Net worth: $2.7B (Forbes, March 2020)
Eric Lefkofsky is a cofounder of Groupon, the husband of a Biden donor, and somebody who a website less concerned about libel litigation might refer to as "The King of Pump and Dumps".
Born September 2, 1969 in Southfield Michigan, Lefkofsky is the son of a structural engineer and a school teacher. Details about his upbringing are sparse but it appears his father owned his own structural engineering firm, making his background modest but comfortable.
Lefkofsky’s storied business career began in college when he used a connection to a friend’s father’s carpet company to sell carpets to underclassmen at the University of Michigan. By the time he graduated he was making $100,000/year from the venture.
His real business career began after he graduated from law school in 1993 when he and his college friend Brad Keywell secured a loan from "Friends and Family LLC" to purchase Brandon Apparell, a clothing company in Madison, Wisconsin. The company grew rapidly then went bust, leaving Lefkofsky and Keywell with a sizable fortune and lawsuits from Johnson Bank, the former owner of Brandon Apparrell, National Football League Properties, Major League Baseball Properties, and the city of Columbus, Wisconsin. In the latter case the city alleged that they loaned the company $750,000 to create jobs in the city but that the company shut down shortly after securing the loan, though not before compensating Lefkofsky and Keywell handsomely for their efforts.
In 1997 Lefkofsky and Keywell moved on to start the corporate tchotchke company Starbelly, which had a similar trajectory of massive growth, handsome compensation for the founders, and explosive collapse with an accompanying string of lawsuits. In one such lawsuit, an internal email surfaced where Lefkofsky laid out his business philosophy:
Lets start having fun. Lets get funky... let's announce everything... let's be WILDLY positive in our forecasts... lets take this thing to the extreme... if we get wacked [sic] on the ride down-who gives a shit... THE TIME TO GET RADICAL IS NOW... WE HAVE NOTHING TO LOSE…
Lefkofsky continued a string of new companies including InnerWorkings (2001, described in the Wall Street Journal as "a glorified broker of print jobs"), Echo Global Logistics (2005), and MediaBank (2006). One employee at InnerWorkings was a young man named Andrew Mason who, with Lefkofsky’s backing to the tune of $1 million, started an activist-centered website called ThePoint.com in 2007.
The Point was intended to be a social networking website for collective action, but it was unprofitable and unable to gain traction outside of Chicago, so Lefkofsky pushed them to transition to a model where a group of people could collectively secure a discount on a product or service. This idea didn’t come from Lefkofsky, but users of ThePoint.com. Groupon grew out of this idea and quickly followed the pattern of Lefkofsky’s previous business enterprises, expanding to dozens of cities and becoming the fastest-growing company in history.
Leading intoto Groupon’s 2011 IPO, Lefkofsky violated SEC guidelines meant to prevent pump and dump schemes by telling reporters that Groupon was going to be "wildly profitable". In reality, Groupon lost $413 million in 2010. It was also found that Groupon’s accounting led to their revenues being counted as gross revenue instead of net revenue, meaning that the expense of paying a business their portion of a Groupon deal was not taken into account. Further, due to massive payouts to Lefkofsky and other founders, the company was technically insolvent leading into Groupon’s IPO.
In the first year after the IPO Groupon lost 80% of its value. As of March 2020, Groupon had lost 95% of its value and was listed by Yahoo Business as its "March 2 bear of the day".
Lefkofsky has since minimized his role at Groupon and is currently focusing on his new start-up Tempus, which seeks to bring big data to medicine. In advance of its IPO, Lefkofsky is telling the press, "We’re generating significant revenue".
INSIDE GROUPON: The Truth About The World's Most Controversial Company (Business Insider)An overview of the rise of Groupon up to and immediately following the IPO.
The Checkered Past of Groupon’s Chairman (Fortune Magazine)A general background of Eric Lefkofsky.