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What Bitwise Told Potential Lenders as It Tried to Raise Cash Before Employee Furloughs



Bitwise co-CEO Jake Soberal sent local business leaders glowing reports on the company recently while soliticing bridge loans to ease its financial crisis. (GV Wire Composite/Paul Marshall)
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In the days before Bitwise furloughed its entire workforce, company co-CEO Jake Soberal was busy calling, texting, and emailing local business leaders in hopes of obtaining bridge loans to navigate through a financial squeeze.

Soberal’s pitch to two of the bridge-loan prospects offered sky-high interest rates. In addition, one of the prospects received documents indicating that Bitwise had cleared nearly $25 million after expenses and taxes for a 15-month period ending March 31 of this year.

GV Wire News Director Bill McEwen contributed to this story.

These documents indicated that Bitwise, a tech and real estate company, was outperforming its financial plan and it ended the first quarter of 2023 with nearly $68 million in cash with assets totaling $184 million.

But, in one email reviewed by GV Wire, just a few weeks ago, Soberal sought a $2 million loan, with 12% interest, to be paid back in 120 days. That meant the lender would receive a $240,000 return on investment on top of the principal in just four months — an annual interest rate of 36%.

Watch: GV Wire’s David Taub Interviews Bitwise co-CEO Jake Soberal

Soberal, a licensed attorney, asked another prospect for $5 million. Initially rebuffed, he then sought $1 million. The prospect, however, told GV Wire on Wednesday that he declined to advance Bitwise any funds. Neither did the other prospect interviewed by GV Wire.

Both prospects spoke to GV Wire on the record but not for attribution. GV Wire reviewed emails and documents to confirm the accuracy and the details of the loans that they said Soberal sought.

Neither Soberal nor co-CEO Irma Olguin Jr. returned GV Wire’s request for comment on this story.

Why Would Bitwise Need Loans?

The loan sought from the first prospect was to be secured by shares in Bitwise from Soberal and co-CEO Irma Olguin Jr. Soberal said the pair — Bitwise’s founders — owned 12 million of the company’s 132 million shares, a value he said of $27 million. In addition, Soberal said that by his estimation, the company was worth about a half billion dollars.

So, why would a company making millions and purported to be on solid financial ground by its co-CEO need to borrow a few million more dollars at hard-money rates? Especially a company that had reported raising $157 million over the past four years?

Soberal told the prospects that Bitwise was under a time-and-money crunch involving a potential investment from Goldman Sachs, a firm that previously had invested in Bitwise.

“As I shared we are raising debt to avoid missing a minimum-cash-on-hand covenant that would jeopardize a $100M transaction with Goldman Sachs,” Soberal wrote in an email to one prospective lender.

Soberal said that whether the deal with Goldman Sachs closed or not, the investor would be repaid in cash. He also said that “the company completed a financing led by Goldman that valued the company at $380M. Based on performance since that time we believe the company has a present value of ~$500M.”

However, GV Wire has since learned from a source familiar with Bitwise’s agreement with Goldman Sachs that the giant investment firm held less than 5% of the company’s equity.

In addition, the source said, “ As a minority investor, there are no liquidity covenants or any similar restrictions in the documents for (Goldman Sachs’) investment.”

Bridge loans sought by co-CEOs Jake Soberal pledged 12 million shares in Bitwise owned by Soberal and co-founder Irma Olguin as collateral. (GV Wire File)

Bitwise’s Financial Problems

As previously reported by GV Wire, cracks in Bitwise’s financing came to light last week. In addition to furloughing its employees, the company is late on a $122,000 payment for Fresno County property taxes, and $500,000 late on its lease payment for three buildings.

The company switched from direct deposit for its employee paychecks last week to paper versions. Bitwise, in its message to employees on Monday, said those checks may not be good.

And, documents sent to GV Wire indicated that Bitwise had failed to deposit employees’ 401(k) retirement money — taken from paychecks — into the proper accounts.

Lawsuit Filed Wednesday

A new lawsuit filed Wednesday seeks $33 million from Bitwise Industries for a failed business venture.

Filed by Texas-based NICbyte LLC, the lawsuit alleges that Bitwise and several of its subsidies “concealed from Plaintiff their intentional breaches of the joint venture agreement and self-dealing to the tune of tens of millions of dollars, in violation of their duties under the joint venture agreement, wherein — among others — Defendants encumbered the assets of the joint venture with unauthorized loans accruing to their personal benefit.”

The lawsuit cites media reports of Bitwise’s trouble and asks the Fresno County Superior Court for swift action.

“Defendants cannot be trusted,” the lawsuit alleged.

Also on Wednesday, The Buffalo News reported on the impacts of Bitwise’s furloughs there.


Curiosity drives David Taub. The award-winning journalist might be shy, but feels mighty with a recorder in his hand. He doesn't see it his job to "hold public officials accountable," but does see it to provide readers (and voters) the information needed to make intelligent choices. Taub has been honored with several writing awards from the California News Publishers Association. He's just happy to have his stories read. Joining GV Wire in 2016, Taub covers politics, government and elections, mainly in the Fresno/Clovis area. He also writes columns about local eateries (Appetite for Fresno), pro wrestling (Off the Bottom Rope), and media (Media Man). Prior to joining the online news source, Taub worked as a radio producer for KMJ and PowerTalk 96.7 in Fresno. He also worked as an assignment editor for KCOY-TV in Santa Maria, California, and KSEE-TV in Fresno. He has also worked behind the scenes for several sports broadcasts, including the NCAA basketball tournament, and the Super Bowl. When not spending time with his family, Taub loves to officially score Fresno Grizzlies games. Growing up in the San Francisco Bay Area, Taub is a die-hard Giants and 49ers fan. He graduated from the University of Michigan with dual degrees in communications and political science. Go Blue! You can contact David at 559-492-4037 or at Send an Email