One of the kings of the '90s dot-com bubble now faces 20 years in prison

Kaleil Isaza Tuzman

Sixteen years ago, the tech bubble crashed.

The NASDAQ fell from a high of 5,132 in March 2000 to just 1,470 a few months later, as giddy investors suddenly sobered up after figuring out that web businesses with little or no revenue were fundamentally worthless. Companies worth billions when they IPO'd went to zero. Good companies were dragged down with them: Cisco lost 86% of its market cap. Amazon stock fell from $107 to just $7.

A global recession kicked in within a year. Few who lived through it will forget it. The 2000 crash remains one of the defining features of modern economic life.

One of the more memorable characters from the dot-com boom was Kaleil Isaza Tuzman, founder of govWorks.com. He was the star of a D.A. Pennebaker documentary, "Startup.com," which showed his struggle — and ultimate failure — to persuade local governments in the US to put their operations online so people could pay parking tickets on a website — a novel idea at the time.

Tuzman was back in the news this week when federal prosecutors in New York made a seventh arrest in an alleged market manipulation and securities fraud case involving another tech startup, KIT Digital. He has pleaded not guilty. 

Of all the Kings of the Dot Com Bubble, Tuzman has probably fallen farther than most. (We'll tell you what happened to him later in this article.)

At the same time, we thought it would be interesting to find out what happened to the other startup founders who defined an era of unparalleled ambition and excess.

These were the guys who declined to buy a new company called "Google" for $1 million because it seemed too expensive. The people who threw office parties at which transvestites served burgers from White Castle. The men who complained that the "Concorde was a bit cramped."

It was a heck of a time.

Kaleil Isaza Tuzman's govWorks was made into a movie, "Startup.com." No one went to see it.

Tuzman was one of the more famous, but least successful, entrepreneurs from the late 1990s. He left Goldman Sachs to start his own tech company, where he allowed a film crew to follow the creation, and bankruptcy, of his startup, govWorks Inc. The film, Startup.com, was a box office flop.

On paper, govWorks was a great idea — a website where people could go to pay parking tickets and get other local government services without having to physically go to the local courthouse.

But the company, which had over 250 employees at its height, burned through $60 million in venture capital and never made a dime. 

Tuzman went on to become president of JumpTV, a start-up focused on foreign Internet Protocol Television content. The company raised $160 million in two public offerings in 2006 and 2007. Tuzman sold his stake and left the company.

And then ...

Now he faces 20 years in prison after being extradited from a Colombian jail.

Currently, Tuzman and several business associates he met years later are accused of false accounting methods to inflate the stock price of KIT Digital, a video advertising company. 

After he was charged in 2015, Tuzman allegedly went on the run to Colombia, according to prosecutors, and was arrested in September of that year. He spent the next 11 months inside Colombia's notorious La Picota prison, where he shared a cell with an accused murderer and a drug trafficker, according to Bloomberg. In July 2016 he was extradited to the US, where he is out on bail pending the trial.

He potentially faces 20 years in prison.  

Joe Kraus' eXcite got an offer to buy Google for $750,000, and passed.

The early search engine Excite (or "eXcite," as it was styled) was founded in 1994 by a group of Stanford University students, including Kraus.

In 1999, Excite had a chance to buy Google, according to MinyanVille. But Excite’s George Bell deemed the $1 million asking price too high. Bell also declined a second offer to take Google for $750,000.

The company went through a complicated skein of mergers and financing, culminating in a deal in which @Home paid $7.2 billion for the company in 1999. By 2001, it was bankrupt.

Kraus now works at Google Ventures, where he is an investor. Bell sold his mobile-ad startup Jumptap to Millennial Media last year, and he's now an investor at General Catalyst Partners.