speaker 1: feel like, you know things are going correctly. Yeah. Yeah.

493
00:29:49,720 --> 00:29:52,600
Speaker 1: Did it give you a sense of closure in some ways? Um,

494
00:29:52,640 --> 00:29:56,520
Speaker 1: a little bit. Maybe I'm a little more impatient, just

495
00:29:56,520 --> 00:29:59,960
Speaker 1: waiting for the other investigations to wrap up. But other

496
00:30:00,000 --> 00:30:02,840
Speaker 1: and that about where I was back in May. Yeah,

497
00:30:02,960 --> 00:30:04,560
Speaker 1: I mean I think back when we talked to you,

498
00:30:04,600 --> 00:30:09,760
Speaker 1: are still weighing potentially taking legal action. Yeah, I still am.

499
00:30:09,800 --> 00:30:13,480
Speaker 1: I'm actually talking to a lawyer in Chicago specializes in

500
00:30:13,560 --> 00:30:16,719
Speaker 1: this kind of thing. So we're still weighing that as

501
00:30:16,760 --> 00:30:18,760
Speaker 1: an option. Got it. And so this would be like

502
00:30:18,800 --> 00:30:23,360
Speaker 1: for wrongful termination, Um, was slower retaliation? Got it. What

503
00:30:23,440 --> 00:30:27,160
Speaker 1: would you say to people who are out there right now,

504
00:30:27,400 --> 00:30:30,920
Speaker 1: who are you know who know that their compet employers

505
00:30:30,920 --> 00:30:37,400
Speaker 1: are doing bad things and are thinking about potentially calling

506
00:30:37,440 --> 00:30:40,720
Speaker 1: out their employers for that behavior. Well, there's really no

507
00:30:40,800 --> 00:30:46,160
Speaker 1: downside to going to the authorities because they keep it confidential. Um.

508
00:30:46,160 --> 00:30:51,000
Speaker 1: But obviously going public to the press is different. Yeah. Yeah, yeah,

509
00:30:51,600 --> 00:30:54,440
Speaker 1: so they have to weigh that. Sometimes it's worth it,

510
00:30:54,480 --> 00:30:58,160
Speaker 1: sometimes it isn't. What made it worth it for you? Um,

511
00:30:58,200 --> 00:31:00,560
Speaker 1: I didn't see a lot of down sides at that

512
00:31:00,600 --> 00:31:02,560
Speaker 1: point to doing it, and I wanted to have my

513
00:31:02,600 --> 00:31:06,120
Speaker 1: side out there. Yeah, And what was what were you

514
00:31:06,200 --> 00:31:09,200
Speaker 1: worried might happen? What? What did you think might be

515
00:31:09,280 --> 00:31:13,400
Speaker 1: like the cons of going public for the you know,

516
00:31:13,400 --> 00:31:15,959
Speaker 1: I might, I might bungle it, and people even if

517
00:31:15,960 --> 00:31:17,840
Speaker 1: I try to get the truth out there, people might

518
00:31:17,960 --> 00:31:21,800
Speaker 1: misinterpret it happens all the time, you know. I'm glad

519
00:31:21,840 --> 00:31:24,959
Speaker 1: to see though, that you didn't leave the tech industry altogether.

520
00:31:26,160 --> 00:31:28,960
Speaker 1: I'm kind of stuck here where my skill set is. Um,

521
00:31:29,000 --> 00:31:31,560
Speaker 1: So what specifically are you doing at this new company.

522
00:31:31,600 --> 00:31:37,320
Speaker 1: I'm a senior software engineer. Okay, so working Ruby unrails mainly. Yeah,

523
00:31:37,520 --> 00:31:40,360
Speaker 1: mainly back end Okay. Yeah, so it really does sound

524
00:31:40,360 --> 00:31:43,480
Speaker 1: like here there's no way of leaving the industry. I'm

525
00:31:43,520 --> 00:31:46,280
Speaker 1: just I'm glad to hear that, because, you know, I

526
00:31:46,320 --> 00:31:49,760
Speaker 1: was worried maybe like you'd had enough with the industry

527
00:31:49,760 --> 00:31:52,840
Speaker 1: in general and tried to leave altogether, like leave the area,

528
00:31:53,040 --> 00:31:56,040
Speaker 1: leave the industry. Yeah. I might leave the area eventually,

529
00:31:56,160 --> 00:32:01,520
Speaker 1: but always be working in tech. I'll stay at this

530
00:32:01,560 --> 00:32:04,960
Speaker 1: company for a while, um, and then probably at some

531
00:32:05,000 --> 00:32:08,080
Speaker 1: point lead to start my own company around what. Um.

532
00:32:08,160 --> 00:32:10,960
Speaker 1: The idea that I have in mind now is actually

533
00:32:11,240 --> 00:32:15,640
Speaker 1: getting public data from the SEC making it easy to search. Oh,

534
00:32:15,680 --> 00:32:18,320
Speaker 1: that's interesting, So it's like kind of related to it

535
00:32:18,440 --> 00:32:21,000
Speaker 1: is Yeah, Yeah, like SEC they have they have the

536
00:32:21,040 --> 00:32:25,240
Speaker 1: site investor dot Gov for looking up UM investment firms,

537
00:32:25,720 --> 00:32:29,200
Speaker 1: and it's really hard to search on it, so UM

538
00:32:29,240 --> 00:32:31,080
Speaker 1: I've done a foil request to get all that data.

539
00:32:31,560 --> 00:32:33,680
Speaker 1: I'm just gonna make an easy to use search interface

540
00:32:34,400 --> 00:32:39,480
Speaker 1: so that experience you went through calling out Rothenburg Ventures

541
00:32:40,280 --> 00:33:00,320
Speaker 1: eventually might end up leading to your next company. Yeah. Yeah,

542
00:33:01,800 --> 00:33:04,920
Speaker 1: and let's it for this week's episode of Decrypted. Thanks

543
00:33:04,920 --> 00:33:08,440
Speaker 1: for listening. If you haven't already, please subscribe to our

544
00:33:08,440 --> 00:33:11,760
Speaker 1: show wherever you get your podcasts and let us know

545
00:33:11,840 --> 00:33:13,920
Speaker 1: what you think of the show. You can email us

546
00:33:13,960 --> 00:33:17,120
Speaker 1: at Decrypted at Bloomberg dot net, or you can reach

547
00:33:17,200 --> 00:33:20,640
Speaker 1: out to us on Twitter. I'm at Akio seven, and Adam,

548
00:33:20,800 --> 00:33:26,600
Speaker 1: who reported the original episode, is at Satriano. This original episode,

549
00:33:26,760 --> 00:33:30,400
Speaker 1: as well as updated conversation, was produced by pa Gitkari,

550
00:33:30,640 --> 00:33:45,720
Speaker 1: Magnus Hendrickson, and Liz Smith. We'll see you next week.

551
00:33:36,400 --> 00:33:36,440
Speaker 1: M