Vishal Garg has retained Alex Spiro and secured majority shareholder support to force a board shake-up at Better.com, arguing the company is near profitability.
Vishal Garg, the founder and former CEO of Better.com, is pushing to take back control of the company he started. He has retained high-profile attorney Alex Spiro and secured support from shareholders representing a majority of the company's voting power, according to a letter sent to the board of directors.
Garg is demanding that all directors other than himself, Michael Farello, and Hugh Frater resign. In their place, he wants a newly constituted board that will immediately implement a plan focused on profitability, shareholder value, and long-term leadership. His counsel has told the board that the shareholder declarations can be provided to the company's outside counsel on an attorneys'-eyes-only basis to confirm he has the votes.
The push follows a period of significant volatility in Better's shares after recent leadership changes. Garg believes the current valuation fails to reflect the operational improvements already underway. If the board does not voluntarily make the requested changes, Garg and his supporting shareholders are prepared to call a special meeting.
Garg's argument for a turnaround rests on the company's cost structure. Better has reduced the cost to originate a loan from roughly $12,000 to less than $3,000 by scaling its Tinman AI platform. He has also implemented a cost-reduction plan that started at $25 million and was expanded to $45 million in August. Technology partnerships established during his tenure with Coinbase, Intuit Credit Karma, and OpenAI are expected to create additional distribution channels.
In a statement, Garg said the company is at an inflection point. "We spent years rebuilding this company around technology, dramatically lowering the cost to originate a mortgage and putting Better in a position to scale," he said. He said he is prepared to work for a salary of $1 until the company is profitable, invest another $30 million alongside shareholders, and finish the turnaround. Once that work is complete, he said the board should select a permanent CEO and he will move into a product and innovation role.
Garg also believes that absent the macroeconomic effects of a disruption in the Strait of Hormuz, Better would currently be generating roughly $5 million to $10 million in positive adjusted EBITDA per month. The company has provided over $100 billion in home financing and raised over $1.75 billion in equity capital from backers including SoftBank, L Catterton, Kleiner Perkins, Goldman Sachs, Ally Bank, American Express, Citi, and IA Ventures.
Before founding Better, Garg started 1/0 Capital, an early-stage investment firm. He also co-founded MyRichUncle.com, the first online student lender, which he built into the fourth largest publicly traded private student loan company in the U.S. He previously worked as an investment banking analyst at Morgan Stanley.
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