Wednesday, June 7, 2023

The list of investors in Bitwise is reveals dozens of trusts, venture capital firms and individuals - some from Kern County - stand to lose millions if the Fresno-based tech firm does not make it

Welcome to Bakersfield Observed. Our mission is to celebrate life in Kern County by focusing on newsmakers and events and the local characters who make this community such a special place. The views expressed here are strictly my own and do not represent any other company or publication.

 Editor's note: We are following the ongoing developments in the financial troubles of Bitwise Industries, drawing on the best reporting we can find. SJVSUN.COM is a leading source of original reporting and in this take, it lists some of the investors in Bitwise. The information has not been independently verified and we do not know if this accurately represents the number of share the currently owned by individuals.

 The list includes some Kern County connections, including the John and Ingrid Lake Family Trust and the John and Sheila Lake Descendants Trust. If those names are familiar, it is because the Lake family founded Rain for Rent, the successful global irrigation company here in Kern County.
 J.P. Lake, who runs his own venture capital fund, was a leading proponent in Bitwise when it arrived in Bakersfield. According to the Sun reporting at one time the two Lake trusts held 1,000,000 shares of Bitwise. The Lakes were on the Top Thirty list of investors.
 Check out the list of investors here ...

Tuesday, June 6, 2023

The rise and fall of Bitwise Industries: was it a good idea that got off the track or something more sinister? Plus more on the slow, insidious demise of downtown thanks to crime and vagrants and celebrating our local eateries

 Welcome to Bakersfield Observed. Our mission is to celebrate life in Kern County by focusing on newsmakers and events and the local characters who make this community such a special place. The views expressed here are strictly my own and do not represent any other company or publication.

 * ... BITWISE: The rise and fall of Bitwise Industries, the so-called Fresno-based tech company that promised to convert underserved communities into tech hot spots, may prove to be a cautionary tale for communities in search of economic revival. And now that Bitwise seems to be imploding before our very eyes, we are left wondering if it was a good idea that went astray, an age old story of corporate greed or a ponzi scheme that went undetected for too long? One thing is for sure: Bakersfield has had its share of "too good to be true" stories, including the once high flying real estate firm of Crisp and Cole (remember when they were going to build a high rise at CSUB?) and the dramatic fall of a once wildly popular monsignor accused of sexual abuse. So what happened in the case of Bitwise and should we have seen it coming?

The best reporting on this story is being done by a Fresno reporter named David Taub of, whose work has proved indispensable now that traditional sources of reporting like newspapers have been muted as the industry has shrunk and local radio seems uninterested. So what do we know now? Bitwise is about to be evicted from three buildings in Fresno, it has fired its co-CEOs, it has furloughed some 900 employees, it is behind on rent and taxes and it was bouncing checks as it shut its doors. Looking back, a casual cruise through the Bitwise website may hold a few clues. For example, did you know there are 67 vice presidents and senior vice presidents listed for the six communities where Bitwise is located? That's right, sixty-seven executives. vice presidents for everything from traditional fare like marketing and strategy to more new age titles like VP of "well being and VP of "new economies." That is an average of 10 VPs for each location. A tad on the beefy side in terms of payroll ya think? (photos courtesy of David Taub and

 * ... MORE BITWISE: Meanwhile, there are plenty of unanswered questions regarding Bitwise and how we found ourselves in this mess. Here are some questions we should address:
 a) Everyone from Mayor Karen Goh to the entire City Council (particularly Councilmen Bob Smith and Andrae Gonzales) bought into the pitch, and that led to the city doing business with Bitwise. We need a forensic audit to determine how the city got involved, what kind of due diligence we did, and how we can avoid a similar fate in the future?
 a) Exactly how much money did the city and county grant Bitwise, either for contracts to train people or in outright grants? In other words, how much did the Kern County lose on this ill fated endeavor? 
 b) In the spirit of full disclosure we need to know if anyone on the City Council, or in government, benefit in any way by doing business with Bitwise? Are there any conflicts of interest in real estate dealings, sales, leases or contracts that involve people in city and county government or their close friends or relatives? What was the role of Sage Equities (run by Bob Smith's son and daughter in law) in the Bitwise real estate moves, in any? The public lost money in this deal and it's time to let the sun shine on all the details, legal or illegal.
 c) If Bitwise goes away, what is the plan for the Bitwise buildings, many of which have already been upgraded?

 * ... WARD 2 PROBLEMS: Each week seems to bring new misery to business people and homeowners downtown as the city shows little ability to control the bad elements bent on destroying our city. So it was nice to see what the owners of Breaking Bad Hair did the other day after a vagrant smashed their front window.

 * ... STOLEN GUITARS: Take a look at this picture of some classic guitars that were stolen from Front Porch Music in downtown Bakersfield, yet another victim of the lawlessness of Ward 2. Front Porch is among dozens of downtown businesses who has suffered the indignity of random break-ins as crime explodes.

 * ... PICTURE THIS: Today's picture of the day comes from one of our favorite local photographers, JoJo Paredes Butingan. The picture was taken May 17 in the Kern River Valley. Enjoy.

 * ... DINNER FOR TWO: Two of our iconic and favorite restaurants in town -  Luigi's Delicatessen has Uricchio's Trattoria - have slick marketing campaigns on social media, showcasing some of the well known dishes that make these places a fan favorite. Check out this first post from Luigi's and the second by Uricchio's and tell me it doesn't make your mouth water.

 * ... MEMORIES: Enjoy these goodies from our friends over at Kern County History Fans.