Benchmarks in a bind and at war with travis; they need to liquidate their stake in next year or two. Softbank deal to buy out their shares fell apart in part b/c no CEO. Benchmark wants safe-hands leader who will cost-cut firesale their way to quick IPO. travis + allies being more long term; blocking benchmarks CEO picks (meg). so board civil war continues with benchmarks dirty tricks like this sour grapes lawsuit and selective leaks to undercut and force mgmt's hand in cost cuts (the lease car data earlier this week)
Benchmark Capital Sues Travis Kalanick for Fraud
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Re: Benchmark Capital Sues Travis Kalanick for Fraud
#62Benchmarks in a bind and at war with travis; they need to liquidate their stake in next year or two. Softbank deal to buy out their shares fell apart in part b/c no CEO. Benchmark wants safe-hands leader who will cost-cut firesale their way to quick IPO. travis + allies being more long term; blocking benchmarks CEO picks (meg). so board civil war continues with benchmarks dirty tricks like this sour grapes lawsuit an…
Why do they "need" to liquidate in the next year or two?
Re: Benchmark Capital Sues Travis Kalanick for Fraud
#63If actual fraud is not found what sort of message does this send to entrepreneurs that Benchmark is founder friendly? Looks like a grudge match to me. Apparently unhappy with merely removing Travis from the CEO's chair they want to make certain he's never allowed to ever enter the building.
There's way too much money at stake here for this to be driven by grudges, emotions, or even reputations. Benchmark's stake in Uber is worth $9.1b -- many, many times the size of their fund. They will do anything they can to protect this investment. They very likely believe that the best way to protect their investment is to keep Travis out, and this is part of the process. Decisions like this aren't made at an indiv…
> There's way too much money at stake here for this to be driven by grudges, emotions, or even reputations.
But that's precisely what happens. It is human nature. Money makes people emotional, greedy, envious, and short-sided. It takes exceptional and very rare discipline (see Warren Buffett) to not be emotional in investing/business.
Re: Benchmark Capital Sues Travis Kalanick for Fraud
#64Benchmarks in a bind and at war with travis; they need to liquidate their stake in next year or two. Softbank deal to buy out their shares fell apart in part b/c no CEO. Benchmark wants safe-hands leader who will cost-cut firesale their way to quick IPO. travis + allies being more long term; blocking benchmarks CEO picks (meg). so board civil war continues with benchmarks dirty tricks like this sour grapes lawsuit an…
Why do they "need" to liquidate in the next year or two?
Prob because the lifetime of the fund that invested is coming to an end? It's usually 10 years
Re: Benchmark Capital Sues Travis Kalanick for Fraud
#65If actual fraud is not found what sort of message does this send to entrepreneurs that Benchmark is founder friendly? Looks like a grudge match to me. Apparently unhappy with merely removing Travis from the CEO's chair they want to make certain he's never allowed to ever enter the building.
> Apparently unhappy with merely removing Travis from the CEO's chair
Travis wasn't removed from CEO chair. He resigned temporarily due to passing of his late mother. He himself said multiple times once he is done greaving, he plans to come back.
Re: Benchmark Capital Sues Travis Kalanick for Fraud
#66Earlier quoted context omitted.
Given human nature, widespread belief in consequentialism as an ethical system would likely result is very bad consequences. So from the position that consequentialism is correct it is probably unethical to advocate as a correct viewpoint.
What if (purely hypothically) all consequentialists could agree on the same set of standards for what constitutes positive and negative utility?
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Re: Benchmark Capital Sues Travis Kalanick for Fraud
#67Earlier quoted context omitted.
Why do they "need" to liquidate in the next year or two?
Prob because the lifetime of the fund that invested is coming to an end? It's usually 10 years
What is the lifetime of the fund? Just the amount of time that the VC firm has said they would have all the money (and more!) back to the limiteds? Clearly that's not a hard deadline, right?
Re: Benchmark Capital Sues Travis Kalanick for Fraud
#68Earlier quoted context omitted.
If there wasn't anything bad in the report we wouldn't be having this conversation.
If there was anything bad in the report they would have come out and said so in the complaint. It's not a magic game of telephone. they would have had a material impact on Benchmark's decision is probably the weakest possible complaint.
Benchmark has a very strong interest in not publishing more negative stuff about Uber than they absolutely have to to gain control. They're the largest shareholder and need to liquidate their position in the near future; any wrongdoing beyond what they absolutely must claim to get a judge to hear their evidence behind closed doors is not in their self-interest.
Re: Benchmark Capital Sues Travis Kalanick for Fraud
#69Earlier quoted context omitted.
Why do they "need" to liquidate in the next year or two?
Prob because the lifetime of the fund that invested is coming to an end? It's usually 10 years
VC fund lifetimes put a hard time frame of <= 10 years on required liquidity, forcing founders (who have given up board seats to get those investments) to do things they wouldn't ordinarily do. It's a pretty perverse incentive, and I see the attraction of not taking outside money.
Re: Benchmark Capital Sues Travis Kalanick for Fraud
#70In my best Nelson Muntz voice: "Ha-ha". The VCs have done this to themselves. They put up all the money, they should have never allowed themselves to be put into this situation. Decades ago, when I was at startups, this was 100% clear, cut and dried. The Golden Rule. People who have the gold make the rules. I'm sure this won't be a popular opinion, since more HN readers are founders and employees than are VCs. But do…
VCs don't invest their own money. As an LP actually putting up capital, do you prefer your portfolio companies to be run by founders (expert in their particular business, lots of skin in the game in the form of common stock, idiosyncratic compared to your other portfolio companies' leaders, sometimes a little too conservative for a well diversified investor like you), or VC partners (expert in capital allocation, somewhat misaligned incentives, also involved in managing your other portfolio companies, likely too aggressive for an investor with actual downside like you)? It's not that obvious that the latter is an improvement.