Vishal Garg (businessman)

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For the energy researcher, see Vishal Garg.

Vishal Garg
Born1977 (age 46–47)
Nationality (legal)Indian-American
Occupationentrepreneur
Known forCEO of Better.com
co-founder of MyRichUncle
SpouseSarita James
Websitewww.vishal-garg.com

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[edit]

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 in the Investment Banking Department at Morgan Stanley as an analyst.[3]

Career[edit]

MyRichUncle[edit]

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 co-founded a student finance company in 2000 that became the online student loan provider MyRichUncle, which grew to employ 300 people and became the second largest private student lender in the United States.[4] The company went public in 2005 on the NASDAQ.[5] Khan's brother provided an initial capital investment.[1][6] 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.[7][8]

Embark, Future Finance, Climb Credit, and EIFC[edit]

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.[9] Beginning in August 2009, they also jointly led a new asset-backed securities team at Aram Global, an asset recovery firm.[10] 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,[11] and Climb Credit, targeted at US programs with relatively lower costs and higher graduate employment rates, with Zander Rafael and Amit Sinha in 2014.[12]

Following MRU Holding’s bankruptcy, Khan and Garg co-founded 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. [13] Garg later filed a counterclaim against Khan for mismanagement of EIFC related to Khan’s decision to file certain lawsuits against Garg.[14] 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.[15] Garg filed a conversion counterclaim stating that Khan refused to reimburse Garg for charges he incurred on EIFC’s American Express card. The conversion counterclaim was granted, and Khan was ordered by the court to pay EIFC $28,319.75.[16] Khan has since filed an appeal and a motion for reconsideration arguing that Garg willfully misled the court in the Khan v. Garg case based on contradictory testimony he gave in a federal case filed by PIMCO, Citigroup, US Bank, and Goldman Sachs against businesses Garg controls.[17][18][19][20]

Better.com[edit]

In 2014, after a frustrating experience trying to obtain a mortgage, Garg founded Better.com, an online mortgage broker backed by venture capital from Goldman Sachs, Kleiner Perkins, Softbank, Ally Bank, American Express Ventures, and others.[21][1][22]

At an early stage, he acquired Avex Funding of California to provide the new company with licenses and an operating platform to originate mortgages online in the continuing aftermath of the financial crisis.[22] The company’s online product offering was successful and led to over 800% growth in 2020 from $100 million in revenue to $800 million in annual revenue.[23] In October 2022, the company announced that it surpassed $100 billion in loans funded, the first fintech company to reach that milestone.[24] In 2021, Better raised additional capital at a $7.7 billion valuation.[25] Since its founding, Better has also originated more than $38 billion in insurance, and over $3 billion in real estate transactions.[26]

Better was named Best Online Mortgage Lender for Robust Online Lending by Forbes in 2024,[27] and Best Mortgage Lender for Affordability by the Wall Street Journal in 2023,[28] and ranked #1 on LinkedIn’s Top Startups List for 2021,[29] and 2020[30] #1 on Fortune’s Best Small and Medium Workplaces in New York,[31] #15 on CNBC’s Disruptor 50 2020 list,[32] and was listed on Forbes FinTech 50 for 2020.[33]

In August 2021, The Daily Beast estimated his equity in Better.com to be worth at least $1 billion.[34] However, as of April 2024, Garg’s equity in Better.com was valued at $22 million.[35]

In 2023, Better went public on the NASDAQ under the symbol BETR.[36] However, given the large increase in U.S. interest rates from 2021 to 2023, Better's stock price fell drastically immediately after going public.[37] Still, in Better’s earnings release for 1Q24, the company announced that its revenue and loan volume grew over 25% compared to the previous quarter.[38]

Garg has won numerous awards for his work at Better, including Goldman Sachs Most Intriguing Entrepreneurs in 2018,[39] HousingWire Rising Stars in 2017,[40] and E&Y Entrepreneur of the Year in 2020.[41]

In addition to awards, Better has undertaken charitable community service efforts to make homeownership more accessible for all Americans, including its Better Home Giveaway, which awarded a home to a family who struggled with purchasing a house and who had an impact on their local community.[42] The company also provides qualifying customers access to HOPE Grants, giving families cash for down payments and home purchasing costs.[43]

On stage at the Inman Connect conference in January 2023, Garg announced the world’s first One Day Mortgage.[44] In February 2023, the company partnered with Amazon, and announced Equity Unlocker, a product that allows Amazon employees to use their company shares as collateral when purchasing a home, without having to liquidate their stock.[45]

Controversies

Khan alleged that Garg misappropriated both funds and proprietary software to launch Better.com. When questioned about the source of his income during a deposition in December 2019 in the Khan v. Garg matter, the transcript shows that Garg threatened to "staple him against a fucking wall and burn him alive" and subsequently made threats against Khan's family. Garg apologized later in the same session.[1][34] In June 2020, a group of investors in the Phoenix structure controlled by Garg also filed suit alleging diversion of funds through a venture capital firm founded by Garg called 1/0 Capital.[1] After Garg testified in the PIMCO / US Bank/ Citigroup federal case that he intended to take another $5M in bonuses from the Phoenix structure for himself and his associates,[46] and he failed to produce annual audits for Phoenix, a supermajority of the Phoenix investors voted to remove Garg from the Phoenix General Partner.[47] Garg has counterclaimed alleging that the vote was null and void, and that he should remain in control of the Phoenix General Partner.[48]

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][49] 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.[6][49][50][51][52] 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".[53][54] He stepped back as CEO, returning in January 2022 after the company conducted a review of its internal culture.[55] A video subsequently emerged of Garg blaming himself for "overhir[ing]",[56] 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.[57] 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.[58][59] As of April 2024, Better won a judgment against her and her complaint was voluntarily dismissed with prejudice.[60]

Personal life[edit]

Garg lives in Manhattan with his wife, Sarita James,[61] and three children. In 2021, he launched a partnership with the Fund for Public Schools in NYC, donating nearly $2M to purchase Chromebooks, iPads, Wi-Fi hotspots, books, and uniforms for New York City public school students from low-income backgrounds.[62] The project supported over 30,000 students learning online during the COVID-19 pandemic. In 2022, Mr. Garg won the Golden Pegleg award from Stuyvesant High School Alumni Association for his charitable works related to economically disadvantaged children.[63]

Sarita James began working at Embark in early 2014,[64] became its president in early 2015[65] and as of March 2022 is its CEO.[66] Embark was sued by the Icahn School of Medicine at Mount Sinai in November 2014 alleging claims for fraud, breach of contract, conversion and other claims, stemming from Embark's failure to remit application fees that were collected by Embark on behalf of Mount Sinai.[67] The lawsuit was later settled.[68] The Phoenix investors have also alleged in their lawsuit that Garg diverted funds from Phoenix to capitalize Embark in late 2016 after receiving bank statements in that lawsuit.[69] Garg has disputed any wrongdoing associated with the movement of funds.

According to OpenSecrets, Garg has made numerous donations to the Democratic Party and its candidates.[70]

See also[edit]

References[edit]

  1. ^ a b c d e f g h 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. ^ Cremades, Alejandro (June 20, 2019). "At 26 Years Old He Brought His First Company Public And Now Built A $550 Million Business". Forbes.
  5. ^ Cremades, Alejandro (June 20, 2019). "At 26 Years Old He Brought His First Company Public And Now Built A $550 Million Business". Forbes.
  6. ^ a b Graziosi, Graig (December 6, 2021). "Who is Vishal Garg, the CEO that fired 900 employees over Zoom call?". The Independent.
  7. ^ Kamenetz, Anya (December 20, 2006). "16. Raza Khan and Vishal Garg: MyRichUncle". Fast Company. Retrieved March 4, 2022.
  8. ^ "Raza Khan and Vishal Garg". Business Week. March 13, 2006. Archived from the original on April 10, 2006.
  9. ^ Rivard, Ry (July 3, 2014). "Troubles at Embark". Inside Higher Ed. Retrieved December 8, 2021.
  10. ^ Thetgyi, Olivia (November 2, 2009). "New Advisory Launches ABS Group". GlobalCapital.
  11. ^ Keane, Jonathan (September 22, 2018). "Future Finance's new chief wants to take the Dublin company beyond student loans". Fora. Retrieved May 7, 2022.
  12. ^ 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.
  13. ^ "FILED: NEW YORK COUNTY CLERK 07/02/2013". Retrieved December 14, 2023.
  14. ^ "FILED: NEW YORK COUNTY CLERK 01/09/2017 03:45 PM". Retrieved December 14, 2023.
  15. ^ "Khan v Garg" (PDF). January 16, 2023. Retrieved May 23, 2023.
  16. ^ "Khan v Garg" (PDF). April 13, 2023. Retrieved May 23, 2023.
  17. ^ "FILED: NEW YORK COUNTY CLERK 04/25/2023 04:35 PM". Retrieved December 14, 2023.
  18. ^ "Raza Khan vs Vishal Garg". Retrieved December 18, 2023.
  19. ^ https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=NhzrJrWo6X4wYsUIVIn/vw==(registration required)
  20. ^ https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=IEWl7tsvsRwqoRFynoA4TA==
  21. ^ Rudegeair, Peter (February 9, 2017). "Lender Better Mortgage Gets New Kleiner Perkins Funding Valuing Firm at $220 Million". The Wall Street Journal.
  22. ^ a b Rudegeair, Peter (June 12, 2016). "Online Lender's Secret to Success: Past Failure". The Wall Street Journal. Retrieved March 3, 2022.
  23. ^ Weinberg, Cory (September 23, 2020). "Better.com Seeks to Ride Refinancing Wave to a $4 Billion Valuation". The Information.
  24. ^ Martinez, Andrew (August 23, 2023). "Better.com leaders on going public: 'We've been through war together'". National Mortgage News.
  25. ^ Tsai, Diana (October 20, 2021). "How Better.Com Quietly Became A $7.7B Unicorn: Personal Insights From Founder Vishal Garg". Forbes.
  26. ^ "Better Home & Finance Holding Company Announces Fourth Quarter and Full Year 2023 Results". Better Home & Finance Holding Company Investor Relations.
  27. ^ Campisi, Natalie (May 1, 2024). "Best Online Mortgage Lenders Of May 2024". Forbes.
  28. ^ Yale, Aly (March 24, 2023). "The Best Mortgage Lenders". The Wall Street Journal.
  29. ^ "LinkedIn Top Startups 2021: The 50 U.S. companies on the rise". LinkedIn News. September 22, 2021.
  30. ^ "LinkedIn Top Startups 2020: The 50 U.S. companies on the rise". LinkedIn News. September 22, 2020.
  31. ^ "65 Best Small and Medium Workplaces in New York". Fortune.
  32. ^ "These are the 2020 CNBC Disruptor 50 companies". CNBC. June 16, 2020.
  33. ^ Sharf, Samantha (February 12, 2020). "The Future Of Real Estate: Fintech 50 2020". Forbes.
  34. ^ 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.
  35. ^ "Vishal Garg". MarketScreener. April 29, 2024.
  36. ^ Mishkin, Shaina (August 24, 2023). "Better Just Went Public at a Bad Time for Mortgage Lenders. The Stock Was Down 93%". Barron's.
  37. ^ Volka, Maria (May 14, 2024). "Better's financials remain in the red, but revenue, loan volume grow". National Mortgage News.
  38. ^ Mendoza, Candyd (May 14, 2024). "Better's revenue surges in Q1 2024, but profits remain elusive". Mortgage Professional America.
  39. ^ Lloyd, Alcynna (October 18, 2018). "Goldman Sachs honors Better Mortgage CEO Vishal Garg". HousingWire.
  40. ^ "2017 Rising Stars: Vishal Garg". HousingWire. June 1, 2017.
  41. ^ "EY Announces Winners for the Entrepreneur of the Year 2020 New York Award". EY.com.
  42. ^ Washington, Julie (December 22, 2023). "Family wins $500,000 to buy Solon home in Better Home giveaway". Cleveland.com.
  43. ^ "The Better Home Giveaway". Better.com.
  44. ^ Carter, Matt (January 25, 2023). "Vishal Garg is back, with plan to save Better: The 'One Day Mortgage'". Inman.
  45. ^ Mattioli, Dana (February 28, 2023). "Amazon Employees Will Be Able to Use Stock as Collateral for Home Loans". The Wall Street Journal.
  46. ^ https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=bkGbHyXE58Ng/RLeYTPBGw==
  47. ^ https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=MZru3mn2PPQv7DeBUP7hNA==
  48. ^ https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=HM_PLUS_Ry_PLUS_1LQB8xo4lqc3qJKQ==
  49. ^ a b Timmins, Beth (December 7, 2021). "Vishal Garg: US boss fires 900 employees over Zoom". BBC News business. Retrieved December 8, 2021.
  50. ^ 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.
  51. ^ Sweeney, Don (December 5, 2021). "Hundreds join company's pre-holiday Zoom call — to be told they've lost their jobs". Sacramento Bee.
  52. ^ "WATCH: Better.com CEO Vishal Garg fires 15% of its workforce over Zoom call". The Tribune. Chandigarh. December 6, 2021. Retrieved December 8, 2021.
  53. ^ 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.
  54. ^ Nishant, Niket; Dasgupta, Shounak (December 9, 2021). "Better.com CEO apologizes after laying off 900 employees via Zoom call". Reuters. Retrieved December 18, 2021.
  55. ^ 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.
  56. ^ 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.
  57. ^ 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.
  58. ^ 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.
  59. ^ Goldman, David (June 8, 2022). "The CEO who fired 900 people over Zoom is accused of misleading investors". CNN. Retrieved June 10, 2022.
  60. ^ Nunes, Flavia (May 8, 2024). "Former top executive withdraws lawsuit against Better.com and its founder". HousingWire.
  61. ^ "Renaissance Woman: Sarita James '98". Harvard Alumni. March 18, 2015.
  62. ^ "Helping Stuyvesant Restart During the Pandemic". Stuyvesant.
  63. ^ "2022 BENEFIT FOR STUYVESANT - OUTSTANDING PEGLEG IN SUPPORT OF NYC PUBLIC SCHOOLS". Stuyvesant.
  64. ^ https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=J0lzPnEVXlNoIDHLlaKYeQ==
  65. ^ "Renaissance Woman: Sarita James '98". Harvard Alumni. Harvard University. March 18, 2015. Retrieved March 3, 2022.
  66. ^ "Executive Leadership". Embark. March 30, 2018. Retrieved March 3, 2022.
  67. ^ https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=_PLUS_0CDczfurj7PRlmI_PLUS_KbciA==
  68. ^ https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=J0lzPnEVXlNoIDHLlaKYeQ==
  69. ^ https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=M_PLUS_58eQLfX1fnVYc8gbRVVw==
  70. ^ 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)

External links[edit]

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