TheFunded.com

21,224 Members | 30,208 Reviews
6,719 Ratings - 9,621 Comments
13,868 Partners - 30,798 Feedback



Avoid Benchmark: the Scoprion and the Frog

Benchmark Capital

The behavior of Benchmark with Uber and Travis Kalanick is repressible, and no good entrepreneur should work with this firm. Someone needs to speak out. Leaving aside allegations of sexism within the company, a closer look at the "invisible hand" of Benchmark is needed.

Why did Benchark give Travis key Board allocations if he were so bad? Why did they orchestrate a maneuver to kick him out after his parents suffered a terrible accident? Why have they been meddling in day-to-day operations at the company? Why are they suing with defamatory and knowingly false allegations lifted from another lawsuit? Why are they tormenting other Board Members?

Travis himself may have the answer in a 2011 video, in which there is a slide titled, "VCs tend to kill founding CEOs:"

https://t.co/8aGkN7bgdg

It's time that the true inside story gets told. The Board Members do not like Benchmark, and with good reason. Everyone is sitting on a diamond, and, like the scorpion and the frog parable, Benchmark had to kill the frog. It's in their nature.

Why did they kill the frog? There are three reasons:

1. Liquidity - Each Benchmark partner will make $250 MM to $500 MM on Uber. Tnis is more profit more than many of the founding engineers and executives. Any of the sexism scandals have delayed an IPO, so why not create turmoil to get bought out?

2. Liability - Bill Gurley is the first institutional investor. He was a close advisor and mentor. Lawyers at Benchmark warned that the fund may be liable for the actions within Uber. So, why not blame the CEO as you boot him out the door to shift the blame and the liability?

3. Bank Heist - Benchmark owns only 13% of the business. By removing Travis and opening the three Board Seats that he controls, this allows Benchmark to gain control of the business. If they can not get bought out at a high price by threatening other Board Members, then why not control one of the largest private companies in Silicon Valley and do as you please?

Abuse of power has returned to the world of venture capital, and Uber is the poster child of this new movement. Their Machiavellian schemes are reprehensible. Over the coming days, the story will start to come out. Chris Sacca is involved. False stories have been planted. It's ugly.

"A scorpion asks a frog to carry it across a river. The frog hesitates, afraid of being stung, but the scorpion argues that if it did so, they would both drown. Considering this, the frog agrees, but midway across the river the scorpion does indeed sting the frog, dooming them both. When the frog asks the scorpion why, the scorpion replies that it was in its nature to do so."


Data Room for Fundraising

TheFunded.com Advice

Private: 819 Chars


Need Advice

TheFunded.com Discussion


Founder vs. Outside CEO Responsibilities

TheFunded.com Discussion


Supporting Other Small Companies

TheFunded.com Discussion


Longtimer Post 002 Replacement

TheFunded.com Discussion


Longtimer Post 002

TheFunded.com Discussion


Tracking Deal Flow Opportunities

TheFunded.com Discussion


Longtimer Post 001

TheFunded.com Discussion


One Month Between Posts Here on the Funded

TheFunded.com Discussion


Letter of Intent

TheFunded.com Discussion


Aggressive Procurement

TheFunded.com Discussion


Need Advice and Suggestions!

TheFunded.com Discussion


Roadshow

TheFunded.com Discussion


Pricing Strategy Enterprise

TheFunded.com Discussion


How Should I Respond?

TheFunded.com Discussion


Juicero: Classic VC Folly

TheFunded.com Discussion


Mini Ipo

TheFunded.com Discussion


Who are Your Other Customers?

TheFunded.com Discussion


M&A Terms

TheFunded.com Discussion


Looking for Patent Attorney

TheFunded.com Discussion


Founder Vesting

TheFunded.com Discussion


Who Do You Talk to When You Hit Burnout?

TheFunded.com Discussion


VC Intro Ends Up Being a Finder

TheFunded.com Discussion


US Central Software/B2B Up Round Terms

TheFunded.com Term Sheet


Prev | Next