Silicon Valley Investors Flexed Their Muscles in Uber Fight
“Because companies have been able to raise capital from all of these sources at high valuations, there has been a delay in the growing-up process,”
said Jeffrey Bussgang, a general partner at the venture firm Flybridge Capital Partners and a professor at Harvard Business School.
“There’s no question that founder power peaked in 2015
and we’ve been two years into normalizing,” said Paul Martino, a partner at the venture firm Bullpen Capital.
In 2016, $333.5 billion was directed into the venture capital industry, compared with $213.7 billion
in 2006, according to data from the National Venture Capital Association and Pitchbook.
The percentage of company financing rounds that gave extra voting rights to founders
and early investors nearly doubled from 2014 to 2016 — to about 39 percent, from 20 percent — according to data from the law firm Fenwick & West.
At Uber, Mr. Kalanick may have had a path to outvoting the investors who asked for his resignation, including
Benchmark, First Round Capital, Lowercase Capital, Menlo Ventures and Fidelity Investments.
When venture investors become board members at a very young company, they can think about their funds and founders first,
but later on they have fiduciary responsibility to all shareholders, Mr. Bussgang said