myCFO.com redux

MyCFO was an extremely high profile start up in the personal financial services space that was backed by Silicon Valley royalty. Their basic premise was to move the entire family office into an online experience, catering to the tech-savvy dot com millionaires who were being created each hour during the tech boom of the late 90s. Since we competed around that space, I was always curious as to how their model would play out. Their vision of a personal concierge service, private jet rentals, tax advice, online brokerage, and accounting all delivered via the web seemed way ahead of its time, but the vision was so bold it bore attention.

When you read about them, their revenue and assets under management seemed compelling. I cynically assumed that the only customers and assets that they had were the founders, John Doerr, Jim Clark, Jim Barksdale. When they shut down, I assumed that it was just the exhaustion of the tech bubble bursting, an idea ahead of its time, bold but too aggressive for the time.

How wrong I was. I wasn't cynical enough. It was all a big tax dodge for the founders. It's emails like this that people should never forget:

Mr. Doerr was a booster for the firm's tax strategists. In response to Mr. Doerr's 2001 email lauding the tax team for its performance -- which he sent on Sept. 11, 31 minutes before the first plane struck the World Trade Center -- the tax team's leader reported landing $4.5 million more in fees. Five days after 9/11, Mr. Doerr replied: "This is AWESOME news, particularly during a week marred by national tragedy.... Please keep me posted."

And never far from malfeasance in the Valley is Larry Sonsini, of course. He adopts the exact same position he trotted out during the recent HP fiasco, and during the options backdating scandal here:

A spokeswoman for Mr. Sonsini said his law firm did basic legal work for myCFO that didn't include reviewing its tax offerings

Of course you didn't, Larry. The firm hired Wilson Sonsini, the most expensive white shoe law firm in the Valley to write their procedure manual. What a joke.