Former AngelHack CEO Greg Gopman was just as toxic towards his own startup as he was towards homeless people. In a lawsuit filed this month in California State Superior Court, his cofounder Sabeen Ali claims that Gopman used money from AngelHack's bank accounts to pay for personal expenses including his $4,500/month apartment rent, credit card debt, as well as "elaborate vacations" in Thailand and Colombia.
It wasn't just for pleasure, though. Gopman also allegedly broke into Ali's company accounts, purported to fire all of AngelHack's employees, and prevented communication with clients. In short, the claims in the lawsuit sound like a flawless execution of a cofounder's worst nightmare.
According to the complaint (embedded below), Gopman and Ali began to discuss Ali taking over the role of CEO last November because Ali was doing most of the work. The agreement was signed right around the time Gopman decided to post a public Facebook rant against San Francisco's neediest residents.
That's when the alleged misuse of funds began:
Since signing the Agreement, defendant has failed to cooperate in good faith in order to undertake these required corporate actions. Instead, over plaintiff's repeated objections, defendant has unlawfully accessed the Corporation's bank accounts and distributed substantial company monies to himself to pay for personal expenses—notably, one distribution amounted to $70,000, which was used to pay off credit card debts. On information and belief, plaintiff alleges that that the defendants's company credit card debts included personal living expenses and elaborate vacations abroad in Thailand and Colombia. Plaintiff is informed and believes that not only has defendant paid his personal apartment rent out of company funds ($4,500 per month), but he has pocketed $2,500 a month in rent received from a roommate without reimbursing the Corporation.
Dicking over your roommate in the process, my that's some multitasking.
The lawsuit also claims that Gopman "took affirmative action to harm" AngelHack by removing Ali from the company bank accounts without authorization and trying to illegally access another AngelHack account with Silicon Valley Bank.
There's more mayhem where that came from. Ali accuses Gopman of:
(c) Changing all AngelHack corporate account information and passwords to critical systems and social media accounts all of which are of critical importance to AngelHack's ongoing operations: including AngelHack's GoDaddy account (host of angelhack.com), Gmail account, Twitter account, Facebook account, Mailchimp account, AngelHack blog, and Evenbrite account
(d) Emailing all AngelHack employees purporting to fire them and plaintiff; and
(e) Illegally accessing plaintiff's corporate email account, reading and forwarding numerous emails to himself for the purpose of misappropriating proprietary and confidential legal, financial and personal information.
Ali claims that Gopman also accessed the AngelHack email server and changed her credentials so that she couldn't get into her contacts or calendar and therefore couldn't communicate with customers, investors, and partners, and had trouble keeping appointments.
In November, Gopman sent out a cheery company-wide email announcing Ali's promotion, calling himself "a builder" to Ali's "Do'er":
Attention Attention Everyone,
Some big news! I would like to announce effective December 14, 2013, Sabeen Ali will be taking over as CEO of AngelHack and I will be stepping down as master and commander of our ship. I'm a builder and I feel like the majority of my work here is done. I have a couple big projects I want to begin and I feel like my main work getting this thing off the ground is done.
I'm sure all of you know Sabeen by now. She's been the Do'er behind the scenes making all the wheels turn for some time now . . .
He followed through on the title change. But the lawsuit says Gopman refused to recognize the part in the agreement that made Ali the majority shareholder, with a 51 percent in AngelHack and reducing his share to 49 percent.
Adding salt to the wound, Gopman's alleged spree of startup misdeeds came after the Facebook outburst that cost AngelHack clients, sponsorship partners, and more:
On December 11, 2013, an unfortunate event occurred that was very damaging to the Corporation. Defendant posted a hateful message on his Facebook page viciously demeaning the homeless residents of San Francisco. Defendant's post was widely disseminated and soundly criticized, bringing shame and disrepute on AngelHack and its employees and associates. As a result of defendant's public gaff [sic], AngelHack and its employees experienced immediate international backlash, resulting in the loss of numerous clients and sponsorship partners and in AngelHack's employees, including plaintiff, receiving volumes of hate mail from around the globe.
Ali is suing Gopman for breach of contract, specific performance, declaratory relief, injunctive relief, and interference with prospective economic advantage. But even though the suit says Gopman has "acted with malice, fraud, and oppression," it's not clear that Ali or AngelHack will be able to recover much from him. Because she has not been issued the proper stock in the company:
...plaintiff has no adequate legal remedy. AngelHack is a privately held early-stage, event-based company with virtually no hard assets. AngelHack's true value at present is as a potential target for future outside investment or acquisition due to its uniquely successful hackathon model. There is no 'fair market value' of AngelHack as a going concern. Further, plaintiff is instrumental in running AngelHack as well as marketing its services to the industry. Without plaintiff, AngelHack will likely fail and any nascent opportunity will be scuttled. Damages, if awarded, cannot be properly ascertained since there is no fixed market value and damages will be inadequate to compensate plaintiff for the detriment suffered by her in the event that she is excluded from this opportunity which at this point in time remains speculative at best.
Despite running a company that puts on hackathons, Gopman confessed in a recent Medium post that he only just started teaching himself how to code. Hopefully he'll learn fast enough to be able to make next month's rent without dipping into the AngelHack accounts. Wouldn't want to end up one of those homeless "degenerates."
Update: In response to questions, Greg Gopman sent the following statement to Valleywag:
I can't discuss an ongoing legal matter, but I will say all those allegations will be disproven through the facts of our financials.