In the Hot Seat: Investor Sues Former Uber CEOAugust 11, 2017 8:54 am
Benchmark also alleged in the suit that had it would never have permitted the seat increase from eight to 11 had it been aware of the “gross mismanagement and other misconduct at Uber.” It claims that by hiding the wrongdoings, Kalanick defrauded the directors into expanding the board and devised a way to maintain control even after his resignation. In fact, Kalanick assumed one of the three seats when he left the company.
“Benchmark’s lawsuit marks a rare instance of a Silicon Valley investor suing the central figure at one of its own start-ups. The well-regarded venture firm was an early investor in Uber and said in the lawsuit that it owns 13 percent of Uber and controls 20 percent of the voting power.”
Reuters also reported that the reaction among tech investors in Silicon Valley has been one of surprise as this is “the nuclear option” for a venture firm like Benchmark. The firm has a $9 billion stake in the $68 billion company.