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by arglebarnacle
3234 days ago
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Nobody put a gun to Benchmark's head and forced them to take a deal that left so much control in Kalanick's hands. It was a reflection of the relative strengths of their negotiating position at the time. Kalanick is owed control because Benchmark agreed he had control. The legal question is whether the various scandals that followed show in some way that Kalanick made that deal under fraudulent conditions. It has nothing to do with a supposed generic truism that VCs always deserve to control the companies they fund. Uber is actually a great counterexample to your rule. They appeared to be such a good investment, and so many VCs wanted in, that they were able to dictate very favorable terms. |
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I agree. Given what was negotiated, the default starting position for the lawsuit is that Kalanick is owed control.
so many VCs wanted in, that they were able to dictate very favorable terms.
That is what I failed to fully appreciate. There is so much dumb money sloshing around that it forces smart VCs like Benchmark to agree to dumb things.
Here's now a Fortune pundit described the investment a Saudi Arabian sovereign wealth fund made in Uber last year:
Uber needed the money, and where else are you going to get $3.5 billion? No doubt, it must be tough to fundraise after you've already tapped out venture capitalists, private equity firms, mutual funds, hedge funds, Wall Street high-net worth clients, and strategic corporate and other sovereign wealth funds (yes, including from noxious Qatar).
http://fortune.com/2016/06/02/ubers-no-good-very-bad-deal-wi...