News

The Party is Over for Mike Rothenberg

James L. Flint

• November 17, 2023

Mike Rothenberg, once known as the lively venture capitalist of Silicon Valley, has now been convicted on 21 counts of defrauding investors. He used their investments to finance his extravagant lifestyle, fund a racing team, and throw lavish parties for tech founders.

Rise to Fame

At the age of 39, Rothenberg made a name for himself in Silicon Valley starting in 2012. He founded Rothenberg Ventures Management Company LLC, a venture capital firm that invested in prominent companies such as Space X, Robinhood, Bustle Digital Group, and numerous virtual reality firms.

A Life of Luxury

Even in his early 30s, shortly after graduating from Harvard Business School, Rothenberg began hosting glamorous events. He treated his clients to Super Bowl experiences, booked the entire San Francisco Giants’ baseball stadium for day-long events, and organized hot-air balloon rides over Napa Valley vineyards for tech giants.

The Aftermath

Rothenberg's charismatic lifestyle allowed him to attract over $50 million from more than 200 investors. His reputation skyrocketed, earning him the title of “The Valley’s Party Animal” in a profile published by Bloomberg News.

The party, however, has come to an end for Mike Rothenberg. He now faces the consequences of his actions as he has been found guilty of defrauding investors.

Rothenberg Faces Serious Consequences for Fraudulent Activities

In 2016, Michael Rothenberg, formerly a prominent figure in Silicon Valley, found himself at the center of a scandal involving the misappropriation of investor capital. Prosecutors alleged that he deceitfully redirected funds, originally intended for specific investments, towards personal projects, including the development of a racing team and his own venture business.

The Securities and Exchange Commission (SEC) took action against Rothenberg in 2018, charging him with fraud. Their investigation revealed that a staggering $18 million of investor money had been misused. In January 2020, Rothenberg reached a settlement with the SEC, agreeing to pay $31 million in restitution and fines. Consequently, he was prohibited from participating in the securities industry for a duration of five years.

However, these penalties were just the beginning of Rothenberg's legal woes. Later in the same year, he was indicted on criminal fraud charges in federal court in San Francisco. Despite an initial trial resulting in a hung jury, a retrial concluded last Thursday with Rothenberg being found guilty on all 21 fraud charges.

In addition to defrauding investors, Rothenberg was also convicted of deceiving Silicon Valley Bank by providing false information about his fund's financial position on a loan application.

Looking ahead, Rothenberg faces the prospect of significant punishment. He is likely to receive a lengthy prison sentence, along with millions more in fines. The sentencing is scheduled for March of next year.