The Bolt founder claimed a group of investors had signed off on the company’s chaotic $450 million raise, but some said they hadn’t. Now, BlackRock and other investors have moved to stall the round.
On Monday morning, Bolt founder Ryan Breslow thanked a group of investors for signing a deal that would reinstall him as CEO of the payments company, which announced plans in August to raise $450 million at an astronomical $14 billion valuation.
“I’m so grateful to announce the support of so many of our key stockholders for the Series F Financing round,” he wrote in an email to shareholders, which went on to list “a few investors who have given us permission to share their names as supporters”: NJF Capital, Stack Capital, Streamlined Capital, Thirdbase Capital, Stonebridge, Montauk Ventures, Daniel Fine, Ash Pournouri, David Spencer, Oleg Tscheltzoff, Steve Ryan, Mike Krilivsky and Bruno Werneck.
For Breslow, whose planned raise and reinstatement as CEO requires the majority approval of preferred shareholders, lining up endorsements from 13 willing to be publicly named was a proud moment — were it not for one problem: some of them had not actually given their support.
I am not sure why Ryan included me. He did not have my permission and I do not support this financing.
Bolt investor Philip Krim
“Montauk Ventures has not and does not support the financing,” Philip Krim, the founder of Montauk Ventures and mattress startup Casper, told Forbes. “I am not sure why Ryan included me. He did not have my permission and I do not support this financing.”
Pournouri, a music producer and executive, was similarly irked. “Not sure why my name was circulated in this way and I have not yet signed anything,” he said.
Of the 13 investors named in Breslow’s email, only one, Oleg Tscheltzoff, would confirm that they had signed paperwork. “I think none can better run a company than its founder,” Tscheltzoff told Forbes. The other ten declined to say or did not respond to comment requests.
Breslow’s seemingly premature victory lap is the latest cockup in a chaotic series of errors and misunderstandings that have confused shareholders struggling to make sense of the unorthodox deal he insists will “lead Bolt back to the path of massive growth.”
To recap: Just days after announcing the $450 million round, the firm listed as the lead investor, Seychelles-registered investment bank Silverbear Capital, denied any participation. Shortly after, a broker assumed responsibility for mistakenly naming them in the deal. Then the round’s other lead investor, The London Fund, clarified that “at no point have we stated that a transaction has concluded.” Bolt is now threatening legal action against Silverbear to force its participation in the round.
The plan hit yet another obstacle on Tuesday, when the world’s largest asset manager BlackRock, along with Hedosophia and Untitled Ventures, applied for a restraining order in Delaware’s Court of the Chancery to halt Bolt’s Series F. Last month, the same group objected to a proposed settlement between Breslow, Bolt and investor Activant Capital that would see Activant sell roughly $36 million of its shares back to the company.
The trio of shareholders claim their questions about the deal have gone unanswered by Bolt, and called for the court to pause the fundraise ahead of the Tuesday deadline to sign.
“The Company is coercing its investors by forcing them to choose between paying millions of dollars for new stock or losing most of their existing investment,” said Cliff Gardner of Skadden Arps, attorney for the investors in the court filing. They claimed the Series F has not been approved by Bolt’s board of directors. “Breslow stands on all sides of the purported deal,” they argued.
Bolt, Blackrock, Hedosophia, and Untitled Ventures have not yet responded to requests for comment.
Meanwhile, Bolt’s leaders have doubled down on the company’s outlook, which is, even if generous, bleak. “Because of the extraordinary actions taken by management and our Board, we now have the opportunity to get everything back on track…and all the firepower we need to see our grandest ambitions through,” interim CEO Justin Grooms wrote shareholders last Friday.
Breslow’s pitch to Bolt investors to back his return as CEO struck a sour note with those alarmed by the company’s stalled growth, wild spending, and an ultimatum to back the new round or risk having 70% of their investment wiped out. One Bolt shareholder characterized the deal to Forbes as “either bad faith or extremely delusional or both.”
In his email, Breslow offered a few concessions to investors. The original threat of shares being bought back for just one cent is still on the table, but only if the deal’s lead investor fails to pony up $100 million as promised. That’s down from the $200 million Bolt said it was hoping to raise last week. The company has also trimmed what it expects to raise from existing investors by a fifth to $20 million. Bolt still seems confident that it will land $250 million of “marketing credits” from The London Fund, whose founder and CEO Ashesh Shah told Forbes that it remains subject to compliance “with our internal process.”
But these new terms could mean that shareholders still lose out even if the $100 million investment does not materialize. In a new set of financial documents shared with investors, Bolt proposed converting preference shares to a new share class stripped of investors rights as part of the round (again hinged on the backing of a majority of preferred shareholders).
Breslow also addressed the flagging performance of his startup. Financial statements shared with investors and seen by Forbes last week showed that Bolt had made a $302 million loss on revenues of just $27 million in 2023. “Watching from the sidelines as the company I’ve poured my heart and soul into slowly lost its way was nothing short of devastating,” Breslow said in the letter.
The one-time billionaire continued to work as executive chairman of Bolt after stepping back as CEO in January 2022. Since then, Breslow instituted and then scrapped a four-day week at the startup, reportedly fired Bolt’s replacement CEO Maju Kuruvilla, and dismissed five company directors in two separate boardroom putsches after dueling with investors in court over a $30 million personal loan on his Bolt stock he refused to repay.
This article was originally published on forbes.com and all figures are in USD.
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