Rothenberg Ventures

Founder and team

Mike Rothenberg is the founder and CEO of Frontier Technology Venture Capital. Prior to Frontier Tech Ventures, Mike invested at Audax Private Equity, consulted at Bain & Company, and coordinated Stanford's Entrepreneurial Thought Leaders program. From 2005-07, Mike's ETL team identified, invited, and hosted speakers Mark Zuckerberg, Marissa Mayer, Reid Hoffman, Evan Williams, and Tony Fadell. He returned to the Stanford Entrepreneurial Thought Leaders program in 2015 to speak about starting a venture capital firm. Mike is a graduate of the Stanford School of Engineering (B.S. 2006 and M.S. 2007) and Harvard Business School (MBA 2013). In 2001, Rothenberg was one of 30 students invited to the 2001 Math Olympiad in Washington, DC. A 2016 Backchannel article states: "At Stanford, he earned the nickname (unbeknownst to him, he says) 'the Machine,' for his workaholic drive as much as his stiff demeanor back then."

Former employees David Haase and Katie Fanelli filed separate lawsuits against the firm in the summer of 2016.

As of January 2017, Martin V. Mayo served as Chief Legal Officer for the firm.

History

Founded in 2012, the firm began with a $5 million seed fund raised by Rothenberg.

On November 4, 2013, data research company Mattermark awarded Rothenberg Ventures' portfolio its highest average ranking.

Frontier Tech Ventures built the world's first virtual-reality startup accelerator, River, and has invested in 30-plus VR companies to date, including AltSpaceVR, Fove, and Matterport.

In May 2014 Frontier Tech Ventures hosted Founder Field Day at AT&T Park. Hundreds of founders were selected, given customized schedules, and attended fireside chats by industry luminaries in Rothenberg Venture's network. The day ended in a Third Eye Blind concert at The Fillmore. The day was free for all attendees. The firm hosts 8-10 curated networking events a month. The event was the subject of a Harvard Business School case. The case study was covered in a TechCrunch article titled "For HBS students, a case study in what not to do."

Portfolio and exits

Frontier Tech Ventures has $20M in assets under management, with more than 60 companies in its portfolio. The firm invested in Revel, Robinhood, Gusto, August Locks, Luxe, Bustle, SOLS, Matterport, Patreon, and SpaceX, among others.

The firm has had three liquidity events to date: Swing by Swing, Propeller, and 1-Page. 1-Page went public on the Australian Stock Exchange and lost more than 96% of its value, slipping to less than 20¢ AUD per share. The Motley Fool described the crash as "what happens when companies spend heavily and can't generate sales."

Controversies

In August 2016, the firm's former Chief Financial Officer, David Haase, filed a lawsuit against the firm, claiming that he was directed to run up more than $100,000 in business expenses on an American Express account at the direction of Mike Rothenberg and never repaid. The following month, Katie Fanelli, Mike Rothenberg's former Chief of Staff, filed a separate lawsuit, alleging violations of labor laws and that the company failed to provide employees with their final paychecks.

In September 2016, the firm's CEO, Mike Rothenberg, was reported to be under investigation by the SEC, DOJ, and FBI for deceptive financial practices including wire fraud, bank fraud, breach of fiduciary duty, and retaliation against a lower-level employee who was fired and allegedly threatened with a lawsuit after bringing these allegations to the SEC. The potential charges reportedly stem from Mike Rothenberg wiring himself large payments and loans without the knowledge or approval of his limited partners. Other reports suggest that the investigation is due to the discovery that Mike Rothenberg had founded and funded his own virtual reality production company with $5 million from Rothenberg Ventures without informing his investors or disclosing the investment in annual reports, despite the size of that investment being allegedly 50x larger than the firm's standard investment.

In October 2016, the San Francisco Planning Department issued an enforcement letter ordering the firm to cease violating Planning Code Section 102 — operating a general office on the third floor of 1062 Folsom Street.

In November 2016, Mike Rothenberg, along with Elizabeth Holmes of Theranos, was listed by Bloomberg BusinessWeek as a CEO under 40 having a "rough year." In December 2016, Mike Rothenberg was listed by Forbes on its list of "The 12 Worst Career Crashes Of 2016" and by Business Insider on its list of the "22 biggest tech scandals of 2016." The firm's use of investors' money to finance Mike Rothenberg's side startup, River Studios, was included in Fortune's "The Ugly Unethical Underside of Silicon Valley" piece. A Wall Street Journal piece states that River Studios' funding prompted limited partners to raise conflict-of-interest questions. River Studios was not listed on the portfolio section of the firm's website until sometime after October 9, 2016. In February 2017, a limited partner stated that Mike told limited partners he had used an outside investment for River Studios rather than use their funds and that "Mike 100 percent did not ever disclose the investment in River." On February 25, 2016, River Studios received a $2 million wire transfer. That same day, Mike Rothenberg wired $1.7 million from River Studios directly to his personal bank account.

On February 8, 2017, Transcend VR filed suit in California civil court against Mike Rothenberg and River Studios, alleging contract breaches and fraud. The lawsuit's seventh cause of action states that in emails to Rothenberg Ventures limited partners in August 2016, Mike Rothenberg stated that "over a two-year period, one or more of Rothenberg's venture funds had invested $5 million in River Studios, such that one or more of those funds held economic rights, i.e. beneficial ownership, in and to the equity interests of River Studios."