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Startup Cofounder Faked Invoices to Hit Unicorn Status, Feds Say

Aug. 25, 2021, 5:19 PM

Tech startup HeadSpin Inc.'s cofounder and former CEO inflated key financial metrics to convince investors to fork over around $80 million, according to DOJ and SEC federal court filings in California made public Wednesday.

Manish Lachwani created fake invoices and altered real ones in order to push HeadSpin’s valuation above $1 billion, making it a “unicorn,” the Justice Department and Securities and Exchange Commission say in criminal and civil suits filed in the U.S. District Court for the Northern District of California.

“The SEC’s complaint makes no reference to the extensive evidence showing that Mr. Lachwani acted in good faith ...