Eric Schmidt’s Split With Advisor Reveals Complex Deals With Ex-Girlfriends

Over time, though, Rundell began handling more delicate matters for Schmidt. In 2015, the men inked a contract that paid Rundell $47,500 a month for “research, business development, operational and negotiation services,” according to a copy of the contract filed in court. In a deposition Schmidt gave a few years ago, he said Rundell described himself as someone who could “solve special and hard problems.”

Those problems include handling financial arrangements with some of Schmidt’s former girlfriends, according to interviews with six people close to the arrangements and a series of court cases. Schmidt has sometimes run into issues with his extramarital affairs when the women involved learned that their relationship with Schmidt was not exclusive or would not lead to an exclusive relationship, according to four people familiar with the arrangements.

In one case, a venture capital firm Schmidt founded made investments in companies introduced to Schmidt by a former girlfriend, who stood to get a cut of the profits, according to documents filed in court and people familiar with the arrangement.

Rundell put together the arrangement and was the point person for managing it.

On another occasion, Schmidt’s fund put money into a venture controlled by a close female friend of another of his former girlfriends, after the friend helped Schmidt get that girlfriend into an overseas health center, the court documents and people said.

Three people close to Schmidt’s negotiations with former partners said the former girlfriends signed confidentiality agreements with the billionaire to protect his privacy.

The revelations provide a window into how one of the country’s richest people, and a prominent figure in Silicon Valley, mingled his private life with his business ventures.

His arrangements with Rundell also demonstrates how the ultrawealthy structure their private financial arrangements and navigate tricky legal issues to safeguard their reputation.

The people said the confidentiality agreements he signed with the former girlfriends were not tied to any allegations of wrongdoing on Schmidt’s behalf.

Eventually, Schmidt and Rundell had a falling-out. Before an arbitrator in 2020, Schmidt accused Rundell of stealing millions from him, court documents show. That included Schmidt’s allegations that Rundell had used Schmidt’s money to fund a salary paid to a woman whom Schmidt later alleged was in a romantic relationship with Rundell.

Schmidt won a $2 million award in the matter in 2021, court documents show.

Schmidt’s history with Rundell has come to light in recent months in the wake of a lawsuit filed in New York State Supreme Court by a former employee of Rundell’s, Sarah Koebel, seeking information related to Schmidt’s private finances and personal relationships.

Schmidt, who ran Google for a decade through 2011 before serving as the internet giant’s executive chair until 2015, has a longtime wife, Wendy, and also has publicly dated a string of high-profile women over the last two decades.

Schmidt declined to comment on any arrangements he had in place with any of his former girlfriends. Regarding his association with Rundell, Schmidt, through a spokesperson, said: "It is disappointing when someone you trusted takes advantage and diverts millions of dollars for their own benefit--and after getting caught, retaliates against you for holding them legally accountable."

A lawyer representing Rundell said Rundell had no “interest in discussing any such matters” and The Information “should immediately cease and desist from making any further efforts to contact” Rundell.

‘Advice, Consultation and Assistance’

The relationship between Schmidt and Rundell was first brokered by Gary “Court” Coursey, the longtime managing partner of Schmidt’s private fund, TomorrowVentures. The fund has invested in more than 350 consumer, media and technology companies such as Remitly and Events.com over the past 15 years. Coursey declined to comment for this article.

Coursey had a long history with Rundell. The pair met at college in Colorado and worked together at an early internet company Coursey had founded, Certifiedemail.com, which was sold to online health site WebMD in 1998. Not long after the company was acquired, WebMD fired both Coursey and Rundell, and the duo sued WebMD for breach of contract, court documents show.

WebMD countersued Coursey for allegedly providing “false and fraudulent” financial information to deceive it into buying Certifiedemail.com, and alleged that he did “little more than travel on first class airline tickets and incur business expenses for which he claimed reimbursement" while employed at WebMD, according to the court documents. The parties settled the case.

The pair went on to found an eponymous but short-lived consultancy, Rundell Coursey & Co., in 1999, and briefly worked for Michael Jackson, providing “advice, consultation and assistance” for the now-deceased King of Pop in 2001, court documents show. A letter signed by Jackson, dated that same year, instructed Rundell and Coursey to withdraw $1 million of Jackson’s own cash from a bank to be delivered to a “secure location” at Neverland, according to an auction house that later sold the letter.

Jackson invested $2 million into an ill-fated business venture founded by the pair, HollywoodTickets.com, before the pop star’s relationship with the men went south. In 2001, Coursey and Rundell sued Jackson for $25 million for unpaid services, in a case that was settled. In 2002, Jackon countersued Rundell and Coursey for breach of contract. That case was dismissed.

The partnership between Coursey and Rundell wasn’t always smooth sailing. In 2003, Coursey hired lawyers to threaten Rundell with a lawsuit if he did not repay more than the $270,000 Coursey had extended to him, according to a contemporaneous demand letter sent to Rundell and people familiar with the events.

Coursey and Rundell patched over their differences and continued to work together.

In a podcast interview in 2017, Coursey described his history with Rundell.

“It’s a kind of divide-and-conquer mentality,” Coursey said. “We have the ability to really go out and talk to our contact base, and whether we are both there, or whether one of us is individually there, we’re really able to leverage and maintain a network in a strong way.

“Again, let me tell you, partnerships are very hard and don’t always work.”

‘Special and Hard Problems’

Despite their spotty success in business, both Coursey and Rundell eventually secured work with Schmidt, who at the time was already one of America’s most powerful businesspeople.

Schmidt asked Coursey to set up Tomorrow Ventures, which was registered in 2009, Coursey said in the podcast interview.

“I had become social friends with Eric Schmidt, executive chairman of Alphabet-Google,” Coursey said in the podcast. “He had spent a bunch of time at our homes in Colorado and [we] thought he was going to be our next investor in our next entrepreneurial endeavor, and about seven years ago he asked if we’d set up a direct investment vehicle and said that if we did it for the first couple of years with just his capital, he said he would let us do it with other families, and so today we work with Eric and a few other families.”

Schmidt began working with Rundell in late 2013, according to a partial transcript of a deposition by Schmidt, taken from a private arbitration filed in a separate court case in New York Supreme Court earlier this year.

“Derek explained that he was a person who could solve special and hard problems. And that was how he described himself. And he described himself as an attorney,” Schmidt said in the deposition.

Rundell obtained a Juris Doctorate from the California Western School of Law, according to his personal website, but he had not been admitted to practice law, Schmidt said in the deposition.

Initially, Rundell helped Schmidt arrange his accommodations and entertainment at the Burning Man festival. In 2015, the men inked a contract that paid Rundell $47,500 a month for “research, business development, operational and negotiation services.”

According to Schmidt’s deposition, he used Rundell when he was first “structuring a deal” with Marcy Simon, a well-known New York public relations executive who was in a romantic relationship with Schmidt and at one time did PR work for Google. The deal allowed Simon to obtain an economic interest in investments she introduced to Schmidt.

It was struck at a time after Schmidt and Simon had a falling-out over the status of their romantic entanglement, according to two people familiar with the arrangement.

“I was dealing with the—a woman named Marcy Simon, and there were a few others, but what I remember was he worked on the Marcy Simon—basically structuring a deal with her,” Schmidt said in the deposition.

‘I Am Lawyering UP’

To facilitate those investments, Simon entered into a consulting agreement in 2014 with an entity funded by Schmidt called Maple Beach Ventures, according to a person familiar with the situation and documents filed in the U.S. District Court for the Northern District of California in a case Simon filed against Maple Beach in 2021. Rundell was the managing partner of Maple Beach Ventures, the documents showed.

Simon’s agreement ran for a five-year renewable term as a consultant to provide “general business research consulting services and introductions to potential investment opportunities.”

Among the companies Simon introduced to Schmidt was Hola Networks and Brandtale, as well as Away, a luggage and travel accessory company founded by Jen Rubio.

The arrangement between Simon and Rundell later soured. In March 2016, Simon grew frustrated that Rundell was not acting on her investment ideas, according to subsequent court filings in a case Simon launched against Maple Beach.

At the time, Simon emailed Rundell, her lawyer, and other parties whose names were redacted, saying that Rundell’s “behavior is not acceptable” and that she had “an awesome case here” and that “this is going mainstream and I am lawyering UP.” A follow-up email from Simon shortly after said: “Let me know if you want to take this public.”

The next day, Rundell responded to Simon: ​​”This email shall serve as notice that you have violated the agreement(s).”

In private arbitration, Simon accused Maple Beach of breach of contract. Simon was awarded more than $100,000, according to filings in the case.

Simon and Rundell later amended her consulting agreement to resolve their disputes, filings show.

But Simon later claimed in court that in August 2017 Maple Beach had stopped paying her. Simon declined multiple requests for comment for this article.

‘An Enormous Cloud on My Ability to Defend Myself’

Simon’s problems with the investments she made with Schmidt’s money didn’t end there. In late 2023, Away sued Simon and Maple Beach Ventures in New York Supreme Court.

The lawsuit related to an investment in Away made by the Rundell-controlled Maple Beach Ventures in 2015. But when Away arranged a tender offer to buy back shares, Simon allegedly created another entity also named Maple Beach Ventures to sell Away shares, according to Away’s lawsuit. Away alleged that in selling the shares in the tender, Simon had kept $3 million in proceeds she was not entitled to.

Simon said in court filings in response to Away’s suit that she had “originally intended to acquire the investment in my own name” but later took ownership of the investment under a different entity she created, with the understanding that she would be allowed to “enjoy the full economic benefits” of the stake, including any sale of the shares.

However, Simon also said she was prohibited from fully explaining the reasons behind the unusual arrangement due to a nondisclosure deal that had placed “an enormous cloud on my ability to defend myself in this action and from presenting highly relevant information to the court.”

The messy situation has led to Simon applying to a private arbitration court to seek a judgment on the “scope and enforceability” of her nondisclosure agreement that could allow her to fully defend herself against Away’s allegations, according to court filings.

Along with creating a legal headache, the case has driven a rift through Simon’s previously close relationship with Away founder Rubio. The two women had previously “had a friendship and socialized and shared personal information with each other,” according to Simon’s court filings. The case is ongoing. Rubio did not respond to multiple requests for comment.

‘Disguised Compensation From Tomorrow Ventures’

Another woman in Schmidt’s orbit, introduced to the billionaire through a former romantic partner, also received venture funding brokered through his advisers.

Tomorrow Ventures sank $2 million into a mobile health company named Liiv.com. The company was founded by social worker Elizabeth “Liz” Brown, a onetime close friend of Schmidt’s former girlfriend and ex-journalist Kate Bohner.

Liiv received the investment shortly after Brown and Schmidt helped Bohner travel to a health center overseas, according to people familiar with the events. Bohner has written in a blog about her recovery from alcoholism.

“Tomorrow Ventures’s investment [in Liiv] was not an arms-length transaction. Rather…it was disguised compensation from Tomorrow Ventures’ founder to Brown for Brown’s assistance with a personal issue,” according to documents in a lawsuit filed in New York Supreme Court by another company, DaVincian Healthcare. The lawsuit followed an attempt by Rundell and Coursey to get DaVincian to buy Liiv, court documents showed.

DaVincian later withdrew its case.

Lawyers representing DaVincian’s CEO, who made the allegations, did not respond to a request for comment. Brown did not respond to multiple requests for comment.

‘Work, Play, Life’

Rundell used Schmidt’s money to help establish online startup news site StarterNoise in 2015, according to an excerpt of a deposition by Rundell in arbitration proceedings between Schmidt and Rundell, which was filed in court in a separate case.

The website started as a bimonthly email on technology trends and apps, launched by Sarah Koebel—a woman Rundell had previously hired to help organize Schmidt’s Burning Man festivities. At the time that Rundell put money into the venture, Koebel was working at a marketing agency, Tulip Strategies, which was founded by Rundell’s wife (Rundell’s wife hung up when reached for comment, and her lawyer said she had no interest in discussing the matter).

According to the online film database IMDb, Rundell and Koebel also worked on other projects together: She is listed as a credited actor in Rundell’s film, “Zombie Sitter,” which he wrote, directed and starred in.

“After receiving funding from Eric Schmidt’s VC firm, Tomorrow Ventures, StarterNoise is gaining real attention and importance in the marketplace,” reads a 2015 press release for the StarterNoise website. Rundell paid Koebel an annual salary of $100,000 using Schmidt’s funds, Rundell said in a deposition.

According to Schmidt’s lawyers in court filings, Koebel was paid a total of $500,000 from StarterNoise using funds provided by Schmidt. Schmidt’s lawyers also alleged that Rundell and Koebel have “a longstanding sexual relationship,” and that Rundell invested $100,000 in another of Koebel’s ventures, a company called Wellness WPL, an acronym for “Work, Play, Life.”

Koebel recently launched a venture fund aimed at investing in female-owned businesses, Shakti WPL Ventures. According to a press release from Shakti in late 2023, the fund made one of its first investments in sex and intimacy product business Woo More Play.

Koebel’s lawyer declined to comment.

‘A Public Persona Who Seeks to Remain Anonymous’

Koebel has been occupied in recent months in a legal tussle with Schmidt.

Koebel filed a case in New York Supreme Court in March making a string of salacious allegations against an unnamed high-profile individual. She filed the lawsuit against Rundell in the hopes of accessing documents related to the high profile individual, which are in Rundell’s possession and which he is barred from sharing, according to her filings.

Schmidt was not given notice of Koebel’s New York lawsuit as he was not named as a party to the case. However, Schmidt’s lawyers “conducted searches of civil filings and discovered” the case.

The identity of the high-profile individual wasn’t disclosed in court papers, but people familiar with the matter say it was Schmidt. His lawyers have also described the documents Koebel is seeking as containing information about Schmidt’s “finances, investments, and personal relationships”—information they say Rundell had “expressly agreed to keep ‘strictly confidential.’”

In filings, Schmidt’s lawyers have labeled Koebel’s claims as “false,” “salacious and defamatory,” and “meritless, collusive, and jurisdictionally defective.”

Koebel voluntarily withdrew her case in June this year. Koebel, through her lawyer, declined to comment on the matter. Koebel has, however, threatened to separately sue Schmidt in California, according to filings from Schmidt’s lawyers related to the New York Supreme Court case filed by Koebel.

To support their allegations that Koebel and Rundell are entwined in a sexual relationship, Schmidt’s lawyers have relied in part on the word of Schmidt’s adviser, Coursey, who has had a falling-out with Rundell.

Coursey and Rundell went to private arbitration in 2019 after a dispute about control over the investments they had made. Coursey won more than $1 million in damages, according to a court-enforced judgment of the arbitration award in the Colorado District Court of Arapahoe County.

According to the judgment, the pair dissolved their partnership in 2019. A person close to the events said that following the judgment, Rundell unsuccessfully asked Schmidt to cover his bills stemming from the case.