
Uber shareholder group wants Benchmark off board - quant
https://www.axios.com/exclusive-uber-shareholder-group-wants-benchmark-off-board-2471805592.html
======
elmar
Some startup founders are ‘nervous’ about dealing with Benchmark after it sued
Uber

[https://www.recode.net/platform/amp/2017/8/11/16130148/bench...](https://www.recode.net/platform/amp/2017/8/11/16130148/benchmark-
uber-startup-founder-backlash-lawsuit)

~~~
calafrax
nervous about working with competent investors who aren't complete marks?
somehow I doubt benchmark will have difficulty finding people to take their
money.

~~~
hkmurakami
It may matter, since VC returns are dominated by the outlier companies that
return 100x.

If the next Slack (i.e. companies where VCs form a line to have them take
their money) always pass on Benchmark after remembering this, instead choosing
to take money from Sequoia/A16Z/NEA etc., who are also competent investors who
aren't complete marks, then returns may take a hit.

~~~
aetherson
I mean, maybe. But Benchmark is heavily bought into Uber. They've got a lot to
lose/gain here. And they have a reputation to defend not just with future
founders, but also future LPs. You can bet that there are a lot of potential
LPs looking at VC behavior here, and that ones who are deferential to Kalanick
will have a harder time raising future funds if this whole thing goes tits up.

Benchmark clearly believes that Kalanick is toxic to Uber's success. Given the
amount of money they have in the game, and given the belief that Kalanick will
sink Uber, it's pretty hard for me to come up with odds that future founders
will be Benchmark-averse that overcome the amount of money they have in play
with Uber plus whatever heat they'll take from their LPs.

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throwawy11111
Benchmark board seat is the rumored anon source of several of the negative
stories about the company the last few months. As Gurleys patience with Travis
soured, their strategy shifted to stoking the PR crisis deeper so they can
purge management and gain control. Other shareholders and employees should
rightly be outraged.

~~~
WisNorCan
Any evidence? The biggest crises seem to be outside of the board’s visibility:
(1) Susan Fowler (2) TK berating a driver on video (3) TK and his exec team
having a file on rape of someone in india (4) Greyball etc. etc.

I think it is hard to argue that Benchmark made Suzan Fowler write her blog
post etc.

The counter argument is that Benchmark seems like the grown up and Uber is
lucky to have them on their BoD.

~~~
_kyran
The whole Waymo thing seems like quite a big crisis as well.

~~~
WisNorCan
Yes and self-inflicted as well. Hard to blame on Benchmark.

I worry that HN is being astroturfed by TK and his buddies. When there is a
negative Uber story a throwaway account emerges to present an implausible pro-
TK angle.

~~~
throwawy11111
Y'know, there is a third position where one can be in support of neither
Benchmark nor Travis.

Benchmark obviously did not cause Susan Fowler, Waymo, Greyball or the rape-
file. Travis deserved what he got or worse.

What Benchmark has done is continue to leak negative stories and internal data
to gain leverage in boardroom spats. Without pointing fingers this is more or
less acknowledged internally. And now they've instigated a very public lawsuit
to drag everyone back through the muck. It completely undercuts the majority
of thousands of employees who were not complict in any of the above and having
been fighting desperately to right the ship.

If Benchmarks position is so righteous and self-evident why can't they just
convince the other board members to remove him? No one's that strongly allied
with Travis anymore. Ryan Graves and Garrett Camp both publicly declared
theyre not voting him back in. There hasn't been a peep from Arianna in
months. All the other directors are independent or external investors.

And btw the real fire from Benchmark didnt start until Travis rallied to have
Bonderman, Benchmark ally, immediately step down after making mysognist
comments at the Holder report all-hands. A role reversal which epitomizes the
deeper truth here -- none of this is particularly about ethics; its about
money, control and liquidity.

~~~
evanweaver
Bonderman off the board after one insulting comment. Travis not off after
"Susan Fowler, Waymo, Greyball or the rape-file." There is no equivalency
here.

But even if, implausibly, Benchmark is the messenger, shooting the messenger
is still wrong.

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evv
So Benchmark is suing Uber and Kalanick because they are worried about getting
their money out- 13% of Uber is almost $9B.

Now Uber claims to have other investors ready, willing to buy back over $6B of
that stock. If that were the case, then wouldn't Benchmark have already
divested?

Who is willing to invest $6B into Uber when it has no CEO and such an
astronomical valuation?

~~~
petergatsby
Softbank

~~~
evv
Latest news seems to indicate that Softbank is considering investing at a
~$40B valuation.. considerably lower than the $69B number floating around. And
although it is probably just a negotiation tactic, they claim to be
considering an investment in Lyft instead.

[https://www.recode.net/2017/8/7/16110020/benchmark-
softbank-...](https://www.recode.net/2017/8/7/16110020/benchmark-softbank-
uber-negotiating-investment-exit)

[https://www.cnbc.com/2017/07/31/softbank-talks-to-invest-
in-...](https://www.cnbc.com/2017/07/31/softbank-talks-to-invest-in-uber-are-
dead-sources-tell-cnbc.html)

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giarc
I've only discovered Axios in the past few days but I really like their
writing style. It's quick and to the point. Reading their About Us section, it
seems like this was the goal "Stories are too long. Or too boring."

~~~
RobSim
Off topic: I love Axios - they have some top tier journalists, and I was
introduced when Dan Primack (from fortunes termsheet originally) moved over.
They do great newsletters on politics, m&a/VC, tech, and the future of work.

~~~
sureshv
+1 on the Pro Rata newsletter.

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jaypaulynice
What a saga...Benchmark to Kalanick: resign....Shareholders to Benchmark: you
resign....lol

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kkhire
I remember once watching an interview with Travis talking about pitching Uber
to Benchmark, and he talked about how they wouldn't let him leave the office
until they agreed on terms.

eerily similar battle going on now

~~~
flunhat
I think I found the video:
[https://youtu.be/550X5OZVk7Y?t=58m30s](https://youtu.be/550X5OZVk7Y?t=58m30s)

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tlogan
This seems like fight between two fractions in the Uber. On the one side, it
is Benchmark capital while the other side there is Travis and investors
aligned with him.

What is uber ownership breakdown? What do you think who will win?

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nostrademons
> Who will win?

Lyft.

~~~
gsnedders
How much of Uber's income comes from the US market v. overseas? As long as
Lyft is US-only, they're potentially going to have a hard time equalling Uber.

~~~
nostrademons
Lyft is going global:

[https://www.cnbc.com/2017/01/13/lyft-to-go-global-take-on-
ub...](https://www.cnbc.com/2017/01/13/lyft-to-go-global-take-on-uber-outside-
the-us.html)

~~~
malandrew
> But Lyft told CNBC, "Along with our international partners, we are updating
> how we serve our users traveling abroad. We will now direct them to download
> the partner's app in the country they are visiting."

So basically they aren't going global.

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jpace121
This whole situation has to be impeding Uber's CEO search. Finding someone
willing to step into this kind of circus, particularly when the circus is over
there heads, is going to be very hard.

~~~
vkou
There is reason to believe that the CEO search will narrow down to re-
instating Travis.

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abritinthebay
I'll take "Things that make Uber look _even more_ dysfunctional" for $800
please Alex.

~~~
tyingq
I wonder what it's like to work in Uber's PR department these days. Hopefully
someone is setting aside a year end bonus for them since they don't likely
qualify for overtime pay.

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soyiuz
The story is as old as the world. Part investors are pushing the concern to
the chagrin of other part investors. The letter seems pretty reasonable: the
under-signers are pursuing what they see as their self-interest in offering
their "fraternal" siblings a generous exit. Nothing to see here. If anything
this is good news for Uber, some of its major investors still believe in the
the company.

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mitchellst
Is the ___DO NOT PUBLISH_ __across the top of this article some kind of a
gimmick from axios, or did someone mess up pretty hard?

~~~
jsjohnst
It's gone now, so likely a mistake

~~~
anant90
Once it's published, it makes sense to just take it off either way.

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frandroid
Wow, these other investors are willing to give Benchmark a fabulous exit. I
would negotiate it up to $12B and take it!

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omarforgotpwd
That's skeptical part of my brain sees "shareholders" and thinks "friends of
Travis and / or Travis"... I mean if it comes to a vote his side still gets to
vote right?

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seem_2211
I'd be so happy with this outcome if I was Benchmark. Even exiting with a 50%
haircut (so what $4.5b) will return their funds a couple times over.

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MBCook
Do we know anything about the group? Is it a group of 2 or of 200? Do they
control 1% or 25% of shares?

~~~
SyneRyder
The full letter is included in the article, and the signatures are from three
people (representing at least two VC firms). They claim others will be adding
their names to the letter in coming days. From the article:

 _Who signed the request? Shervin Pishevar (Sherpa Capital, although signed as
an individual), Ron Burkle (Yucaipa Cos) and Adam Leber (Maverick)._

[Edit] According to Crunchbase [1], Sherpa Capital was involved in Series D
and Series E funding for Uber, while Adam Leber was an Angel investor. I
couldn't find info on Ron Burkle or Yucaipa Cos.

[1]
[https://www.crunchbase.com/organization/uber/investors](https://www.crunchbase.com/organization/uber/investors)

~~~
kwindla
Ron Burkle is a billionaire based in LA who made most of his initial money
from grocery stores (A&P). Yucaipa is his personal investing vehicle and has a
fairly high profile in the relatively rarified world of private-equity-funds-
that-invest-one-very-wealthy-person's-money.

That world is sort of the dark matter flip side of Venture Capital. A firm
like Yucaipa doesn't need to blog or tweet -- doesn't need to market itself --
because it never needs to raise money from limited partners, and it's super
flexible and agnostic about the kinds of investments it's looking for, time
horizons, and how exactly it structures deals.

~~~
SyneRyder
Thanks for that, fascinating! I searched a bit further and found out he is
also co-owner of the Pittsburgh Penguins NHL team. He seems like an intriguing
person.

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s73ver
When it rains, it pours, I guess.

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calafrax
"Benchmark's investment of $27M is worth $8.4 billion today"

"We have investors ready to acquire these shares"

So they have 8.4 billion in new funding lined up? Somehow I doubt it.

~~~
HNNoLikey
This wouldn't be so much new funding as it would be swapping equity holders.
It would be a great investment if Uber keeps growing and one day exits. And
Uber will grow - I don't think they've even scratched the surface since
logistics is still wide open, among other things. It could very easily be
another Amazon-esque juggernaut 10-15X current value.

~~~
calafrax
the statue of liberty would be a great investment if the government was
planning to tear it down and sell it for scrap and you could buy it cheap
before the word got out.

