Zenefits grew faster than almost any startup ever — until it emerged the founder had built a tool to help salespeople skip the insurance licensing they were legally required to complete.
Conrad personally built the cheating tool and misled investors; he bears primary responsibility.
The growth-at-all-costs culture — funded and celebrated by investors — created the incentives that produced the shortcuts.
Co-founder and CEO who drove Zenefits' explosive growth — and built a software tool that let salespeople bypass insurance-licensing training requirements. Resigned amid the compliance scandal; later founded Rippling.
Co-founder and CTO; built the product. Later co-founded Rippling with Conrad.
PayPal/Yammer veteran who was COO and became CEO after Conrad's ouster, tasked with fixing the compliance culture before leaving later that year.
Andreessen Horowitz general partner who backed Zenefits and held a board seat during its hyper-growth and the scandal.
0 of 4 have put their version on the record.
Parker Conrad and Laks Srini found Zenefits, giving away HR software free and earning money as the customer's insurance broker.
Backed by Andreessen Horowitz and others, Zenefits grows explosively and raises a ~$500M round in May 2015 at a $4.5B valuation — hailed as one of the fastest-growing SaaS companies ever.
Many Zenefits salespeople sold insurance without proper licenses. Conrad built a tool to bypass California's pre-licensing training requirement. Conrad resigned in February 2016 and later settled with the SEC. Investors had celebrated Zenefits' extraordinary growth before the scandal.
Conrad personally built the cheating tool and misled investors; he bears primary responsibility.
The growth-at-all-costs culture — funded and celebrated by investors — created the incentives that produced the shortcuts.
Unresolved: How to apportion responsibility between the founder and the incentives investors set.
Investors renegotiate their stakes and Zenefits' valuation is cut sharply (roughly in half, then further), acknowledging the growth had outrun its compliance.
Conrad and Srini found Rippling, an HR/IT platform that becomes a multibillion-dollar company — a founder rebound after a public downfall.
That the failures reflected a whole industry's 'move fast' culture — encouraged by investors chasing growth — not just one founder's misconduct.
The SEC and the company held Conrad personally responsible for building the licensing tool and misleading investors; the board removed him and overhauled compliance.
Many Zenefits salespeople sold insurance without proper licenses. Conrad built a tool to bypass California's pre-licensing training requirement. Conrad resigned in February 2016 and later settled with the SEC. Investors had celebrated Zenefits' extraordinary growth before the scandal.
Conrad personally built the cheating tool and misled investors; he bears primary responsibility.
The growth-at-all-costs culture — funded and celebrated by investors — created the incentives that produced the shortcuts.
Unresolved: How to apportion responsibility between the founder and the incentives investors set.
Many Zenefits salespeople sold insurance without proper licenses. Conrad built a tool to bypass California's pre-licensing training requirement. Conrad resigned in February 2016 and later settled with the SEC. Investors had celebrated Zenefits' extraordinary growth before the scandal.
Conrad personally built the cheating tool and misled investors; he bears primary responsibility.
The growth-at-all-costs culture — funded and celebrated by investors — created the incentives that produced the shortcuts.
Unresolved: How to apportion responsibility between the founder and the incentives investors set.
Ousted 2016; settled with the SEC; founded the far larger Rippling.
Co-founded Rippling with Conrad.