5 ms·

How else should the investor respond? In many situations (I don't know enough about this one) I don't think it's acceptable to say nothing; it's effectively tac

How else should the investor respond? In many situations (I don't know enough about this one) I don't think it's acceptable to say nothing; it's effectively tacit support.

rdl 10y ago
Unclear. It's a tough situation. I wouldn't consider one of the (100?) investors Uber has to be responsible for Uber's actions, particularly since they're famous for ignoring their investors. Investors are most responsible for the investment decision itself; if they knowingly invested in Uber today, that's a different statement IMO than investing in Uber 4 years ago. I would still prioritize fiduciary duty and privileged information/position as an advisor over anything else, unless there were criminal activity, in which case I'd bring it to the attention of the board and correct authorities. I think you can criticize Travis and management a lot in private, and ultimately push for changes in management (although I don't think anyone would benefit from removing Travis!). Doing things in public is not helpful, though. The other really helpful thing is probably a good reporting pipeline for employees if they think something criminal or illegal or unethical is happening. Less of an issue in a company the size of Uber (there SHOULD have been a way to report to someone...HR was weak, but legal/CFO?). In a smaller company, I'd consider an investor a good proxy for that.
- Anechoic 10y ago
  I think you can criticize Travis and management a lot in private, It sounds like that's what they've been doing ("We are speaking up now because we are disappointed and frustrated; we feel we have hit a dead end in trying to influence the company quietly from the inside."). If the private approach doesn't work, what should one do?
  - rdl 10y ago
    Accept that they possibly can't fix Uber, and focus on making/helping other investments.
    - elygre 10y ago
      If your neighbor is beating his wife, and he won't stop when you talk to him privately, you have two options: You go public, or you accept that you can't fix him, and move on.
    - anigbrowl 10y ago
      It seems like they feel some responsibility for having put money into a business where toxicity was tolerated, and also that their trust in Uber's management has been breached. Why do you think it's so important that they keep their views private rather than state them publicly?
      - rdl 10y ago
        I have a pretty bright-line rule: investors should not be publicly critical of portfolio companies or founders. This situation does test it, but in general I think investors, founders, and society are better off with that rule than without it. (Doesn't apply to public companies, since you're appealing to potential co-investors. Doesn't apply in cases of criminal/etc. behavior when a founder or manager is replaced.)
        st3v3r 10y ago
        And I don't. I believe that investors who would be quiet in this situation have shown that they have absolutely no scruples or morals.
        anigbrowl 10y ago
        I understand what your position is, but I'm asking why you hold it. I have two reasons for asking this. First, criminality seems a really low bar to set before you can speak up about an ethical issue, and second, not speaking up about questionable ethical behavior often enables criminality to continue - Bernie Madoff springs to mind as a simplistic example.
        rdl 10y ago
        I hold it because there's a huge value to being able to 100% trust your team/investors, and compromising it even for "cause" harms that, and on balance, is a bigger problem. There are ~7b other people who can call out Uber's behavior who are NOT Uber investors. I don't think any particular value was added in this coming from Kapor vs., say, EKP. There are a lot of people who are not Uber employees or investors who have even more moral credibility here, too.
- hackuser 10y ago
  > I wouldn't consider one of the (100?) investors Uber has to be responsible for Uber's actions Not fully responsible, but still responsible. IMHO we are accountable for the consequences of our actions. As an extreme example, I shouldn't fund someone who uses slave labor. If I knowingly funded someone's violent, criminal act, I would go to jail.
  - rdl 10y ago
    I think the bar for criticizing an existing portfolio company should be far higher than the bar for declining to make an investment (and potentially telling the company why you're declining...not often done, but if it's due to a moral reason, probably worth it.) Criminal activity is clearly a line which can't be crossed even for existing portfolio, but I don't think an investor is the one in a position to deal with that -- it's more for regulators. Exiting the investment is probably the course I'd take before publicly calling out a portfolio company, for "non-criminal but terminally bad-for-brand" reasons. Internal corporate governance (board/shareholder actions) would be before that, and extreme internal pressure before that. I'm absolutely not calling for investors to just let stupid stuff pass; I just don't blame investors for not taking action when not required, and I think there's a defined escalation path which doesn't include an open letter to a portfolio company which isn't public.

How else should the investor respond? In many situations (I don't know enough about this one) I don't think it's acceptable to say nothing; it's effectively tacit support.

rdl 10y ago

Unclear. It's a tough situation. I wouldn't consider one of the (100?) investors Uber has to be responsible for Uber's actions, particularly since they're famous for ignoring their investors. Investors are most responsible for the investment decision itself; if they knowingly invested in Uber today, that's a different statement IMO than investing in Uber 4 years ago. I would still prioritize fiduciary duty and privileged information/position as an advisor over anything else, unless there were criminal activity, in which case I'd bring it to the attention of the board and correct authorities. I think you can criticize Travis and management a lot in private, and ultimately push for changes in management (although I don't think anyone would benefit from removing Travis!). Doing things in public is not helpful, though. The other really helpful thing is probably a good reporting pipeline for employees if they think something criminal or illegal or unethical is happening. Less of an issue in a company the size of Uber (there SHOULD have been a way to report to someone...HR was weak, but legal/CFO?). In a smaller company, I'd consider an investor a good proxy for that.

Anechoic 10y ago
I think you can criticize Travis and management a lot in private, It sounds like that's what they've been doing ("We are speaking up now because we are disappointed and frustrated; we feel we have hit a dead end in trying to influence the company quietly from the inside."). If the private approach doesn't work, what should one do?
- rdl 10y ago
  Accept that they possibly can't fix Uber, and focus on making/helping other investments.
  - elygre 10y ago
    If your neighbor is beating his wife, and he won't stop when you talk to him privately, you have two options: You go public, or you accept that you can't fix him, and move on.
  - anigbrowl 10y ago
    It seems like they feel some responsibility for having put money into a business where toxicity was tolerated, and also that their trust in Uber's management has been breached. Why do you think it's so important that they keep their views private rather than state them publicly?
    - rdl 10y ago
      I have a pretty bright-line rule: investors should not be publicly critical of portfolio companies or founders. This situation does test it, but in general I think investors, founders, and society are better off with that rule than without it. (Doesn't apply to public companies, since you're appealing to potential co-investors. Doesn't apply in cases of criminal/etc. behavior when a founder or manager is replaced.)
      - st3v3r 10y ago
        And I don't. I believe that investors who would be quiet in this situation have shown that they have absolutely no scruples or morals.
      - anigbrowl 10y ago
        I understand what your position is, but I'm asking why you hold it. I have two reasons for asking this. First, criminality seems a really low bar to set before you can speak up about an ethical issue, and second, not speaking up about questionable ethical behavior often enables criminality to continue - Bernie Madoff springs to mind as a simplistic example.
        rdl 10y ago
        I hold it because there's a huge value to being able to 100% trust your team/investors, and compromising it even for "cause" harms that, and on balance, is a bigger problem. There are ~7b other people who can call out Uber's behavior who are NOT Uber investors. I don't think any particular value was added in this coming from Kapor vs., say, EKP. There are a lot of people who are not Uber employees or investors who have even more moral credibility here, too.
hackuser 10y ago
> I wouldn't consider one of the (100?) investors Uber has to be responsible for Uber's actions Not fully responsible, but still responsible. IMHO we are accountable for the consequences of our actions. As an extreme example, I shouldn't fund someone who uses slave labor. If I knowingly funded someone's violent, criminal act, I would go to jail.
- rdl 10y ago
  I think the bar for criticizing an existing portfolio company should be far higher than the bar for declining to make an investment (and potentially telling the company why you're declining...not often done, but if it's due to a moral reason, probably worth it.) Criminal activity is clearly a line which can't be crossed even for existing portfolio, but I don't think an investor is the one in a position to deal with that -- it's more for regulators. Exiting the investment is probably the course I'd take before publicly calling out a portfolio company, for "non-criminal but terminally bad-for-brand" reasons. Internal corporate governance (board/shareholder actions) would be before that, and extreme internal pressure before that. I'm absolutely not calling for investors to just let stupid stuff pass; I just don't blame investors for not taking action when not required, and I think there's a defined escalation path which doesn't include an open letter to a portfolio company which isn't public.