Better.com CEO Vishal Garg has admitted to employees that he “personally guaranteed” the $750 million cash infusion provided to the online mortgage lender last November in an email MovieUpdates saw.
Let’s start at the beginning. Last May, Better.com announced that: it went public via a SPAC that would value the company at nearly $7 billion. Then on November 30, the company announced: that blank check company Aurora Acquisition Corp. and SoftBank decided to change the terms of their financing agreement to: Offer Better half of the $1.5 billion they committed immediately instead of waiting for the deal to be finalized.
But what was not then revealed, if Fortune reported last week was that when SoftBank raised that $750 million in November, it was Garg — not the company as a whole — who took responsibility for compensating the Japanese investment conglomerate for any losses.
Specifically, an S-4 filing from Aurora states: “The Better Founder and CEO, in his personal capacity, has agreed to enter into a side letter with SoftBank under which he may be liable for realized losses or receive payments in certain circumstances of SoftBank in connection with the Post-Closing Convertible Notes, which could divert the resources and attention of the Better Founder and CEO of our company and adversely affect his personal financial situation.”
Notably, the amount of losses covered by the side letter is unlimited, and Garg “remains responsible for all such losses, which would require him, among other things, to sell a significant portion of his holdings in Better Home & Finance common stock. , which could negatively impact the trading price of Better Home & Finance common stock.”
As noted above, in response to details of the settlement being made public, Garg sent an email — viewed by MovieUpdates — to all current Better employees acknowledging personal responsibility for that $750 million cash infusion. In the email, he admitted that he “personally guaranteed” SoftBank $750 million of the $1.5 billion that SoftBank had pledged to invest last November because he “wanted the capital to build our dream,” knowing that “the world was about to get ugly.” He wrote:
I may be a fool, but I believe in us. I believe in you. I believe in our mission. I believe in our vision. And I believe that we are the only people on this planet who will do everything we can to make home ownership better, faster, cheaper and possible for everyone everywhere…. I am totally committed to everything I own and will ever own….Five years from now, when that $750 million SoftBank loan matures around my 50th birthday…if that means I have nothing. Well, at least we’ll have given it a real shot… This is true. I personally have three quarters of a billion dollars surety and I am personally liable for that.
Meanwhile, multiple sources have also shared that in recent weeks Better.com has offered its employees in India the option to leave on the basis of a voluntary separation agreement. Apparently, more employees raised their hands — a reported 90% of 2,100 — than the company expected and had to put a limit on the number of employees who could leave.
Sources said it was mostly “closers and analysts” who were allowed to leave, and a total of about 920 employees were laid off. One person shared an email from HR India rejecting their request, saying the employee was “part of a mission-critical team” at Better. A separate email to the company’s operations team outlining a structural reorganization said the need to offer the company’s Indian employees voluntary separation was due to the acknowledgment that “decreases in ahead and responding to these to ensure Better is positioned for profitability remains essential.”
MovieUpdates has reached out to Better.com for comment.