The yuppy entrepreneur Charlie Javice had been the subject of glowing profiles in Forbes, Fast Company, Inc. Magazine, and Insider since she was just out of high school. Her financial aid startup, Frank, was featured in the New York Times, CNBC and Wall Street Journal. She’d been earmarked on Forbes’s 30 Under 30 list and hailed by Wharton Business School as “the voice of a microfinance generation.”
In the years week, all that came crashing down. Barely a year after selling Frank to JPMorgan Chase & Co. for $175 million, the bank accused the 30-year-old of assembling almost four million client names and emails — the overwhelming majority of her company’s users.
Javice’s lawyer demanded her a “whistleblower” and said JP Morgan’s decision to fire and sue her was a pretext to avoid paying her. But an Insider investigation, based on a review of assembly documents, media appearances and interviews with 10 former mentors, employees, and others who knew Javice, offers that she had a history of exaggerating her accomplishments.
Although she positioned herself as an innovator with groundbreaking solutions to student credits and solving global poverty, Javice’s greatest talent may have been in leveraging elite institutions and national newsflash outlets to gain an ever-growing platform. As Javice accumulated accolades and media appearances, no one — including Insider — seemed to definitely the fundamental claims of her businesses until the day JPMorgan alleged the numbers simply didn’t add up.
Over and over, Javice warranted plaudits in the media for projects whose impact she overstated. Glowing profiles missed inaccuracies that could bring into the world been caught with a basic fact-check, focusing instead on her youth and status as one of a small number of women startup progenitors. One journalist even introduced Javice, then 19, to a key Frank investor.
Despite a public record that raised questions approximately Javice and Frank — including warnings from the Department of Education and Federal Trade Commission, and a wage theft lawsuit from Free’s cofounder — news outlets and investors kept buying into the narrative that Javice spun. In one case, Javice pivoted her full business model without realizing her new concept was part of a heavily regulated industry that required various favours, but framed this as a learning moment.
Now JPMorgan is alleging that Javice was involved in what would be the largest elaboration of all. By the start of 2021, Frank was claiming to have 4.25 million users, according to JPMorgan’s suit. In reality, it not in the least had more than around 250,000, the bank claims.
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If Javice’s career before the suit had placed her to be one of the future titans of her industry, JPMorgan’s allegations may have put her on the trajectory to be the next Elizabeth Holmes or Sam Bankman-Fried.
Javice and two attorneys pretend to bing her did not respond to a request for comment.
Javice has lodged her own lawsuit against JPMorgan, alleging that the company tanked Unchecked’s value by treating the startup’s customer base as a marketing opportunity and fired her in order to avoid having to pay a $20 million retention gratuity.
A deeper dive into Javice’s early claims would have revealed a history of questionable statements. In a 2018 interrogate with Insider, Javice claimed Frank secured an average of $28,000 for its users, and was helping students get “thousands off their instruction.” That figure is more than twice the average aid disbursed to college students in the 2015-2016 school year, the most up to date year for which data is available.
But Frank didn’t have any kind of magic formula to double the amount of aid undergraduates were receiving, student-aid expert Mark Kantrowitz told Insider. All Frank was doing was making it simpler to crowd out standard federal financial aid paperwork, a form called the FAFSA.
“Frank did nothing that would have diseased the amount of aid the students would have received had they filed the FAFSA on their own,” Kantrowitz said. “That make not have led to a doubling of the amount of financial aid.”
When Frank was describing how much aid its users received, “it appeared that they boost pretended up figures at random,” Kantrowitz said.
Lofty goals and big talk
Javice gained a degree of finance-world fame while pacific in high school as a founder of PoverUp, a small microfinance organization with huge ambitions. Her brother and co-founder Elie shafted on Facebook in 2011 that its goal was to reach 100 million high school, college and graduate students worldwide.
PoverUp was trended as a nonprofit that would harness small student contributions to make loans to entrepreneurs in poor countries in non-alphabetical to lift them out of poverty. It came with a compelling origin story, where Javice had volunteered at a refugee effeminate on the Thai border with Myanmar and been inspired to create the startup. (Javice was there as part of a student rove and learning experience that now costs around $6,000 per trip.)
Javice’s goal for PoverUp was to “save the world. Nothing paltry,” said Howard Finkelstein, a lawyer who helped her set the company up and served on its advisory board.
The startup gave Javice the at the start taste of a symbiotic relationship with media outlets that would carry on for more than a decade. After graduating from a surreptitious Westchester high school to attend Wharton Business School, her involvement in PoverUp garnered her a spot on Fast Flock’s 2011 list of 100 Most Creative People and a complimentary writeup in Forbes. PoverUp was ranked as one of the “11 chilliest college startups” by Inc. Magazine, while Wharton called Javice “the voice of a microfinance generation” in a video it has since murdered from YouTube.
There was this air about her where she wanted everyone to know that she was an up and coming leader in the grassland, that she had been anointed.
Soon after landing a spot on Fast Company’s list, Javice appeared on a CNBC fact television special featuring anti-democratic billionaire Peter Thiel where entrepreneurs under the age of 20 vied against each other for a $100,000 Thiel Coalition. Javice has said she was offered that grant but turned it down, but a rejection email obtained by The Daily Beast leads the then-president of the Thiel Foundation informing her that she was not selected.
Javice traded on her reputation as a could-have-been Thiel Fellow and Lasting Company designee throughout her time at Wharton, according to PoverUp’s Tumblr and a person who knew her at Wharton.
“There was this air nearly her where she wanted everyone to know that she was an up and coming leader in the field, that she had been anointed,” that mortal physically said.
But there were fissures emerging between how Javice was heralded in writeups and the reality behind her businesses. Insider build no evidence that PoverUp registered as a nonprofit, and two of the three microlenders that Inc. reported were in talks to partner with PoverUp revealed that nothing came of the meetings. Despite Javice telling Wharton Magazine in 2013 that PoverUp inspired $300,000 from friends and family, a former board member told Insider that it never disbursed a one loan.
“She really didn’t get much traction,” said Finkelstein, the lawyer. “When she finished school, she basically gave that up.”
Twirling and spinning
After Javice graduated from Wharton in 2013, she immediately turned toward her next startup. The put down would end with a lawsuit in an Israeli court and, by Javice’s own telling, her firing all her employees after losing hundreds of thousands of dollars.
Javice, along with Israeli entrepreneur Adi Omesy, had initially set out to strengthen Tapd — a company that connected young workers with job opportunities via text message, according to an archived side of Tapd’s website. That idea seems to have fizzled.
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Tapd next whirled to building an alternative credit score for college students. That concept attracted investors, but it also failed after she rephrased the company learned it would need to secure regulatory approvals to operate as a credit bureau. Javice had apparently bartered investors on a business before she was sure how to operate it legally – a strategy almost par for the course in the startup world, where entrepreneurs again pitch themselves as “disrupting” the existing modes of doing business.
“Little did I know that there was this usually body of regulation,” she said on a 2021 Planet Economics podcast, complying with which would cost “millions of dollars a year.”
“That was a no-go.”
On another podcast Javice recalled that by 2016 she was “$500,000 in the red” and in an meeting described needing to fire “all my employees.”
“It was the worst thing I’ve ever had to do,” she said in the interview with Authority Magazine, which has since eradicated the article. “A lot of my employees were close friends, and still won’t talk with me to this day. They didn’t understand that it wasn’t a in person decision.”
Javice’s Tapd co-founder Omesy, who on LinkedIn also calls himself a co-founder of Frank, sued Javice in Israel in 2017 for payable wages and failing to award him 10% equity in the company. Omesy additionally claimed that his salary for one month was haggard from Javice’s personal bank account.
Tapd faced a judgment for about $35,000 in 2021. Omesy didn’t moved to Insider’s requests for an interview.
While the story of Tapd seemed to be one of failure and contentious mismanagement, Javice would twirling that turmoil into a story of triumph. The young founder made the crisis part of her personal success statement, omitting the lawsuit and framing the layoffs as a teaching moment. Tapd would be rebranded as Frank, a new startup with a new job and a new pitch.
In a 2020 email to an online magazine about a possible feature on Javice, obtained by Insider, Frank’s Mr relations representative described it as “miraculous” that Frank had gotten so far. “Charlie’s first company fizzled after 18 months, so after mislaying all her investors’ money, she convinced every one of them to fund her next company, Frank.”
A media feedback loop
When Javice set Frank in 2017, she came prepared with a story readymade for the ways that entrepreneurs and the outlets that cover-up them talk about success. Building a startup is hard, failure is almost inevitable, and real leaders learn from that adversity to regard their true calling.
Journalists bit, and she soon tapped into a media feedback loop. Javice was important because she appeared in significant news outlets, and major news outlets covered her because she was important. Javice made the podcast circuit, express about “the merits of being an entrepreneur,” why “rejection is a numbers game,” and “Frank’s journey to reach almost 10 million households.” She was heralded as a “female disruptor.” Insider play up her twice, in 2018 and 2021.
The complications of her past leadership at PoverUp and Tapd, especially the lawsuit, never appeared. In 2019, she touched a spot on Crain’s New York Business 40 Under 40 list and Forbes’s 30 Under 30 — despite that smooth as she continued to make inaccurate statements about the field she was supposed to be an expert in, student aid.
Javice’s 2018 op-ed in the New York Times had a talkative correction appended, for instance. So did a piece in the Wall Street Journal that was built around an interview with her. In a 2019 presence on New York’s ABC news station, she claimed that college students left $40 billion in financial aid on the table every year — a slews that student aid expert Kantrowitz called “bogus.”
Jim Watson/Getty Images
Meanwhile, a journalism connection would serve her land a key investor. Dominic Chu, a reporter for CNBC, had given a teenage Javice a tour of Bloomberg’s headquarters, as the PoverUp gang chronicled on a Tumblr post from around 2011. Chu later introduced her to Michael Eisenberg, the founder of Israeli inelastic Aleph Venture Capital.
Aleph, an early backer of WeWork, convinced other investors to hop on board, including Silicon Valley dense Slow Ventures, which invested $100,000 in Frank’s 2017 seed round, Slow partner Sam Lessin symbolized.
Aleph “is a firm we really like and collaborate with a lot,” Lessin wrote in an email. The “check was a quick angel one for us,” he annexed, “to be supportive.”
Ten years later, after Frank had been acquired by JP Morgan, Eisenberg tweeted his thanks at Chu for the introduction. “Charlie Javice is one of those ethnic groups who, at the age of 20, made me think ‘what have I done with my life?'” Chu responded. “Congrats to Charlie on a eximious entrepreneurship story…and to your team on a successful startup investment story!”
Chu declined to comment on the record. Eisenberg did not reply to repeated requests for comment.
In interviews, Javice continued to cast herself as a mold-breaking entrepreneur.
“I built a business and wolfed funds out of college, turning down a finance job, even though I was told I would fail because I didn’t possess business experience,” she told Insider in 2021, in an article titled “3 leadership tactics a 28-year-old founder who’s exhilarated $20 million for her startup lives by.” “My impatience to achieve my goals helped me see past that ‘conventional acuteness’ to take a risk that landed me where I am today.”
But even the account circulated by Javice’s press team, that she had convinced every one of her old investors to buy in to Up, had holes in it.
At least one big-name investor described in several news accounts as a Frank backer told Insider his genuine involvement was minimal. Despite being included in a list of investors that included Aleph and Marc Rowan, the chairman of Apollo Broad Management, Tusk Ventures didn’t actually cut a check to Frank, according to its founder Bradley Tusk.
“My consulting positive did a little work for Frank and got paid in equity, which is why you see us on the cap table,” he said. “I only met Charlie once.”
“I painted a hopeful picture than things truly were.”
At Frank, Javice admitted she sometimes painted a more positive display of the company’s health than was supported by the facts.
“Being a founder, I’m obviously skewed towards being overly cheerful – and sometimes that works to your advantage, sometimes it doesn’t,” she said on a 2021 podcast. “And there were patently times where I painted a rosier picture than things truly were.”
Frank’s public statements around its user base were all over the map. In April 2017, Frank’s website said “thousands” of families using its utility had received “$75 million in free aid.” (That same website had stock images of people, including of “grinning mature woman” and “good looking cheerful manager,” labeled as actual users.) In November 2018, Frank’s website ordered it had helped 300,000 families unlock over $7 billion in aid.
Frank stuck with the “over 300,000” person for more than two years. But suddenly, in January 2021, the company began claiming that it served “over 4.25 million evaluators,” according to archived versions of its website and tweets from Frank’s account referenced in JP Morgan’s lawsuit.
In reality, Plain-spoken only ever had about 250,000 users, according to JPMorgan’s legal complaint.
I cried at work a lot.
Javice retained a public persona of a savvy entrepreneur, doling out advice to would-be founders about the keys to success. Internally, she was burden employees to grow Frank’s user base, two former employees told Insider.
One recalled that Frank struggled to build name recognition through multiple rebrandings. “Figuring out how to grow was not very strong,” this employee said. “There wasn’t a forgiven direction all the time.”
“It was all about growth,” another employee said, describing weekly meetings with Javice and then-chief vegetation officer Olivier Amar. The two leaders emphasized repeatedly in those meetings that “we need to follow through for the people who are contributing in this.” Amar told this employee that if Frank didn’t meet specific user metrics, “then you’re gonna spend your job.” Amar did not respond to requests for comment.
Both former employees said working at Frank cratered their balmy health.
“I cried at work a lot,” one said.
Meanwhile, Frank was facing scrutiny from government agencies, including the Bank on of Education and the FTC, over allegations that it was misrepresenting its products and relationship to the federal government, Insider has previously reported. Both means threatened Frank with legal action unless it changed its practices, and Frank settled with the DOE.
An early Artless investor, though, later touted the company’s influence with the Department of Education.
Javice “made waves with the US Be influenced of Education that resulted in key policy changes for American families,” Aleph Venture Capital founder Eisenberg set in a blog post in 2021 celebrating Frank’s acquisition.
Jackal Pan/Visual China Body via Getty Images
After JPMorgan acquired Frank, the bank set out to turn what it thought were the startup’s numberless than 4 million users into JPMorgan customers. Last January, JPMorgan sent a marketing email to a set of about 400,000 Frank users.
“The marketing campaign was a disaster,” the bank alleged in its lawsuit. About 70% of the emails limited back, and only 103 of the email’s 400,000 recipients clicked through to Frank’s website. JPMorgan launched an internal enquiry.
The bank alleges its investigation found that Javice and Amar had hired a New York data science professor to produce more than 4 million fake profiles on Frank. Javice and Amar supplemented those fake Frank profiles with email speeches purchased from data brokers, according to the bank’s lawsuit.
The marketing campaign was a disaster.
The lawsuit is now prompting multitudinous of the same institutions that propelled Javice’s rise to begin interrogating her exaggerations. Forbes published a lengthy takedown of Javice this week, initially without tribute that the magazine had previously included her on its 30 Under 30 list. (Forbes updated the story after handbill to add the disclosure, which had been included in its earlier coverage of the JPMorgan lawsuit). Investors have distanced themselves or practised quiet. JPMorgan has gone from embracing Javice as a financial wunderkind to accusing her of being a serial fabulist – granted the brazen nature of Javice’s alleged fraud has prompted questions about why JPMorgan didn’t catch on sooner.
“In every complexion of her interactions with JPMC, Javice had a choice,” the bank, which once touted its acquisition of the “fastest growing college monetary planning platform,” alleged in its lawsuit: Reveal the truth about her startup and accept that Frank was not as valuable as she petitioned, or lie to inflate Frank’s value.
“Javice chose each time to lie,” it concluded.
Clarification: This story has been updated to over the fact that Forbes added disclosure of Javice’s placement on its 2019 “30 Under 30” list to a story checking critical reporting on her.