Bitwise

[BallGuy]

The news of Bitwise sucks. Absolutely terrible news for the Central Valley. The tech sector sucks right now, I do believe it is temporary, much like the economy, but man this can really hurt the valley's progress for years and years down the road.

https://www.fresnobee.com/news/local/article275920386.html

[izne1home]

"A company growing at the velocity that Bitwise does depends on a meaningful number of (venture) transactions, revenue, debt and equity closing," Soberal said. "This is a year where we simply lost too many times. That led us to a financial condition where we needed to take immediate and decisive action."

Sounds like a Ponzi scheme.  When you're only one step ahead, you cannot afford to stumble.  We will learn more after the investors start filing their lawsuits. 

[BallGuy]

"A company growing at the velocity that Bitwise does depends on a meaningful number of (venture) transactions, revenue, debt and equity closing," Soberal said. "This is a year where we simply lost too many times. That led us to a financial condition where we needed to take immediate and decisive action."

Sounds like a Ponzi scheme.  When you're only one step ahead, you cannot afford to stumble.  We will learn more after the investors start filing their lawsuits.

As someone in the hiring world, they were hiring-and a lot-at a high rate all the way to the end.

[izne1home]

As someone in the hiring world, they were hiring-and a lot-at a high rate all the way to the end.

https://www.fresnobee.com/news/local/article276038346.html

The beginning of the end.  A 'campaign of deceit.'  Not surprising they were pumping up their payroll.  For most fraudsters, the appearance of success is just as important (maybe more important) as the reality of success.  They were also discounting their federal employee retention credits to hard money lenders in New York.  I wouldn't be surprised if there is a bankruptcy and a criminal investigation by the US Attorney.  Maybe some injured knee caps.

When you take public funds from municipalities, it comes with some pretty dangerous strings attached.  Politicians don't like looking like fools. 

[Bronco]

Just playing at success.

[BallGuy]

https://www.fresnobee.com/news/local/article276038346.html

The beginning of the end.  A 'campaign of deceit.'  Not surprising they were pumping up their payroll.  For most fraudsters, the appearance of success is just as important (maybe more important) as the reality of success.  They were also discounting their federal employee retention credits to hard money lenders in New York.  I wouldn't be surprised if there is a bankruptcy and a criminal investigation by the US Attorney.  Maybe some injured knee caps.

When you take public funds from municipalities, it comes with some pretty dangerous strings attached.  Politicians don't like looking like fools.

This was always something I wondered about. I've never worked with them, but from the outside looking in, and as someone that is in tech recruiting, I kind of admired them. The thing to me is, is they are a tech company, and every startup I work with (unless you're an AI company) has been told by all the money bags that they need to have a runway of 24-36 months. It seems like BW was flatout wreck-less, and thought they were above the recession. Further-they doubled down taking money from municipalities. It's one thing taking money from PE and VC's, it's sort of the business of tech (engineers cost this, good engineers cost this +...bidding war, blah blah), but to take money from municipalities muddies these waters a ton.

[izne1home]

Further-they doubled down taking money from municipalities. It's one thing taking money from PE and VC's, it's sort of the business of tech (engineers cost this, good engineers cost this +...bidding war, blah blah), but to take money from municipalities muddies these waters a ton.

I agree.  Private equity and venture capital investors are sophisticated and only invest money they can afford to lose, but..., if they find out you lied to them, they unleash the hounds.  Hopefully the Bitwise principals took notes on the Theranos Elizabeth Holmes trial.

The real killer is how they treated their employees.  Mass layoffs are one thing, but misusing funds withheld from employee paychecks or failing to pay wages earned is a crime.  In addition to the hounds, they will have local, state, and federal prosecutors coming after them.

If there was anything there to salvage, one of those investors will walk away owning it all for pennies on the dollar, but based on the reports, these two kids are probably going to do time. 

[izne1home]

Just watched some Sunday morning interviews.  While everyone struggled to explain or understand what the Bitwise business model was, local elected officials are using terms like fraud, Ponzi scheme, crimes...  On top of that, there are now a few hundred pissed-off unpaid ex-employees turned whistleblowers, and a few board members and upper management currently negotiating immunity deals with federal prosecutors. 

[BallGuy]

Just watched some Sunday morning interviews.  While everyone struggled to explain or understand what the Bitwise business model was, local elected officials are using terms like fraud, Ponzi scheme, crimes...  On top of that, there are now a few hundred pissed-off unpaid ex-employees turned whistleblowers, and a few board members and upper management currently negotiating immunity deals with federal prosecutors.

Nuts-My understanding of Bitwise is there are different business units/products. One of which was literally "WeWork". Another side was consulting, and then another was education/training. Again, never worked with them, they wouldn't return my cold calls, but that was my understanding

[izne1home]

Whatever it was, it must have looked good on paper, at least in the context of tech-deprived cities like Fresno. 

[izne1home]

https://abc30.com/bitwise-fbi-criminal-investigation-sources-confirm-layoffs/13437852/

Here we go...

[BallGuy]

Unreal...They hired people the previous month...Not as a contractor/consultant, but took them from their previous FTE job. Just a sad story all around

[BallGuy]