The most stunning part of the CaaStle fraud allegations isn't that a huckster CEO burned through $530 million, or that she appears to have forged years of financial disclosures. It's that the company's board let her stay in charge after finding out — and took months to warn investors.

• What follows is based on research and conversations with numerous sources:

The whistleblower: Late last year, Jed Lenzner got some numbers from CaaStle that raised his eyebrows. So he eventually rang up the listed auditor, BDO.

• Lenzner wasn't a shareholder, but his firm handles the personal investments of Henry Kravis, who did back CaaStle.
• BDO told Lenzner that it had been relieved of the account years earlier. Lenzer went to CaaStle's board.

Behind the scenes: That board included John Hennessey, the former president of Stanford University and a current director of Google parent company Alphabet.

• Soon after, Hennessey quietly quit the board and was replaced by CaaStle co-founder JP Singh, a Princeton computer science professor who had left the board in 2017.
• Sometime during this transition, an investigation was launched and then-CEO Christine Hunsicker allegedly admitted to the board what she had done.
• Investors were never told about the board transition. Nor about the investigation nor the fraud.
• But many of them did hear from Hunsicker, who somehow still had her job and was trying to raise new money for CaaStle as late as last month.
• Hennessey hasn't responded to requests for comment. Nor has Hunsicker.

Delayed disclosure: Most investors didn't know about the fraud until a March 29 investor letter, while a few apparently learned about it via this newsletter.

• Same goes for the existence of DOJ and SEC investigations into the company and Hunsicker.

Fast forward: As of last week, Singh was trying to put together a rescue plan that would have required a $3 million bridge loan.

• He and interim CEO George Goldenberg told investors that the company would have to file for bankruptcy protection if the deal didn't come together by this past weekend. Not surprisingly, investors weren't so thrilled with the idea of throwing more money down a black hole, particularly when they couldn't even get a complete cap table.
• As of right now, there is no loan and also no bankruptcy filing.
• Also worth noting that Singh told investors that the loan would help CaaStle move toward a merger of sorts with P180, a Hunsicker co-founded group that allegedly owes CaaStle $14.4 million. But P180 tells me that it "never considered a merger."
• Singh has not responded to requests for comment.

Klarna has put its IPO plans on ice, due to President Trump's trade war. And then so did Chime, eToro, MNTN, and StubHub.

Why it's the BFD: This is the sum of all fears for venture capitalists.

• The IPO window is nailed shut. Even if investors buy the dip, they'll favor known names over new issues.
• Limited partners are suddenly feeling denominator effects for the first time in years, and it's even more extreme for universities and nonprofits that have had some of their federal funding cut.
• Finally, there's no LP goodwill after years of delayed distributions.

The bottom line: Deep breaths. As we wrote on Friday, maybe cooler heads prevail and this all becomes an econ textbook footnote. But it feels like we're nearing a point where the hotheads create perpetual motion.

• Rippling, the payroll software company, is in early talks to raise hundreds of millions of dollars at a $16b valuation, per Bloomberg. axios.link/4iT2uwk

• SandboxAQ, a Palo Alto, Calif.-based Alphabet spinoff developing AI models for enterprises, raised $150m from Google, Nvidia, and BNP Paribas at a $5.8b valuation. axios.link/3ElIRhn

• Rescale, an SF-based digital engineering platform, raised $115m in Series D funding from Applied Ventures, Atika Capital, Foxconn, Hanwha Deeptech Venture Fund, Hitachi Ventures, NEC Orchestrating Future Fund, NVIDIA, Prosperity7, SineWave Ventures, Translink Capital, University of Michigan, and YC. axios.link/4jpnk6w

🚑 RayThera, a San Diego-based immunology biotech, raised $110m in Series A funding led by Foresite Capital and OrbiMed co-led, joined by TTM Capital. raythera.com

• Pennylane, a French accounting software startup, raised 75m at a $2b valuation. Sequoia Capital led, and was joined by CapitalG, Meritech, and DST Global. axios.link/4jpLBJJ

• Scapia, an Indian travel fintech, raised $40m in Series B funding led by Peak XV Partners. axios.link/43Jnzoi

• Miss Moneypenny, a German wallet studio startup, raised $8m in seed funding led by Earlybird Venture Capital. axios.link/4lp9Yck

⚡ FaradaIC Sensors, a German electrochemical gas detection startup, raised €4.5m led by JOIN Capital. axios.link/4i1X7JZ

• Linus, an Oakland, Calif.-based SAT prep gamification startup, raised $5m in seed funding led by Owl Ventures. linusprep.com

• Sagittal AI, a London-based maker of "AI team members," raised $2.2m in pre-seed funding. Twin Path Ventures led, joined by SineWave Ventures, Fuel Ventures, Blue Lake VC, and Husayn Kassai. axios.link/423xRyv

• Capital D acquired a minority stake in Refinery89, an Amsterdam-based ad-tech platform for European and Latin American digital publishers. refinery89.com

⚡ CVC Capital Partners agreed to acquire a 49% stake in Balance, the biogas unit of German gas company VNG. axios.link/3G9pGb6

• DFW Capital Partners acquired a stake in Kept Companies, a Fairfield, N.J.-based cleaning and maintenance company, from Acon Investments. keptcompanies.com

⚡ Stonepeak agreed to acquire a 40% interest in Louisiana LNG, an LNG production and export terminal owned by Woodside Energy (NYSE: WDS). axios.link/4i3JutK

• Talos360, an LCD portfolio company, acquired Appraise, a provider of performance management software. axios.link/4230NGT

There are no IPOs scheduled this week on U.S. exchanges. Because of course there aren't.

• Tata Capital filed initial paperwork for an Indian IPO that could seek to raise $2b. axios.link/4iXE0C6

President Trump on Friday announced that he again would delay the ban on TikTok, scheduled for this past weekend, despite not having made a deal with the app's Chinese owner, ByteDance.

• Cloudflare (NYSE: NET) acquired Outerbase, an SF-based developer database company seeded by Goodwater Capital, Surface Ventures, Trac, and YC. axios.link/4cobiIi

• G/O Media, a Great Hill Partners portfolio company, sold business news brand Quartz and commerce site The Inventory to Canadian software firm Redbrick, per Axios. axios.link/4lhy1JU

🎲 Bally's (NYSE: BALY) agreed to take control of Australian casino group Star Entertainment (ASX: SGR), via a A$300m rescue package. axios.link/42ka4ZX

• OpenAI has discussed paying around $500m to acquire io Products, an AI hardware startup launched by Jony Ive and Sam Altman, per the Information. axios.link/42zDhRR

• Republic Airways and Mesa Air Group (Nasdaq: MESA) agreed to merge, with the combined regional carrier to be publicly traded. axios.link/43JUGs6

• Saint-Gobain (Paris: SGO) has paused the auction for its auto glass unit, for which it hoped to fetch €2.5b, per Bloomberg. axios.link/42omJuR

• AlpInvest, a unit of Carlyle, raised $3.2b for its second portfolio finance fund. alpinvest.com

• Ardian is delaying fundraising for its next flagship fund as it revamps its buyout team, per Bloomberg. axios.link/4cp5RbV

• Osney Capital raised £50m for its debut cybersecurity seed fund. osneycapital.com

• Twine Ventures, an SF-based firm led by Leshika Samarasinghe, is raising $50m for its second fund, per an SEC filing.

• Braden Eddy joined Juniper Capital Management as a partner. He previously was with Hastings Equity Partners. axios.link/41ZDZHV

• Gabriel Gruber joined Jefferies as global co-head of chemicals investment banking, after having served in the same role for Barclays. axios.link/4cmf8Sf

Private equity stocks are getting crushed in the crash.

Zoom in: Investors in such firms care more about AUM than performance, so the declines reflect fears that capital inflows will slow.