From BFFs to open warfare: Better.com’s founder vs. the investor who changed him

“You are the final individual I’m texting tonight—you might be on my thoughts,” interim CEO Daniel Lewis wrote, in line with a log of texts between the 2 reviewed by Fortune. “You are in my coronary heart, whether or not you imagine it or not.”

The two males had a historical past of mutual affection, even when circumstances have been now testing it. In April, Garg texted Lewis about changing into “BFFs” because the pair collaborated. At one level, it appeared just like the engaged investor was simply the enhance Garg wanted to assist flip across the trade he based in 2014 to make getting a mortgage sooner and cheaper on-line, and develop the flagship “Tinman” AI product for approving and shutting house loans. 

Within weeks of the CEO change, nonetheless, the budding bromance was formally lifeless. Garg took Lewis to job in a group chat on X with Better.com buyers, blasting the brand new CEO for working remotely within the South of France as a substitute of the New York City workplace. Lewis hit again with a seven-part thread on X questioning his predecessor’s credibility and calling Garg a “bully.” Better’s board claims the corporate “collected greater than $2 billion in internet losses and misplaced greater than 90% of its worth as a public enterprise” beneath Garg’s tenure.

Lewis ended the X thread with a line summing up his perspective on the connection.

“The love died when the diligence started,” Lewis wrote.

Garg stays on the board for now, and he and his backers are preventing Lewis and the remainder of the board for management over the $230 million firm. The resolution will come all the way down to shareholders together with Activant Capital, Framework Ventures, and SoftBank Capital Partners. Rarely does such a feud spill out into the open. But with management of the publicly traded firm set to be determined by a shareholder vote—the competition deadline is Oct. 20—each males have taken their instances public, by dueling SEC filings, competing threads on X, and press releases. Fortune reviewed hundreds of textual content messages exchanged between Garg and Lewis over 13 months that present how shortly the kinship between a founder and an investor who wished to educate him pivoted into open hostility.

For any founder who has taken exterior cash, or any investor who has gotten shut to at least one, the Garg-Lewis rupture is a cautionary story about how briskly a partnership constructed on shared ambition can curdle—and the way little a boardroom, or a friendship, can do to comprise it as soon as it does.

Behind the curtain

If the identify Better sounds acquainted, it’s most likely because of the PR nightmare that adopted when Garg, in December 2021 through the peak of the COVID pandemic, laid off 900 staff on a Zoom name. Garg was accused of being insensitive and tone deaf in regards to the job losses, which he blamed on a scarcity of productiveness and a collapse in demand for refinancing. “I bought some detrimental press for that,” mentioned Garg, referring to the Zoom name. “But it additionally saved the corporate as a result of the corporate was burning $100 million a month, proper? We had too many individuals.”

The losses didn’t cease after the 2021 layoffs however in recent times they’ve begun to recede. Better’s annual experiences present internet losses of $301 million that 12 months, then $877.1 million in 2022, $536.4 million in 2023, $206.3 million in 2024, and $165.9 million in 2025. Revenue has additionally been on the rise, from $72.3 million in 2023 to $108.5 million in 2024, and $164.9 million in 2025. 

In its annual experiences for 2023 and 2024, Better disclosed a weak point in inner controls after an out of doors legislation agency’s evaluate of the corporate’s tradition discovered that “sure actions taken by our CEO did not set a tone on the prime that supported a powerful tradition of inner controls.” The 2024 report states Garg accomplished govt teaching “to handle behavioral facets of his administration model to the satisfaction of the board of administrators.” The tone-at-the-top weak point and others have been remediated as of Dec. 31, 2025 and Garg famous that the SEC and Consumer Financial Protection Bureau investigated and “discovered nothing” towards him or the corporate.

Lewis, who based asset placement agency Orange Capital 20 years in the past, determined to put money into Better in 2025, changing into one of many largest exterior shareholders (Lewis presently holds a stake between 2% and three% within the firm). From July 2025 to August 2026, Lewis and Garg exchanged no less than 2,000 textual content messages, in line with a log Garg shared with Fortune. The two in contrast notes about tips on how to strengthen Better’s operations, and Lewis provided up investor relations recommendation to Garg. Eventually, their texts spilled over to their private lives and households. Lewis invited Garg out to Nashville and bought him to satisfy up with Lewis and his spouse on the swanky sushi spot Nobu in downtown Manhattan.

The two bonded over their shared ardour for the trivialities of company finance and AI, humblebragging about ducking outdated nights and events in favor of attempting to “3x” in distressed debt trades. 

“Birds of a feather,” Garg wrote to Lewis when he found they each made comparable trades through the Great Financial Crisis.

The two males got here from totally different worlds however shared a love for finance. Garg, 48, grew up in Queens and went to public college, taking his first job at 14 making $6.50 an hour on a Wall Street buying and selling desk, he mentioned. He dropped out of conventional finance in 1998 to strike out on his personal, beginning an internet scholar mortgage firm, MyRichUncle.com, earlier than he based Better.

Lewis, 51, is a die-hard Buffalo Bills fan who completed Cornell at 20 earlier than transferring to Tokyo to work for Citibank. He began on the Salomon Brothers buying and selling ground within the Nineteen Nineties, investing globally in particular conditions (uncommon, one-time occasions that may be deadly for a trade). He ran a hedge fund and later a household workplace, and spent 5 years operating a Toronto software program firm.

Both thrive on the grind. Last 12 months through the holidays, Garg advised Lewis to “have a tequila shot and simply let all of it go” whereas on trip in Mexico. “My means to loosen up is identical as yours,” wrote Lewis. “Doing my greatest.”

In an October 2025 textual content to Lewis, Garg wrote “this time round” he’s specializing in humility and gratitude, and that he printed the 2 phrases out “in large kind and put up on my wall so I don’t overlook.” Garg additionally texted Lewis about his CEO position, writing that he wanted to run management for the direct-to-consumer division’s gross sales tradition “within the kindest approach, a boiler room sweat store.”

“My flaw was hiring and selling similar kind of individuals. So the managers and employees have been associates,” wrote Garg to Lewis. “I want the other. I needs to be associates with the employees. But they need to hate their managers.”

Lewis additionally shared a few of his private victories with Garg, sending him an article about Orange Capital’s asset placement in an actual property asset placement belief that was offered to Hong Kong pursuits in 2016. His feats as an investor, Lewis advised Garg, made him “a very good wingman.”

“I personal the report for quickest management proxy struggle ever—8 days,” wrote Lewis. “It took me 8 days from announcement to take over the board of the most important lodge reit in Canada.”

Lewis repeatedly provided IR recommendation to Garg to share with Better’s govt workforce. He despatched Garg suggestions on draft 8-Okay filings and press releases and tried to maintain Garg from responding to brief sellers on X. In a number of messages, Lewis suggested Garg to “keep above the fray” when it got here to his critics.

“Please be the elevated CEO we wish,” Lewis wrote to Garg in April. “I really like you man,” Garg wrote on March 26, thanking Lewis for speaking to different potential buyers. “You don’t have to be doing this and you might be.”

Lewis replied, “True friendships take years. We are early in ours. I would really like you in my life—ups and downs.” Two weeks afterward April 8, Garg wrote that he was “Hoping to be BFFs!”

The unraveling

By spring of 2026, Lewis had signed an NDA and was extra deeply enmeshed with the corporate than ever, serving to Better with technique. Garg mentioned Lewis was serving to him additional downsize, and the 2 minimize about $1 million a month in bills. A draft memorandum of understanding crafted by Lewis and reviewed by Fortune dated May 2026 describes a plan to discover a board overhaul—with Lewis added as a director—and a revamp of Better’s govt compensation plan with phrases tied to inventory worth, income, and GAAP-based income. The MOU additionally requires cancellation of hundreds of thousands in performance-share unit grants awarded to Better’s board members, canceling the board’s consulting agreements, and lowering the money retainers paid to administrators to “zero or nominal quantity.”

The implied targets of the MOU included Harit Talwar, who has been Better’s board chairman since August 2023. He bought a inventory award valued at $4.1 million, the 2026 proxy statement shows. Another is Prabhu Narasimhan, who has additionally served as a director since August 2023. He bought an award valued at $3.8 million. Neither are impartial administrators and each have consulting preparations with Better. The PSU grants to Talwar and Narasimhan are out of step with governance norms and their complete pay is hundreds of thousands richer than board members are paid at equally sized firms. 

Garg claims Lewis falsely advised the board that Garg supported the plan to rescind their fairness grants and take away half the board.

“I believe that’s how he finally turned the board and these 4 members of the board towards me,” mentioned Garg in an interview. “And then engineered the coup that he did the place he joined the board and… days later ousted me because the CEO and have become the interim CEO himself.”

But in an interview with Fortune, Lewis disputed that he made false claims to the board and referred to as the allegation that he duped Garg and the board “spin.” Lewis mentioned Garg had beforehand advised him the explanation the corporate was failing was partly as a result of the board wouldn’t let him take motion. So Lewis labored on a plan to take away administrators.

But as Lewis started working extra carefully with Better executives, he had an opportunity to see “with my very own eyes” how varied staff have been handled within the firm and the way data and technique have been articulated. Lewis says he quickly got here to a realization: Garg was the issue.

“I’ve by no means in my profession—which is 30 years, concerned particular conditions, distressed operations, buying and selling flooring, hedge funds, and as I mentioned, operating a software program trade—seen a tradition promoted by the CEO that was extra the antithesis of my private values,” mentioned Lewis.

In addition, Lewis mentioned Garg was making guarantees he didn’t finally ship, and constructed a tradition that was misaligned with the modern tech being developed by staff on the firm.

“Late-night texts, swearing campaigns, saying that he was going to disembowel folks publicly as a result of that was the way in which to indicate those that that’s how it is advisable to work, threatening in the event that they’re not on the cellphone for greater than 4 hours a day that he’s going to fireplace them,” mentioned Lewis. “Just an infinite quantity of abhorrent habits.”

Garg denies threatening staff the way in which Lewis described, however acknowledged to Fortune that, within the age of AI, he believes, mortgage officers spending fewer than 4 hours a day speaking to shoppers wanted to be “coached up or coached out.”

“Daniel has made a behavior of twisting my phrases,” wrote Garg. “The larger query is – what has he ever achieved himself and the way does that assist in what he can do for higher as its CEO.”

By August, tensions had reached a boiling level. The two males differ of their accounts of what exactly went down, however the details are that on July 27 Lewis officially joined the board. On August 3, Garg stepped down as CEO, efficient instantly, and the board appointed Lewis to function CEO on an interim foundation. Says Lewis: I “believed that with out a vital change in management, we might by no means be capable of understand our potential and that was unanimously accepted by the board,” mentioned Lewis. “Not my agenda, however what all of them agreed wanted to occur.”

‘My cellphone begins blowing up’

When Garg bought phrase he was out, he was suggested to stay “calm and picked up.”

“They thought I used to be going to go bananas,” mentioned Garg. His ouster occurred on a Monday and on Tuesday, Garg mentioned he “was free.” He went to brunch on the Lower East Side at 10 within the morning after which to drinks in Soho within the afternoon, adopted by a stroll by the West Village.

“It’s been 30 years since I had a Tuesday afternoon within the center [of the week] at no cost,” mentioned Garg. “And then, my cellphone begins blowing up.”

The information of Garg’s departure had been introduced after Monday’s inventory market shut, and within the ensuing hours Better’s inventory worth cratered 37%. Agitated buyers have been messaging Garg. 

Garg mentioned he left Better quietly as a result of he didn’t wish to danger his means to boost capital sooner or later. But with the inventory tanking, and Garg nonetheless on the board, he says he couldn’t assist however become involved.

On a Zoom name that Wednesday, Garg mentioned he bought a suggestion to stay with the corporate by a transition interval, and met up for lunch on Friday with two board members who mentioned his ouster was a mistake. Garg claims it was the board members who gave him the thought to get majority help to make modifications to Better’s board if he may muster the votes. Garg mentioned he now feels he was coerced into leaving his chief govt publish at Better.

Documents reviewed by Fortune present an e mail despatched from Better’s company secretary to Garg on August 6, cc’ed to the board’s compensation and nominating committee, plus Talwar. The message, despatched to Garg’s Gmail account, included an attachment with proposed transition phrases for Garg to obtain $450,000 in pay, $300,000 of fairness in lieu of wage through the transition interval, vesting on 575,000 excellent efficiency share models (PSUs), and a brand new grant of 200,000 PSUs for service as vice chair, plus the board would take into account one other 100,000 PSUs. The settlement was by no means accepted and Garg says he turned it down.

After Garg’s ouster, the tone of his texts to Lewis grew ice chilly. “My household is asking me about my medical health insurance. Would you please advise me on that. Thank you.” wrote Garg, in line with texts seen by Fortune. “It’s embarrassing.”

Lewis requested Garg to “kindly” cease emailing him a number of instances a day and requested that Garg cease contacting Better staff, prospects, and buyers. Lewis inspired Garg to “search steering” from his govt coach on the distinction between a board position and an govt position.

“Vishal. Remember, each transfer you make—I’ve deliberate for it prematurely,” wrote Lewis on Aug. 11. “#boyscout.”

When Better printed a press release on Aug. 14 calling Garg’s management harmful and stating the corporate had GAAP internet losses exceeding $1.5 billion since 2022, Garg  fired back on X: “#Bubkis. Yeah that’s Boy Scout for FAKE NEWS. Sacre bleu Daniel, I believe the French air is attending to you.”

The struggle for management

As the 2 duke it out, clamor in regards to the Better board and its means to supervise the corporate is rising amongst buyers. Better’s inventory has but to regain the misplaced worth that adopted Garg’s departure. The board can be being scrutinized as a result of it signaled to shareholders an amicable, orderly handover from Garg to Lewis, solely to sow chaos by taking it again a number of weeks later and claiming Garg was “unfit” to steer Better because of his conduct.

Garg is asking shareholders to remove 5 of Better’s eight administrators, together with Lewis and board chairman Talwar. If he succeeds, Garg and two different board members could be the one ones left, though it’s not clear that will be an apparent win for Garg. One of the board members who would stay is Hugh Frater, former CEO of Fannie Mae and a founding accomplice at BlackRock. Frater has mentioned he’ll step down if Garg returns in any kind of govt capability. The different remaining director, Michael Farello, is contemplating stepping down from the board in 2027, which would go away Garg largely in management, the corporate has mentioned. Garg says a brand new board may rent a CEO with stronger {qualifications} than Lewis, and he would take a product and innovation position for himself.

If the present board prevails, Lewis will keep on as interim CEO whereas a search committee he doesn’t have a job on will work to discover a everlasting CEO successor. Lewis says Better will slender its focus to wholesale lending, house fairness strains of credit score, and partnerships with client platforms.

In an interview, Lewis mentioned he’s additionally centered on cultural change at Better, and plans to champion its know-how and staff. “It is of course the time for us to go from a founder-led firm based mostly on daring guarantees, into the way forward for execution, which is a really totally different set of expertise,” mentioned Lewis. The plan is “to coalesce this workforce round a imaginative and prescient the place we are able to generate sustainable profitability versus simply being a dreaming digital finance that sometime can be worthwhile.”

As for the proxy advisory corporations who advise shareholders on such issues, ISS and Glass Lewis suggest buyers help the present Better board. ISS said in its report that the corporate has misplaced the “majority of its worth beneath [Garg’s] management” and Glass Lewis pointed to “extended worth erosion” throughout Garg’s tenure. Conversely Egan-Jones advisable that shareholders vote for Garg’s group. Its report states that cumulative complete shareholder return was detrimental 53% since Better’s August 2023 public debut, whereas the previous two years present optimistic 14% complete shareholder return, which is proof that the tech-led technique, together with Tinman AI, has begun gaining traction.

The contest deadline is October 20. On Friday, Garg announced a slate of three administrators to work alongside him on a newly refreshed board: Kleiner Perkins accomplice Bing Gordon, L Catterton senior advisor David Heidecorn, and Activant Capital’s Steve Sarracino. As shareholders ponder which facet to again within the ongoing vote, the one factor clear at this level is that the friendship between Garg and Lewis is formally misplaced, in line with each events.

“I believed Daniel was my buddy,” mentioned Garg in an e mail. “And then he proceeded to earn my belief and backstabbed me within the worst attainable approach.”