The news of his resignation was due to inadequate compliance procedures and lack of internal processes' which are necessary for an insurance based startup. By last fall, Zenefits had about 1,600 employees and had raised over $500 million from investors including venture-capital firm Andreessen Horowitz and Fidelity Investments. How is it possible that a very regulated industry lets a startup reach such growth?
Parker Conrad has resigned as chief executive of health-insurance brokerage Zenefits after coming under fire for what the highflying startup says was inadequate compliance procedures and internal controls. The company, which last May was valued at $4.5 billion just two years after Mr. Conrad founded it, said Monday that David Sacks, the chief operating officer, would take over. In a strongly worded letter to employees announcing Mr. Conrad’s departure, Mr. Sacks criticized the culture and business practices created by his predecessor. “The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong,” Mr. Sacks said in the letter. “As a result, Parker has resigned.”
unknownx500
