Travis Kalanick certainly has had a love-hate relationship with VCs over his career. As the founder of Uber he was a VC darling, raising what was then an unprecedented roughly $15 billion in venture funding during his tenure. Then, a boardroom battle with key investor Bill Gurley of venture firm Benchmark led to him being pushed out in 2017.
Now, he’s back raising mega funds for his robotics company Atoms, which just nabbed $1.7 billion, led by Andreessen Horowitz, with Ben Horowitz joining the company’s board.
In an episode of David Senra’s podcast that aired last weekend, Kalanick made clear he’s still salty about the Uber boardroom battle and that he tells founders not to raise from Benchmark. (His animus hasn’t seemed to have catastrophically damaged the venerable fund. It just raised another $2 billion across two new funds in June.)
His worldview on VCs is generally low, and it’s not based on just one traumatic experience. Kalanick, who has formed numerous companies across his career, warns that “a super high bar for a VC is ‘do no harm,’” yet, in his experience, just 10% of the VCs out there are capable of meeting that bar.
A far smaller percentage — “1%” by his estimate — are actually “helpful,” he told Senra. “But it’s hard. How the f* are they supposed to be helpful? … It’s hard for them to participate because they just aren’t in that deep.” On the podcast, he compared a founder to the “chess master” of the company, while the VC is a “chess enthusiast” that drops in once in a while to check the progress of the game.
The relationship, he suggests, is inescapably complicated. All people want to have an impact in the world, so when a founder doesn’t listen to the investor’s advice, that’s “a hard thing” for many VCs to take, particularly given that “VCs are glamorized, and they do have a seat at the table. And they have certain powers and they can make a mark,” Kalanick said.
Still, Kalanick isn’t telling founders to avoid VC money. In fact, he advises founders to have a pitch so honed that it creates a bidding war among firms to sweeten their deals. For instance, one tip he offers for today’s super-hot fundraising atmosphere is to share a modestly detailed plan. Too little detail obviously won’t attract funding. But too much detail is off-putting. When the AI world is moving so fast, no one can predict too far into the future; it comes off as naive.
In his telling, that same instinct toward accountability shapes how he talks about his own board battle. Kalanick doesn’t tell founders to be more careful about who they let onto their cap table. The bigger risk, he says, is falling into a “victim mentality.”
“You have to be really careful not to get into victim mentality,” is his advice. “By that, I mean, what was my part in that dynamic?” he says.
Kalanick believes, for instance, that he didn’t handle all the relationships with disgruntled people well enough. More than that, he now realizes that his management style was an issue.
While he stands by all the decisions he made at Uber and says he broke no rules, he says the optics were a problem. “The problem was I ran too close to the line in too many situations. When you are big and important, the scrutiny and the expectation is that you don’t run that close to the line, even if it’s correct. And that is a thing I definitely did not understand.”
Kalanick says his hard-charging style was a result of his previous startup, Red Swoosh, which was a slog. “First four years, no salary, ran out of money several times, like a super grind, like lose all friends, like everything was just the hardest,” he told Senra. He eventually sold it.
“It was so hard, that I had to be epically precise and hard core just to pay the bills and go to the grocery store the next week,” he said. “That precision and intensity made Uber what it was. But I was running a $70 billion company the way somebody who thought he was going to starve next week would run it.”
Kalanick isn’t the only one revisiting old VC grievances this week. Serial entrepreneur Mark Pincus used the podcast as a jumping-off point on social media to air his own history with Accel, which led an investment in his company Support.com during the dot-com era. Pincus wrote that the firm went on what he called a “jihad” to replace him as CEO over his age and inexperience running a public company. Other founders piled on with their own accounts, naming additional firms they say have pushed out company leaders.
Andreessen Horowitz, which is leading the round in Kalanick’s new company, was quick to amplify the moment, posting a string of tweets this week pointing followers back to the podcast episode. The firm’s enthusiasm isn’t entirely disinterested. Gurley and a16z co-founder Marc Andreessen have their own history of public friction. In a 2015 New Yorker profile, Andreessen called Gurley “my Newman,” a reference to Jerry Seinfeld’s nemesis on “Seinfeld.”
Gurley did not immediately respond to a request for comment.
