Amol Sarva, founder and ousted CEO of Knotel, has become more outspoken about his regrets with his company’s recent dealings with Newmark, who recently purchased the flexible office firm.
In February, it was announced that Newmark would take over Knotel and provide $20 million in debtor-in-possession so the flexible office company can go through bankruptcy proceedings.
However, Sarva’s appearance on YouTube web series The Business of Business revealed that he believes the company’s collapse was primarily caused by nepotism and the “dog-eat-dog” nature of the industry. He added that it was his own poor decisions that led the company to be in someone else’s hands.
According to Sarva, Newmark CEO Barry Gosin approached Knotel operators saying they wanted to support the company. Knotel was then introduced to investment bank Cantor Fitzgerald, whose founder and chairman Howard Lutnick is also the chairman of Newmark.
Late last year, Sarva claimed Knotel’s venture lender TriplePoint Capital had sold its debt, although a refinancing plan was in the works. He then learned that it was Newmark who had purchased the debt.
After this, Sarva says he was told that the company was in default and on the cusp of being foreclosed on.
“[They said] you’re going to have to shut down your whole business, or we can lend you another $20 million now on the condition that you bankrupt the company, run an auction for it and let us buy it,’” said Sarva. “It was just like, consummate Wall Street.”