Better.com CEO Vishal Garg admitted to employees that he “personally guaranteed” injection of $750 million in cash provided to an online mortgage lender last November in an email seen by TechCrunch.
Let’s start from the very beginning. Last May, Better.com announced that it went public through SPAK this would have valued the company at nearly $7 billion. Then on November 30, the company announced that the blanched Aurora Acquisition Corp. and SoftBank have decided to change the terms of their funding agreement to give Better half of $1.5 billion. they committed immediately instead of waiting until the deal was closed.
But what was not revealed then, as Luck reported last week was that when SoftBank disbursed that $750 million in November, it was Garg, not the company as a whole, who took responsibility for compensating the Japanese investment conglomerate for any losses.
Specifically, Aurora’s S-4 document states: “Better’s founder and CEO, in his personal capacity, has agreed to sign an additional letter with SoftBank pursuant to which he may be liable for realized losses or receive payments under certain circumstances. from SoftBank in connection with post-closure convertible bonds that could divert the resources and attention of the best founder and CEO away from our business and have a negative impact on his personal financial situation.
Notably, there is no limit to the amount of damages covered by the additional letter, and Garg alone “remains liable for all such damages which may require him, among other things, to sell a substantial portion of his Better Home & Finance common stock.” which could adversely affect the price of Better Home & Finance’s common stock.”
As mentioned above, in response to the disclosure of the details of the agreement, Garg sent an email, reviewed by TechCrunch, to all of Better’s current employees, admitting personal responsibility for this $750 million cash injection. In an email, he admitted that he “personally guaranteed” SoftBank $750 million of the $1.5 billion SoftBank agreed to invest back in November last year because he “wanted capital to build our dream,” knowing that “the world is about to collapse.” become ugly.” He wrote:
I may be stupid, but I believe in us. I believe in you. I believe in our mission. I believe in our vision. And I believe that we are the only people on this planet who will do whatever it takes to make home ownership better, faster, cheaper and accessible to everyone everywhere… I am fully committed to everything I have and will ever have… In five years when the $750 million SoftBank loan comes due around my 50th birthday…if that means I have nothing. Well, at least we’ll try… It’s true. I have personally guaranteed three-quarters of a billion dollars and I bear personal responsibility for this.
Meanwhile, several sources also said that Better.com has offered its workers in India the option to leave under a voluntary redundancy agreement in recent weeks. Apparently, more workers raised their hands – 90% of 2,100 – than the company expected, and it had to put a limit on the number of workers that could leave.
Sources said that “inners and analysts” were mostly allowed to leave, with only about 920 workers accepting their resignations. One person shared an email from HR India denying their request, saying the worker was “part of a critical team” at Better. A separate email that was sent to the company’s operating group outlining the structural reorganization stated that the need to offer a voluntary layoff to the company’s Indian employees was driven by the recognition that “a downturn is ahead and responding to it to ensure that Better is positioned for profitability.” remains important. ”
TechCrunch has reached out to Better.com for comment.
Credit: techcrunch.com /