‘Smoke And Mirrors': How Entrepreneur Daniella Pierson Exaggerated And Self-Promoted Her Way Into Turmoil

Forbes

4 days ago

D aniella Pierson turned 30 on Monday—a milestone acknowledged by a bevy of successful friends, from Spanx founder Sara Blakely to the singer Jewel to designer Diane Von Furstenberg. It's an especially auspicious birthday for an entrepreneur who spent her 20s building a lifestyle newsletter called The Newsette, which she launched as a student at Boston University in 2015; garnering a feature in USA Today in 2019; debuting on our Forbes '30 Under 30' list in 2020; appearing on the the cover of Entrepreneur magazine in 2021 (with Selena Gomez) for a second company, mental health startup Wondermind; ranking number 16 on Inc5000's list of fastest growing private companies in 2022. And giving talks and speeches throughout, at schools from Stanford to BU and media gatherings from the Forbes Power Women's Summit to Newsweek's Women's Global Impact Forum just this week.
Her high profile owes itself to brains and hustle—and, it turns out, a consistent history of large exaggerations and extreme self-promotion, those latter two traits reinforcing the other. Over the course of the last three months, Forbes spoke to more than a dozen people who've worked closely with her and reviewed documents, press releases and videos of all four of her recent business ventures. What emerges is someone who fails to understand the difference between entrepreneurial zeal and extreme hyperbole—and now faces a potential reckoning.
For all the celebrity plaudits and press love, Pierson's businesses seem to be unraveling. Business partnerships have collapsed, the staff at her original startup has shrunk to roughly one-quarter its peak size, with revenue tumbling from $40 million in 2021 (if you believe Pierson) to less than $4 million in recent years, according to four former employees. (Pierson declined to comment on any revenue figures after 2021.) Kicked out of a second startup she cofounded, Pierson is now starting her third venture in four years, that one also seemingly riddled with problems.
'I don't know that she actually cares about building a successful business as much as she cares about being able to say she's a badass CEO,' says one former employee who, like others in this article, spoke under condition of anonymity for fear of retaliation. 'It's all smoke and mirrors.'
The daughter of a Colombian immigrant oral surgeon mother and a car dealership owner father from Niagara Falls, Pierson grew up in Jacksonville, Florida. She speaks often of her early struggles with ADHD, depression and particularly OCD (obsessive compulsive disorder).
She says she got mediocre grades in school and was called the 'dumb twin' compared to her sister, Alex, who received straight As. (Her sister, who writes under the name Alex Aster, is now a bestselling author of young adult fiction, including the romantic fantasy series Lightlark .)
Pierson started Newsette using tactics that would become something of a playbook: scrappy—and disingenuous. In those early days, she sent messages from fake emails to make it seem like the company had more employees than just her. She also posed as an intern, messaging friends of friends to subscribe and telling them if they successfully referred 10 others, they could call themselves 'brand ambassadors' on their resumés. 'I made it look like it was bigger than it was,' she said in a talk at the Stanford Graduate School of Business last year. 'I literally just faked it 'til I made it.'
A notable milestone came when Pierson, then about 24, met Diane von Furstenberg, the legendary fashion designer known for her iconic wrap dress. Married to billionaire Barry Diller, von Furstenberg introduced her to a host of other celebrities, as well as connections at Amazon. Newsette then ran a campaign for Amazon highlighting female founders on the e-commerce giant's homepage on International Women's Day in 2020. Soon after, Pierson started Newland, a creative marketing agency within Newsette, structured to connect influencers with Amazon and other brands.
Things looked promising. In 2021, the company generated $34 million in sales, according to a document shared by a spokesperson—$6 million less than what Pierson has frequently said, but still its best year ever. Newsette's spokesperson clarified that the company 'booked' $40 million in sales in 2021, but that Amazon, then its biggest customer, paid the remaining sum in the first quarter of 2022.
At this point, Pierson reached out to Forbes to nominate herself for its Richest Self-Made Women list. In looking into her company in 2022, Forbes confirmed that RXBar founder Peter Rahal had come on as an outside investor. Rahal, who sold 50% of his former company for $300 million five years earlier, has since put money into some 100 businesses. That small investment valued Newsette at $200 million.
More than the cash, Rahal's bet on Pierson gave her clout. Based on that deal's numbers, Forbes valued Pierson's own 84% stake in the company at just under $170 million. At the time, she also owned more than a third of Wondermind, a mental wellness startup she cofounded with Selena Gomez and Gomez's mom, Mandy Teefey. Wondermind was then worth $100 million after attracting $5 million in a funding round led by tennis star Serena Williams' venture capital firm. Pierson also eagerly showed Forbes millions in other assets, enough for us to declare her in August 2022 'one of the wealthiest women of color in the U.S.,' worth $220 million and, then age 27, 'younger than just about any self-made female entrepreneur with a nine figure fortune.'
That Forbes story marked a turning point for Pierson, according to former employees who say she repeatedly used the net worth figure to sell others on her success—even when her businesses turned south.
And it turns out the net worth figure she loves to cite was derived from another exaggeration. Yes, Rahal invested at a $200 million valuation, which is traditionally a blue chip way to appraise a private company. But he now tells Forbes that it was just a 1.25% stake and he didn't even look at the financials when he made the investment. In other words, the company touting its $200 million valuation had no real chance of any other serious investor touching it at that price.
'It was like Anna Delvey, but on a much smaller scale,' says a former employee of Pierson's. 'Pretty much the second day [I joined], I would make jokes like, 'I'm going to be in the documentary about this company one day.''The Newland business—which had become Newsette's main source of revenue—soon started to falter. Partnerships with Amazon and Mattel, its only significant clients, fell apart. Amazon stopped being a client in late 2022, per former employees. (Amazon declined to comment and Mattel did not reply to a request for comment.) In January 2023, Pierson took to Instagram to drum up business, claiming that demand was high: 'Newsette Media Group keeps the agency under wraps because of our waitlist, but hit us up at GoNewland.com and let's see if we can make magic together.' She began laying off staff and shut down the Newland segment entirely at the end of 2023, according to several people who were employed at the company then, though never publicly announced it. One person with knowledge of the situation says Pierson continues to pitch agency capabilities as though Newland is still active, and Pierson has continued, even this year, to include it on her email signature.
Things haven't been that much better at the original newsletter business. Former employees say Pierson has described it being in difficult financial straits over the years, claiming at times to have partly funded it out of her own pocket.
Two sources say she also wildly exaggerates to clients the value of her company—using the $200 million figure even after revenue nosedived—and the amount that other brands spend on Newsette, claiming that customers like Nike and Ulta Beauty are 'spending tens of millions on us per year.' Four former employees tell Forbes that is not true: no individual brand deal for the newsletter ever hit $1 million, and deals were usually in the tens of thousands or low hundreds of thousands of dollars. (Branded content is Newsette's main source of revenue.) Nike and Ulta did not reply to requests for comment.
Another of her embellishments: subscriber numbers. Around the time Rahal came on board in 2022, Pierson cited subscribers in excess of 500,000. But according to two internal documents, subscribers totalled just over 400,000 at that time. 'They got us all on the phone and said, 'Stop talking about the number of subscribers we have,' says a former employee. 'They never said why. But it was because, I think, we didn't actually have that many.' She adds that her team was also asked to start describing the number of subscribers in ranges, rather than specific numbers.
The overstating hasn't stopped. Newsette had about 500,000 subscribers last year, per internal documents, but new business pitches claimed to have over 1.3 million subscribers across the company's three newsletter products. It didn't specify that most readers of the newer weekend shopping and wellness bulletins also receive the main Newsette offering, meaning that those 1.3 million were not unique subscribers.
Today, Newsette's business is likely worth 'no more than $12.2 million,' according to media valuation expert Kevin Kamen, who reviewed its most recent financial figures and subscribers, provided by Forbes, as well as its social media following. Emphasis on 'no more than.'
Wondermind, which Pierson spent most of 2022 running as co-CEO with Gomez' mother Mandy Teefey, is in even worse shape. Pierson was ultimately pushed out in January 2023, after the two women clashed, according to four former staffers. 'She would not characterize it as 'pushed out,'' says a spokesperson for Pierson. 'Leaving Wondermind was a very difficult decision, but she was proud of what they had built in the time there.' Regardless, problems at Wondermind snowballed. Two thirds of its 15 employees were laid off in May.
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When it comes to leadership, Pierson promotes herself as a motivational uplifter of women. 'I have made it my life's mission to ensure that NOBODY gets knocked down by false labels or barriers to success. I'm here for you—with a hand that will always help you back up,' she posted on Instagram on her 30th birthday.
But that is not how many former employees describe her. The 11 people who worked with Pierson at Newsette or Wondermind interviewed for this article describe her as prone to fits of anger. They say she berated employees, often claiming their work was 'embarrassing' and that she could do all of their jobs better.
'There was definitely this culture of Danny having two personalities,' says a former employee. 'One was online, and with us she was different.' Ex-staff say she repeatedly interfered with their ability to do their jobs, covertly reading their emails, rescheduling meetings over a dozen times, hiring industry experts and ignoring their suggestions. She'd jeopardize relationships with clients, dominating sales calls with details from her personal story and turning down future campaigns they offered because the money wasn't immediate.
'She denied people on our team their annual bonuses, people that had worked really hard,' says another ex-staffer. 'And then like five minutes later she was on Instagram posting all these stories of her new Chanel roller blades and of the new marble kitchen she's installing in her Soho apartment.'
Adds one former employee, 'I have never before in my life worked with someone who knew so little, but thought that she knew everything.'
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Pierson's rise, powered in part by promoting her one-time net worth estimate from Forbes , almost led her into an unexpected deal… Forbes itself.
In 2023, Austin Russell—who three years earlier became the world's youngest self-made billionaire at age 25 when Luminar Technologies, the company he founded as a teenager to enable self-driving cars to navigate, went public via a SPAC—assumed the lead role in a high-profile bid to buy Forbes Media. Two previous deals for Forbes had fallen through in the late hours because the controlling bidders were foreign entities. As a major U.S. media outlet, Forbes potentially falls into a category of strategic assets whose sale to non-Americans requires approval by the Treasury Department.
Russell, a California-born Stanford dropout, had no such issues. But while Russell was enthusiastic about the purchase, multiple sources close to the deal say, and he would maintain an 82% controlling interest, he also had a full-time job as the CEO of a publicly-traded company and no experience in the media business. So in stepped Pierson, a fellow Forbes 30 Under 30 honoree and new acquaintance. 'It all happened so fast,' says someone outside Forbes familiar with the deal.
The purchase already had a star-studded lineup supporting it, including the founders of Brex, ScaleAI and Plaid, as well as superstar names like Kevin Hart, Tony Robbins and Jimmy 'Mr. Beast' Donaldson. The idea was that Pierson would invest a relatively token amount, then serve as an active board member.
It didn't go so well. In calls with large institutional investors, according to two people, neither affiliated with Forbes, who attended multiple fundraising meetings, Pierson proved polarizing. While some were impressed, 'some people definitely did not like her,' says one. Adds the other: 'People were like 'We can't invest in this'. It was that kind of reaction, they couldn't understand how someone like this could be involved.'
Pierson also immediately took charge of the bidders' public relations. In September, the group took the unusual step of issuing a press release announcing that the deal was 'substantially oversubscribed' and naming the board of the new company that would own Forbes —even though the deal hadn't closed yet. Pierson, according to multiple sources involved, engineered the announcement, which described her as 'recognized by Forbes as one of the youngest and wealthiest self-made women of color in the U.S.'
Extremely unusual for a press release, a group image of the new principals sat atop the announcements—individual shots stitched together like a business version of The Avengers. The world-famous Mr. Beast and Robbins on one side, the formidable Hart and Russell (and his 82% controlling stake) on the other. At the dead center, standing slightly above the others, her hand on her hip: Daniella Pierson.
Two months later, the closing deadline passed and the deal fell through. Pierson has since told people in private that '' Forbes wanted me to be the CEO,'' according to two people with knowledge of her conversations.
Despite the deal's collapse, Pierson still describes herself on her speaker's agent web page as a board member of Forbes —which is wholly incorrect. A spokesperson for Pierson says the claim comes from when Pierson was en route to join the board as part of that possible 2023 purchase and that the page is 'out of date.' Yet the page also lists her venture Chasm, which launched less than three months ago.
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No matter the problems behind the scenes, publicly Pierson has never cracked. She continues to present herself as an underdog who's overcome great odds and earned a place in the world of glamorous female business elites. She has a knack for leveraging her ever-expanding network into financial opportunities.
For instance, her almost-fellow-board member Kevin Hart introduced Pierson to Kristin Lemkau, CEO of J.P. Morgan Wealth Management. Over lunch in January 2024, Pierson wooed Lemkau with her latest concept: Be a Breadwinner, a company that would empower women to become their own breadwinners by promoting financial planning. 'She's like, 'We have the same idea,'' Pierson recalled in a Forbes interview she did with Lemkau last March, 'And it literally came from that conversation, and I've never seen any company move this quickly. It's truly a partnership.'
Pierson told other outlets at the time that Breadwinner would eventually include a newsletter, podcast series, book and a venture capital fund. Lemkau told Forbes that the Chase mobile app's free wealth-planning tool would integrate some of Breadwinner's content.
J.P. Morgan sponsored a 'bread carpet' event on March 20, 2024 at its Manhattan headquarters. Pierson declared it the official launch of the company on social media and in the press. Speakers included Diane von Furstenberg and poet Rupi Kaur. Von Furstenberg, who remains a close mentor to Pierson, tells Forbes that she didn't realize the event also served as a company launch. 'I personally only thought it was a conference,' she says. 'I mean, she asked me to speak at J.P. Morgan, so I said yes.'
There were similar struggles with the media launch of Breadwinner. Pierson pitched an 'exclusive' to Forbes , which was killed, given her recent ties to a potential Forbes purchase and increasingly desperate, hyperbolic tendencies. Pierson's response defaulted to what an exaggerator might do when cornered: She threatened.
'Since there is absolutely zero conflict of interest, blocking the story seems like a repression of freedom of speech or some sort of discrimination,' she wrote to a Forbes reporter in March of last year, before escalating to the company's chief content officer and CEO: 'I just explained clearly that your 'reason' is actually not valid… As a woman of color who was amplified by your platform, I sincerely thought unethical, discriminatory, or personal feelings were not part of your editorial process…Let me know if you have an answer to this or if I need to loop in my family office team.'
Since then, Be a Breadwinner appears to have gone nowhere. Pierson has stopped mentioning it, and the website still says that 'Breadwinner's content is coming soon.'
'We were never in a partnership with her,' says Veronica Navarro, head of communications at J.P. Morgan Wealth Management. 'We promoted the event, and that was the end of the collaboration with her,' adding that Breadwinner content did appear in the Chase app for an unspecified amount of time.
Pierson recently transitioned the Be a Breadwinner Instagram page (which has 13 followers) to link to Chasm, a new venture she launched in May to address gender disparities in venture capital funding. A spokesperson for Pierson says the idea for Breadwinner has now turned into Chasm: 'She's always been passionate about supporting female entrepreneurs.'
Pitched as an invite-only club of 'the most successful men and women in the world' who contribute $25,000 annually, Chasm promises to award monthly grants and offer resources to female founders. It claims in marketing materials to have already partnered with 50 high-profile investors and entrepreneurs, including Spanx founder and billionaire Sara Blakely, Drybar founder Ali Webb, Tony Robbins and Instacart CEO Fidji Simo. Yet none of these advertised 'members' attended the kick-off on May 20—an expensive affair at luxury watchmaker Audemars Piguet's swank AP House in Manhattan where espresso martinis featured the name 'Chasm' inscribed in foam.
Nor do those 'members' appear to have shared anything about the company on social media or spoken about it publicly. Forbes reached out to every known name: Webb confirmed her participation, a Simo spokesperson denied that she is a member and others did not reply to requests for comment. A spokesperson for Pierson insists Simo is a member and 'close friend' and says Pierson is paying her membership fee to ensure involvement.
As Forbes was finishing this article, Pierson took to Instagram to post a preemptive response.
'In the last 24 hours, people who represent everything that my gender equality initiatives have fought to change, have launched a smear campaign against me and my companies. The result has been an eagerness to spread false statements and fabricated information intended to discredit me and eliminate my ability to continue to put millions of my own dollars into helping women.'
'I will not allow anyone to get away with defiling the character of me and my companies with uninformed speculation and outright lies.'
One person in a position of informed speculation doesn't seem impressed. Peter Rahal still owns the 1.25% of Newsette that he vastly overpaid for, the investment that provided Pierson her inflated net worth figure, but the state of their relationship is murky. When Forbes asked him for comment, he replied, 'Danielle is a great entrepreneur'—misspelling her name. And when Pierson was making announcements about Chasm on LinkedIn this May, he publicly responded with a comment.
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