In the heart of Silicon Valley, where startups rise and fall in dramatic fashion, a bitter dispute is unfolding over the future of HealthTap, a telehealth pioneer. Four former employees of the company have filed a lawsuit against Mohr Davidow Ventures (MDV), a venture capital firm, accusing it, its delegate board members Bill Ericson and Bill Gossman, and other board members including the Chief Executive Sean Mehra, of using predatory tactics to devalue the company and seize control. This new case has sparked fresh concerns about the power dynamics between startups and their investors.
HealthTap began its journey almost a decade and a half ago, emerging as one of the early leaders in telehealth technology. The company’s platform connected patients with licensed doctors for virtual consultations, offering a novel and accessible form of healthcare. By 2018, HealthTap was a rising star, valued at nearly $1 billion serving blue-chip enterprise clients, including world leading insurance companies, Fortune 500 companies, and top healthcare providers. For its employees and early investors, it was a company with a clear mission and a bright future.
But the lawsuit tells a dark story of what happened next. According to the plaintiffs, MDV orchestrated a corporate takeover in 2018, installing Bill Gossman, an MDV affiliate, as CEO. The plaintiffs allege that under Gossman’s leadership, HealthTap shifted from its successful enterprise-focused model to an untested direct-to-consumer strategy, a move that they claim was designed to drive the company into financial distress.
The suit further alleges that MDV engaged in intentionally wasteful spending and packed the company’s leadership with its own allies, all while diluting the shares of employees and minority shareholders through a series of undervalued equity deals. Over the next 3 years, MDV converted millions in debt into preferred shares, securing majority control of the company. Meanwhile, lucrative acquisition offers— reportedly valuing HealthTap at hundreds of millions—were ignored or rebuffed, leaving employees to watch their hard work evaporate into worthlessness.
The plaintiffs are suing MDV, its principals, and HealthTap’s CEO in a Delaware Court on behalf of the company itself and all other shareholders including employees, consultants, and investors who got diluted to almost zero by the aforementioned practices.
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