Former Rothenberg employees allege mistreatment and cash management problems
As TechCrunch has previously reported, there’s been an exodus of talent from the Rothenberg “ecosystem,” amid claims of a significant breach of fiduciary responsibilities and other unconventional behavior by the venture firm’s founder, Mike Rothenberg.
This week, we have learned more details about alleged employee abuses within Rothenberg Ventures, recently re-branded as Frontier Tech Ventures, as well as the River Group, a virtual reality business including River Studios and several other units.
The allegations are that Rothenberg put pressure on employees to align with his political beliefs in a very public way; left employees without reimbursement for approved work expenses that they charged to their personal cards and accounts; and hectored employees who were on doctor-ordered medical leave to keep working while they were not fit to do so.
An attorney representing Mike Rothenberg said that the allegations being reported today and in prior stories here were “inaccurate to a troubling degree” and “biased” but did not further elaborate.
In more than one instance former employees say Rothenberg pressured colleagues who were on medical leave to continue doing work, even after he had received letters from their doctors ordering time off.
TechCrunch reviewed correspondence between Rothenberg, and an employee confirming that he knew this person was too sick to work, and correspondence that indicates Rothenberg contacted this person during their sick leave with work requests.
Rothenberg also reportedly required employees to pay for approved work expenses on their own debit or credit cards frequently, according to six former employees of the fund and VR business.
In many cases he failed to reimburse them, they said, and even told former employees their expenditures would require new approvals and could be repudiated by him.
As TechCrunch’s Connie Loizos previously reported, former employee and Chief Financial Officer for Rothenberg Ventures Management Co., David Haase, has even filed a lawsuit against Rothenberg for breach of contract and failure to reimburse him for $100,000 in business expenses.
Today, several former employees have more than a thousand dollars in un-reimbursed expenses paid with their personal cards, as a result of this rampant practice, they said.
In some cases, Mike Rothenberg gave executives his own American Express “black card,” to handle large, approved expenses, including to pay vendors for services rendered they said.
Normally such expenses should be paid from a corporate account, and accounts payable department.
Later, some former executives said they were notified by payment tech companies including Square, that their unrelated merchant accounts had been shut down because there was seemingly fraudulent activity associated with their names.
That’s because, former employees explained, there was so much chaotic use, and so many large charges, on their boss’s card and their own personal cards, they were flagged by financial institutions as possibly having been hacked, or worse, committing fraud.
Mike Rothenberg was also thought to be disputing legitimate charges with his credit card provider, former employees believed.
Finally, Rothenberg pressured employees to align with his political beliefs.
According to several former employees in both the venture firm and the virtual reality business, Mike Rothenberg became “obsessed” with the notion of defeating Donald Trump in the forthcoming election.
He would call and text employees at all hours of the day and night, they said, including on their personal mobile phones, to rant about politics, and encourage them to post anti-Trump content to their social media feeds.
Suddenly, without advanced notice to employees or limited partners in Rothenberg Ventures’ funds, Mike Rothenberg unveiled plans for an anti-Trump think tank he called River Institute, at an event called Founder Field Day in May.
The event had been originally planned as a place for investors, industry insiders and members of the press to interact with River-affiliated virtual reality tech startups, and to try out the headsets, VR experiences, games and other technologies that they had developed.
While it was previously reported by TechCrunch’s Connie Loizos and Sarah Buhr that Rothenberg Ventures had potentially mishandled investors’ money and governance of its funds, the new allegations about Mike Rothenberg’s cash management and treatment of employees raise a host of new concerns.
See original article here: