'Party animal' of Silicon Valley Mike Rothenberg convicted of 21 counts of investor fraud

By Lukas I. Alpert

The venture capitalist was accused of misappropriating millions to finance his flashy lifestyle, race car team and lavish parties for tech founders

The party is over for Mike Rothenberg.

The high-flying venture capitalist dubbed the "party animal" of Silicon Valley was convicted Thursday of 21 counts of defrauding investors by taking their money to finance his lavish lifestyle, build a racing team and pay for the over-the-top parties he threw for tech founders.

Rothenberg, 39, made a name for himself in the Silicon Valley scene starting in 2012 through his venture capital firm, Rothenberg Ventures Management Company LLC, which invested in companies such as Space X, Robinhood (HOOD), Bustle Digital Group and a multitude of virtual reality firms.

While still in his early 30s, and only a few years out of Harvard Business School, Rothenberg hosted clients at the Super Bowl, booked the San Francisco Giants' baseball stadium for all-day events, and flew tech poobahs over Napa Valley vineyards in hot-air balloons.

This helped him attract more $50 million from over 200 investors in his funds, and led to Bloomberg News dubbing him "The Valley's Party Animal," in a profile.

But in 2016, prosecutors say Rothenberg began misappropriating investor capital, claiming it would be invested in one thing, but then steering it into other projects such as a racing team he was trying to build, and into accounts used to operate his own venture business.

In 2018, he was hit with charges from the Securities and Exchange Commission accusing him of fraud after determining that $18 million of investor money had been misused. He eventually settled with the SEC in January 2020, agreeing to pay $31 million in restitution and fines. While he admitted no wrongdoing, Rothenberg was barred from working in the securities industry for five years.

Later that year, he was indicted on criminal fraud charges in federal court in San Francisco. An initial trial ended with a hung jury, but Rothenberg was convicted of all 21 fraud charges in a retrial that ended Thursday.

In addition to stealing from investors, Rothenberg was also convicted of defrauding Silicon Valley Bank by lying on a loan application about his fund's finances.

Rothenberg faces decades behind bars and millions more in fines when he is sentenced in March next year. A message sent to Rothenberg's attorney wasn't immediately returned.

-Lukas I. Alpert

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11-17-23 1149ET

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