The SEC Wants Disgraced VC Mike Rothenberg to Cough Up More Than $30M | Hacker News Reader

The SEC Wants Disgraced VC Mike Rothenberg to Cough Up More Than $30M

techcrunch.com

12 pointsmindgam37 comments

> Harvard Business School... used Rothenberg Ventures as a case study for students after Rothenberg graduated from the program... that case study — funded by HBS before any hint of trouble at the firm had surfaced — was co-authored by two professors who had a “significant financial interest in Rothenberg Ventures,” as stated prominently in a curriculum footnote.

More like a case study on how the top levels of academia are susceptible to blatant corruption from industry.

Can you explain how you think academia was corrupt here? As far as I know, all the investors in Rothenberg Ventures were honest people who got ripped off.

Case studies of bogus companies are interesting in their own right, such as the HBS study of Enron [https://www.hbs.edu/faculty/Pages/item.aspx?num=36626]. I think a detailed case study of Rothenberg Ventures would be worth reading, especially for people thinking of investing in flashy, smooth-talking, pop-up VC firms.

I'm going to go out on a limb as guess that the Harvard professors used their Business school's reputation to prop up the reputation [edit: was valuation] of the firm. We see this in many research focused universities where professors use the clout of their program to pump up their student's ventures -- typically with the professors being angel or early seed investors.

Corruption doesn't need to be illegal or against policy to be corruption. Corruption can be the degradation of institutions -- making their results less reliable -- and muddying truth.

VC firms don't have valuations. They raise funds and get paid a percentage of the funds under management (typically 2%/yr) for operating costs and a percentage of the overall gains they make (typically 20%).

As far as reliability of results: an insider's view (perhaps slightly biased) is usually more reliable than an outsider's view (who doesn't know anything more than what's publicly reported.)

Thanks for making this clear, I edited my statement to be reputation based and not valuation since the judgement of the firm is important for their ability raise funds.

Let's take this from the top: Rothenberg Ventures gained significant value by being featured as a HBS case study; the case study happens to written up by two professors who are heavily invested in Rothenberg. Yeah, they had a disclaimer or whatever. But I'm sorry - that is still an indication of shadiness, even before all these poor honest investors got ripped off by their even shadier business partner.

How could anybody working not realize it was embezzling money? It’s not possible to run a 70 man team on 60m of capital, even with 2 and 20.

One of my friends is a partner at a hedge fund that manages 100m and has three partners, no employees, and money is super tight, they barely can make ends meet every month.

It’s inconcievable that anyone would ever think the fund was legit, regardless if they found the accounting fraud or not.

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