Feb 1, 2022 - Economy

Tech founder vs. the "Silicon Valley mob"

A lightning bolt striking a phone

Illustration: Sarah Grillo/Axios

Ryan Breslow is stepping up, in terms of both his job title at Bolt Financial and his battle with what he calls the "Silicon Valley mob."

Why it matters: Few tech founders eagerly poke the bear, particularly ones in the midst of raising hundreds of millions of dollars in new funding.

What happened: Breslow is founder of Bolt Financial, a one-stop checkout company most recently valued at $11 billion. He recently posted a Twitter thread arguing that accelerator program Y Combinator has become too bloated to justify its dilution cost. He also alleged that YC and its VC friends have used anti-competitive means to aid mega-winner alums like payments giant Stripe.

  • YC and those aforementioned VCs hit back with everything from Twitter threads of their own to memes to poop emojis, in short arguing that Breslow — who once applied to YC but was rejected — didn't have his facts right.
  • Yesterday, TechCrunch's Connie Loizos scooped that Breslow was transitioning from CEO to executive chair at Bolt. The new CEO is Maju Kuruvilla, a former Amazon exec who joined Bolt in 2019 and was promoted to COO last summer.
  • Breslow claims the switch had been in the works for weeks, and that the timing was tied to the end of Bolt's fiscal year (Jan. 31), not backlash to his tweets. "I saw someone next to me who could take my job as CEO and be better at it than me," Breslow told me last night. "Maju already managed a vast majority of the company, and this allows me to focus on what I'm best at, like big deals and culture and fundraising."
  • In terms of culture, Breslow recently implemented four-day workweeks at Bolt, and has been outspoken in hoping others follow its lead.

Deals: Breslow says that "acquisitions will be a key part of what we do" going forward, adding that he's thinking bigger than acqui-hires and that Bolt also will make venture investments. Specifically, deals could be used to build more around consumer products related to Bolt's shopper network, plus for international and social commerce expansion.

  • Breslow declined to discuss fundraising, besides the $355 million in Series E-1 funding it recently secured at an $11 billion valuation.
  • But Axios has learned that round was quietly co-led by Hedosophia, alongside disclosed backers like BlackRock. It's also continuing to work toward its overall $777 million Series E target, as we reported last October, via a Series E-2 round that will come with a $14 billion valuation. Expect that new tranche to close later this month, with a Series E-3 round also possible (the tranches are being spaced out, letting Bolt raise its valuation as it signs large new customers).
  • I've received conflicting information on whether of not the Series E-1 investors were informed of the pending CEO switch (BlackRock declined comment). Obviously, prospective Series E-2 investors are aware.

Competition: Breslow believes that Stripe has asked many of its VCs to refrain from backing potential competitors, including by leveraging the YC network. For example, he alleges that Stripe investor Founders Fund invested Bolt when it was a crypto play, but was "blocked" from doing follow-ons once Bolt pivoted.

  • Leaving aside the legitimacy of Breslow's Stripe claims, it's certainly true that VCs may ask an existing portfolio company for "permission" to back a rival (even if not legally required). John Doerr, for example, did so when he wanted to invest in Google but was already invested in Excite.
  • It makes sense, in terms of VC scruples, but obviously could be abused by companies with overflowing investor rosters.

The bottom line: Breslow isn't backing down, and it sounds like his new job could give him more latitude to pursue his "conscious culture" objectives. "If you do things differently and fail, you're going to get made fun of," he says. "But it's worth doing if you believe it's right."

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