00:00Today on Forbes, Selena Gomez's mental health startup couldn't pay its employees last month.
00:08WonderMind, a mental health startup co-founded by singer, actor, and business mogul Selena Gomez,
00:14is in the midst of a crisis after apparently running out of cash and failing to pay its
00:18employees, vendors, and freelancers starting in late March. For now, the Los Angeles-based company,
00:25which employs around 15 people to publish articles, interviews, and podcasts about mental
00:30health topics, is being kept afloat by Gomez's mom, Mandy Teefy, who is WonderMind's CEO.
00:37Teefy told employees on Thursday that she took out a loan against her home to pay back its
00:42outstanding debts. Employees have been repaid for one missing paycheck, but are still waiting on
00:47another, while freelancers and vendors are owed tens of thousands, if not hundreds of thousands,
00:53of dollars. A WonderMind spokesperson says the company has, quote, rectified the situation and
01:00that everyone who is owed money should have received it on Monday, meaning yesterday. In a written
01:05statement, the spokesperson told Forbes, quote, like many startups, WonderMind has been working
01:11through its own set of growing pains, adding that, quote, in the coming days, we will be transitioning
01:16into a new chapter for WonderMind and continuing our important work and mental fitness that helps
01:21hundreds of thousands of people. Teefy declined to comment for this article, while a representative
01:27for Gomez did not respond to Forbes' request for comment. Gomez, who is 32 years old, is one of
01:34America's richest self-made entrepreneurs, worth an estimated $700 million. Her fortune is largely tied
01:41up in her rare beauty makeup line, which she started in 2020 and had nearly $370 million in revenue in
01:482023. She launched WonderMind in 2021 with her mom and Daniela Pearson, the founder and CEO of women's
01:56newsletter The Newsette. Inspired by the founder's own individual mental health struggles, Pearson
02:02previously described the site to Forbes as, quote, a sexier, more entertaining competitor to
02:07sites like Psychology Today and WebMD. During a panel Gomez and Teefy did about WonderMind last March at the
02:15Austin-based conference South by Southwest. Gomez said, quote, it honestly stemmed from a conversation
02:21we both had with each other, and it was about our journeys, and we ended up relating a lot to each
02:26other, and it was a turning point. She said this prompted them to question, quote, how can we do that
02:31for other people? In 2022, a year after its launch, WonderMind raised $5 million at a $100 million
02:39valuation in a Series A funding round led by Serena Williams' Serena Ventures, with participation from
02:46Sequoia Capital, Lightspeed Ventures, and the family office of real estate billionaire Barry Sternlicht.
02:52Despite the initial hype, and its now wealthy celebrity co-founder, WonderMind seems to be in
02:58dire financial straits, according to recordings and emails obtained by Forbes, as well as interviews
03:03with three current WonderMind employees, all of whom who spoke on the condition of anonymity for fear
03:08of retribution. In addition to money owed to staff members, two of these employees say the company
03:14owes $60,000 to a PR firm it previously worked with. One said WonderMind owes tens of thousands of
03:21dollars to freelance writers, some of whom haven't been paid in over three months. Two current employees
03:28say problems began in January 2023. That's when Teefy became sole CEO. Pearson had been running the
03:35company with her as co-CEO, but exited that same month. It's unclear why. Both she and the company
03:41declined to comment on her departure. Either way, that's when Teefy, who had reportedly managed Gomez's
03:48career for many years, took the reins alone. These two employees argue Teefy did not have the
03:54operational knowledge to make the brand succeed. According to these employees, Teefy turned down
03:59crucial brand deals if they wanted her daughter to be involved, including a multi-million dollar
04:04deal with Airbnb, which they say contributed to the company's financial problems. For full coverage,
04:11check out Jemima McAvoy's piece on Forbes.com. This is Kieran Meadows from Forbes. Thanks for tuning in.
04:24you
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