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Vishal Garg (businessman)

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For the energy researcher, see Vishal Garg.

Vishal Garg (born 1977 or 1978)[1] is an Indian-American entrepreneur. He is the chief executive officer of mortgage lending company Better.com and previously co-founded the student loan company MyRichUncle.

Early life and education

Born in India, Garg moved to the Queens borough of New York City when he was seven, and grew up in Forest Hills.[2] While attending the academic magnet Stuyvesant High School in Manhattan, he resold books, CliffsNotes study guides, and thrift store clothes at a profit. Beginning in 1995 he studied finance and international business in the Stern School of Business at New York University[1] while working as a runner and entry clerk for Salomon Brothers[2] and as a trader for VZB Partners, a hedge fund.[3] After graduation, he worked for a short time for Morgan Stanley.[3]

Career

MyRichUncle

With Raza Khan, a fellow Indian immigrant whom he met in high school and who studied computer science in the same class at New York University, Garg founded a mortgage investment company in 2000 that became the online student loan provider MyRichUncle. Khan's brother provided an initial capital investment.[1][4] For their analysis-based approach to tailoring loan rates to different applicants, in 2006 Garg and Khan were listed in both Fast Company's Fast 50 and Business Week's Young Entrepreneurs of Tech.[5][6]

Embark, Future Finance, Climb Credit, and EIFC

MyRichUncle was caught up in the repercussions of the subprime mortgage crisis and its parent company, MRU Holdings, declared Chapter 7 bankruptcy in 2009. Garg and Khan continued to operate Embark, a provider of admissions software to higher education that MRU Holdings had purchased in 2007.[7] Beginning in August 2009, they also jointly led a new asset-backed securities team at Aram Global, an asset recovery firm.[8] Garg later co-founded two further student loan companies: Future Finance, a provider of student loans to students in the UK, with Brian Norton in 2013,[9] and Climb Credit, targeted at US programs with relatively lower costs and higher graduate employment rates, with Zander Rafael and Amit Sinha in 2014.[10]

Garg and Khan also used features of the software developed for MyRichUncle to start EIFC, a company that analyzed loan portfolios to identify potentially problematic loans.[1] Khan came to believe that Embark was misusing funds and that Garg was siphoning money from EIFC, resigned from both, and in 2013 filed a lawsuit against Garg. Garg later filed a counterclaim against Khan for mismanagement and theft of funds.[1][7] As of April 2023, seven of Khan’s fiduciary duty claims, his tortious interference claim, and claim for failure to execute corporate paperwork have all been dismissed.[11] Garg filed a conversion counterclaim stating that Khan refused to reimburse Garg for charges he incurred on Garg’s American Express card. The conversion counterclaim was granted, and Khan was ordered by the court to pay Garg $28,319.75.[12]

Better.com

In 2014, after a frustrating experience obtaining a mortgage, Garg founded Better.com, an online mortgage broker backed by venture capital;[1][13] at an early stage, he acquired Avex Funding of California to bolster the new company in the continuing aftermath of the financial crisis.[13] In August 2021, The Daily Beast estimated his equity in Better.com to be worth at least $1 billion.[14]

Khan alleged that Garg misappropriated both funds and proprietary software to launch Better.com, and a group of investors also filed suit alleging diversion of funds through a venture capital firm founded by Garg called 1/0 Capital.[1] Khan's claim of fraud was dismissed in May 2018.[15] In a deposition in December 2019 in his counter-suit against Khan, court documents state that Garg threatened to "staple him against a fucking wall and burn him alive"; Garg apologized later in the same session.[1][14]

Garg's treatment of employees has attracted negative publicity. In November 2020, Forbes quoted an e-mail in which he chided them as "a bunch of DUMB DOLPHINS".[1][16] In December 2021, a video was widely disseminated of him abruptly firing 900 people in the United States and India through a videoconferencing call shortly before Christmas.[4][16][17][18][19] Following public outrage, Garg apologized and wrote in a letter to employees that he had "failed to show the appropriate amount of respect and appreciation for the individuals who were affected".[20][21] He stepped back as CEO, returning in January 2022 after the company conducted a review of its internal culture.[22] A video subsequently emerged of Garg blaming himself for "overhir[ing]",[23] and a second round of layoffs took place in March 2022 after Garg's return, with the company later also offering 60-day severance packages to employees who voluntarily resigned.[24] In June 2022, a former senior executive at Better.com filed a lawsuit alleging that Garg misled investors in its financial filings and other representations while it tried to go public.[25][26]

Personal life

Garg is married to Sarita James, who became president of Embark in early 2015[27] and as of March 2022 is its CEO.[28] According to OpenSecrets, Garg has made numerous donations to the Democratic Party and its candidates.[29]

See also

References

  1. ^ a b c d e f g h i Jeans, David; Kirsch, Noah (November 20, 2020). "Mortgages, Fraud Claims and 'Dumb Dolphins': A Tangled Past Haunts Better.com CEO Vishal Garg". Forbes. Retrieved December 8, 2021.
  2. ^ a b Shifman, Gerald (April 30, 2020). "How the pandemic is speeding up the digitization of the mortgage industry". Crain's New York Business. Retrieved April 13, 2022.
  3. ^ a b "Class Notes: Saving On Loans". Stern Business. New York University Stern School of Business. Fall–Winter 2006. p. 44.
  4. ^ a b Graziosi, Graig (December 6, 2021). "Who is Vishal Garg, the CEO that fired 900 employees over Zoom call?". The Independent.
  5. ^ Kamenetz, Anya (December 20, 2006). "16. Raza Khan and Vishal Garg: MyRichUncle". Fast Company. Retrieved March 4, 2022.
  6. ^ "Raza Khan and Vishal Garg". Business Week. March 13, 2006. Archived from the original on April 10, 2006.
  7. ^ a b Rivard, Ry (July 3, 2014). "Troubles at Embark". Inside Higher Ed. Retrieved December 8, 2021.
  8. ^ Thetgyi, Olivia (November 2, 2009). "New Advisory Launches ABS Group". GlobalCapital.
  9. ^ Keane, Jonathan (September 22, 2018). "Future Finance's new chief wants to take the Dublin company beyond student loans". Fora. Retrieved May 7, 2022.
  10. ^ Shieber, Jonathan (April 13, 2016). "Climb Credit looks to transform student lending with a new business model based on graduate success". TechCrunch. Retrieved May 7, 2022.
  11. ^ "Khan v Garg" (PDF). January 16, 2023. Retrieved May 23, 2023.
  12. ^ "Khan v Garg" (PDF). April 13, 2023. Retrieved May 23, 2023.
  13. ^ a b Rudegeair, Peter (June 12, 2016). "Online Lender's Secret to Success: Past Failure". The Wall Street Journal. Retrieved March 3, 2022.
  14. ^ a b Kirsch, Noah (August 19, 2021). "He Threatened to Burn His Business Partner Alive. Now He's a Billionaire". The Daily Beast. Retrieved December 8, 2021.
  15. ^ "The Distinction Between A Direct and Derivative Claim Proves to Be Elusive for Part Owner of Asset Management and Advisory Services Company" (blog). Freiberger Haber LLP. June 13, 2018. Retrieved March 4, 2022.
  16. ^ a b Timmins, Beth (December 7, 2021). "Vishal Garg: US boss fires 900 employees over Zoom". BBC News business. Retrieved December 8, 2021.
  17. ^ Mathews, Jessica (December 6, 2021). "Better.com's morale and SPAC merger success in question after CEO's unruly comments". Fortune. Retrieved December 7, 2021.
  18. ^ Sweeney, Don (December 5, 2021). "Hundreds join company's pre-holiday Zoom call — to be told they've lost their jobs". Sacramento Bee.
  19. ^ "WATCH: Better.com CEO Vishal Garg fires 15% of its workforce over Zoom call". The Tribune. Chandigarh. December 6, 2021. Retrieved December 8, 2021.
  20. ^ Taylor, Derrick Bryson; Gross, Jenny (December 8, 2021). "The Better.com C.E.O. says he's 'deeply sorry' for firing workers over Zoom". The New York Times. Retrieved December 8, 2021.
  21. ^ Nishant, Niket; Dasgupta, Shounak (December 9, 2021). "Better.com CEO apologizes after laying off 900 employees via Zoom call". Reuters. Retrieved December 18, 2021.
  22. ^ Goldberg, Emma (January 18, 2022). "Better.com's founder returns as C.E.O. after firing 900 workers on Zoom". The New York Times. Retrieved March 3, 2022.
  23. ^ Azevedo, Mary Ann; Whittaker, Zack (April 7, 2022). "'We probably pissed away $200 million,' Better.com CEO told employees in layoffs meeting". TechCrunch. Retrieved April 10, 2022.
  24. ^ Azevedo, Mary Ann (April 6, 2022). "After mass layoffs, Better.com offers severance, health insurance to employees who voluntarily resign". TechCrunch. Retrieved April 10, 2022.
  25. ^ Foldy, Ben (June 7, 2022). "Better.com Misled Investors Ahead of Stalled SPAC Deal, Former Executive Alleges". The Wall Street Journal. Retrieved June 10, 2022.
  26. ^ Goldman, David (June 8, 2022). "The CEO who fired 900 people over Zoom is accused of misleading investors". CNN. Retrieved June 10, 2022.
  27. ^ "Renaissance Woman: Sarita James '98". Harvard Alumni. Harvard University. March 18, 2015. Retrieved March 3, 2022.
  28. ^ "Executive Leadership". Embark. March 30, 2018. Retrieved March 3, 2022.
  29. ^ NW, charitable organization 1300 L. St; Washington, Suite 200. "Donor Lookup". OpenSecrets. Retrieved July 18, 2022.{{cite web}}: CS1 maint: numeric names: authors list (link)
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