Free Company CEO appears to care extra about management than the corporate, former workers say

In keeping with former workers of human sources startup Free Company, CEO Sherveen Mashayekhi’s management model is holding the startup again as he appears to care extra about demanding loyalty and controlling his workers than constructing an organization.

The New York-based startup launched in 2019 with the novel concept of bringing the expertise company mannequin in style in Hollywood and sports activities to different professions. Founders Alex Rothberg and Mashayekhi have been clearly on to one thing as shoppers rolled in and tech expertise flocked to work on the startup attributable to its mission.

However simply because the startup started to show product market slot in early 2022, co-founder Rothberg stepped again from a day-to-day function. This left Mashayekhi as the only C-suite govt on the firm. Staff mentioned that when Rothberg left, the vibe started to shift.

TechCrunch spoke to 10 former workers and reviewed audio recordings, Slack messages and different supplies from a number of others — each present and former — that present their firsthand accounts of how they felt Mashayekhi’s conduct towards workers began to deteriorate and his focus appeared to shift extra towards aggressive micromanaging and exerting overreaching management.

Our sources mentioned he started to make use of PTO as leverage — the corporate denies this however a number of Slack messages supplied to TechCrunch present Mashayekhi denying PTO and rescinding it in a number of cases — and he advised workers their nights and weekends weren’t “sacred.” Former workers additionally recall him “blowing up” on them or different colleagues if issues weren’t going proper. The corporate denies this, saying that as a result of nature of the enterprise, generally workers would possibly have to work exterior common hours. The corporate additionally denied him yelling at colleagues and mentioned that if something, “Sherveen is overly clear and communicative.”

Tip of the iceberg

Former workers mentioned issues with Mashayekhi prolonged past leveraging PTO. They mentioned he regularly advised them that they have been all replaceable and that he may run the corporate by himself if he wanted to, whereas additionally begging for his or her loyalty. The corporate says this was solely mentioned to a particular worker, however a number of former workers recalled such cases.

“It was clear to me he needed this cult-like following,” one former worker advised TechCrunch. “I felt his finish sport wasn’t truly constructing a profitable firm.”

Former workers mentioned he was obsessive about monitoring what was mentioned behind his again — as soon as calling a gathering as a result of workers had been “whispering” an excessive amount of and he needed to know why, they recalled. They advised him that they have been one another’s help system and he mentioned “you can’t try this. I’m ending it as a result of the fact is it’s hurting the enterprise.”

The corporate mentioned this motion was taken on account of “a number of” workers submitting complaints about exclusionary cliques:

“As any firm would possibly, Free Company encourages a optimistic office through which all group members really feel supported, moderately than a subset of the group garnering or wielding an excessive amount of cultural energy.”

A former worker recalled that after their direct supervisor left, Mashayekhi checked out it as a optimistic as a result of in his eyes, their group wasn’t doing effectively as a result of they “hadn’t been shut sufficient…to my knowledge.”

Mashayekhi wouldn’t delegate seemingly something to his managers or workers, former workers mentioned, conduct they felt was odd contemplating he employed expertise that had expertise within the expertise company or HR fields. The corporate denies this.

“It was unusual; he had no concept what he was doing however wouldn’t let anybody else do actually something,” a former worker recalled.

A former worker mentioned they felt Mashayekhi “would attempt to discover issues that received underneath my pores and skin and dig into these extra” or would purposefully inform somebody’s direct studies adverse issues about them, understanding it could get again to them. The corporate responded that “Sherveen by no means purposefully advised somebody’s direct studies adverse issues about them, understanding it could get again to them.”

Staff felt topic to constant stress and loyalty assessments which took time away from their precise jobs, former workers mentioned. One instance was workers being given seemingly random initiatives simply to check how exhausting they might work. This occasion was highlighted in a TikTok video from a potential worker who mentioned she was turned off by a reference to that within the interview course of. The corporate denies this, but it surely was reiterated by a number of former workers that spoke to TechCrunch.

One other incident, in the course of the firm’s retreat to Denver, was an train the place Mashayekhi paired up workers and requested them to go for a stroll and speak about mission alignment with the corporate. After they returned, Mashayekhi requested them to shut their eyes and lift their hand if their companion wasn’t aligned.

“I used to be interested by McCarthyism,” one worker recalled about that occasion. “Later somebody mentioned that they did open their eyes and so they didn’t see any palms up and [Mashayekhi] freaked out.”

The corporate confirmed this occurred however mentioned that every one the periods have been deliberate with an govt coach beforehand. The employed coach was not current for this train.

Former workers mentioned that this seeming starvation for loyalty and energy didn’t simply contribute to a adverse firm tradition although: It had a dangerous affect on the precise enterprise too.

They reported that Mashayekhi appeared to care extra about what the corporate regarded like on the surface than the way it was run on the within. Former workers mentioned that he spent extra time decking out the corporate’s sizable New York Flatiron workplace with 1000’s of {dollars} of tech, and internet hosting trade occasions, however spending little time on the corporate’s precise enterprise practices or operations. Free Company denies this.

“I needed to manipulate him into taking cash from the shoppers,” one recalled.

Others agreed. One former worker added that they felt he had “virtually zero” emphasis on getting invoices paid, along with his reasoning being that the corporate didn’t really need shoppers to pay — the corporate’s major income stream — as a result of it had investor cash.

What stood out to former workers essentially the most although, of their collective opinions, was his perceived incapacity to just accept his personal function in any of the corporate’s points. Staff reported having a number of conferences about how issues may very well be executed in a different way or be improved, however nothing ever received applied until the concept got here from Mashayekhi himself. The corporate denies this.

“I do know that almost all CEOs are type of narcissistic and loopy however this [was] on a brand new stage,” a former worker mentioned.

When the corporate made its retreat to Denver final summer season, former workers mentioned he began the week off by saying that the corporate would stop to exist in two years if workers didn’t step up. The corporate denies Mashayekhi mentioned this, however acknowledged that he did present a monetary replace, however that it wasn’t directed at worker efficiency. Former workers mentioned it felt in any other case, as a number of sources recalled him saying particularly that they as workers weren’t doing sufficient.

The Free Company group spent the week persevering with by way of a brainstorming train to search out out that Mashayekhi nonetheless didn’t like their concepts, former workers mentioned, and didn’t see himself at fault for any of the problems.

On the final day of the journey, an worker advised him his ego and lack of self-awareness have been what was holding the corporate again. Mashayekhi denies preventing again, however each former worker who spoke to TechCrunch mentioned that he did, and that he later advised new workers that he didn’t agree with what was mentioned about his management. The corporate agrees that Mashayekhi did handle this with new group members.

“His responses to what they have been saying was much more eye-opening, he was so unreceptive,” a former worker recalled. “He refused to take accountability for what he does incorrect. He refused. The easiest way to explain him on this journey can be immature and childlike, unable to carry himself accountable.”

Former workers mentioned that his conduct on the retreat was only one instance of what they perceived as conduct not befitting an organization CEO.

“He would throw me into convention rooms, berate me and make it look like he was the sufferer,” a former expertise agent mentioned. “There was a lack of information that it is a CEO and I’m an worker. He thought we’re equals and he’s deprived.”

Mashayekhi’s conduct sparked six workers final July to take a voluntary severance providing made to those that not felt working on the firm was for them, our sources mentioned, and just one had something lined up. After they left, former workers mentioned Mashayekhi referred to as them names together with “again fats” and “baggage” and regularly disparaged them to new workers. The corporate denied a number of the particular verbiage used:

“Sherveen doesn’t recall ever utilizing or being acquainted with the time period “again fats.” Free Company strives for a performance-driven tradition. After many seen evolutions and adjustments all through 2022, it was important for Free Company management to transparently share context with new group members as to prior group construction, outcomes, methods, and associated points.”

Former workers additionally mentioned they felt that Mashayekhi took it personally typically when workers left the corporate of their very own volition, and would contemplate it a “betrayal.”

The corporate clarified that Mashayekhi would in reality take a few of these cases personally as a result of he thought of a few of these workers to be associates exterior of labor as effectively:

“As is commonly the case with startup founders and their groups, Sherveen established deep relationships with early workers, typically serving as a mentor and buddy. For example, Sherveen was typically invited to gatherings exterior the workplace in social settings like birthday events and dinners with their households. Because of this, Sherveen had extra of an emotional response than might need been warranted when these relationships have been coming to an finish. Sherveen has all the time in the end supplied help to people on their approach out, together with extension of advantages, tools utilization, mentorship, and job search recommendation.”

Former workers’ points stemming from the CEO’s workplace impacted the enterprise from the surface too.

A number of former workers recalled doing chilly outreach as a part of their place and getting replies that individuals didn’t wish to work with Mashayekhi. Some may additionally recall cases they witnessed of Mashayekhi berating or placing down potential companions and sponsors, additional limiting alternatives for the corporate. The corporate responded as follows when offered with these accusations:

“Free Company takes its accountability to construct sturdy relationships with distributors and companions very severely. Oftentimes, and particularly in 2022 and 2023, meaning respectful, aggressive negotiations to make sure that the corporate, group, and end-users are getting the most effective deal doable.”

Total, Free Company denies the characterization of the corporate shared with TechCrunch by former workers, however does acknowledge some cases the place its previous conduct fell wanting expectations:

“Each motion we take, each resolution we make at Free Company won’t all the time be excellent when seen by way of a backwards trying lens. As a younger startup, we’re nonetheless discovering our approach. Occasionally, we are going to stumble, as we have now at occasions in making an attempt to determine and strengthen a client-first, ownership-based tradition inside Free Company.”