Jetsmarter Bribes Journalists / President arrested for Grand Theft Embezzlement
The arrest of a former top executive on unrelated Grand Theft Embezzlement charges and the shifting of CFOs raise questions about Jetsmarter, the Unicorn aviation startup founded by Russian native Sergey Petrossov (28). Steven Kreit, a partner at accounting firm EisnerAmper who is in charge of its New York commercial audit and assurance practice, was quoted in Forbes as saying they should, especially at a unicorn-sized company. While not familiar with the specifics of JetSmarter , he said, “It raises my red flags.”
With recent press surrounding bribes of Journalists for positive reviews (TheVerge), it is becoming apparent that Jetsmarter has a problem with ethics and corporate governance within its corporate culture. The last time we saw a CFO get arrested for enriching themselves and people getting bribed we ended up with a company called ENRON.
Hyper successful Startups have always had problems with culture, just look at the week Uber had (CNN). The problem with Jetsmarter is that all of this comes way too early in the company’s short history, and on the heels of a recent $105 million raise, led by the Saudi Royal family. I am sure someone at their family office is sweating bricks right about now. As an investor my first question would be… “Where is my money? Is it actually being used for the business? Or is it being used to pad the lifestyles of the founders?”
And by no means is that uncommon. I have seen entrepreneurs get caught up in their own delusions that investor money are actually profits. Paying themselves huge salaries, bonuses, company cars and even flying on private jets. Fact is, that while your company is burning your investors’ cash, you should be the symbol of frugality and a leader that projects a morally sound company culture. The biggest issue I have with Jetsmarter is that every time I talked to a Jetsmarter sales person they told me they flew a private jet to their sales location — this time a table in a hallway at a Tony Robbins Business Mastery event in Las Vegas. Then they try to convince me that flying on a King Air is the same as flying on a Learjet. As a serial entrepreneur and CEO of three successful startups I just wanted to shake these kids and ask them “What the f*ck is wrong with you people?” Firstly, I would never have my sales team fly on a private jet — not when jetBlue offers flights for $39 one-way. Secondly, don’t mislead your customers. This is just one example that raises my own red flags about any potential investment opportunity with them. I just can’t support a company that wastes money, where the thought is, “Hey we have Saudi oil money — lets live a little.”