4 ms·

Come on, guys. You all are smart enough to read between the lines. Benchmark is desperate to get out. Why do you think that is? Do you think they'd be all hand

Come on, guys. You all are smart enough to read between the lines. Benchmark is desperate to get out. Why do you think that is? Do you think they'd be all hands on deck trying to get out of a rocket ship investment? Of course not. Uber's unit economics are garbage, and will remain garbage until self-driving technology becomes universal. That will not happen in a timeframe that Benchmark is comfortable with - or to put it another way, within the preferred close dates of their fund - and even if it did, they clearly have little confidence that the current leadership (or lack thereof) are the right operators, either now or in the future. The ship is sinking. They want out. Softbank wants in - for reasons I can't understand other than they have the money and want to spray it around aimlessly - and this bit of messiness is surely throwing a wrench into the plans.

furioussloth 9y ago
As much as you and many on the HN like it. Ship is not sinking at least not any time soon. If all they wanted was a way out why tarnish their own image by filing this law suit and make benchmark look less founder-friendly and supposedly create leaks which make Uber look even worse. Making Uber look like a bad investment is possibly something they don't want to do if they want $$$ for their existing shares.
- leroy_masochist 9y ago
  > If all they wanted was a way out why tarnish their own image by filing this law suit and make benchmark look less founder-friendly and supposedly create leaks which make Uber look even worse. Because they're trying to shape the battlespace of public debate to create the best possible conditions for a resolution of this standoff in a way that gives them liquidity for their investment at a valuation approaching Uber's last round.
- warcher 9y ago
  I'd like to hear your reasoning that the ship isn't sinking. My reasoning is their burn rate, unit economics, the writedowns, and VC's taking some controversial hardball steps to protect downside risk. Since they're private, there's not much real data to be had, but that's a lot of smoke for no fire. Anecdotally, I have seen up close what it looks like when suit-and-tie MBA types start looking for the emergency exit, and this smells right. BUT What I don't know would fill volumes-- whaddya got?
  - alphast0rm 9y ago
    A paper titled "Squaring Venture Capital Valuations with Reality" [1] was recently published by students at Stanford GSB that put forth a new model for valuing privately held companies [2]. If you consider "Table 8: Detailed Unicorns Fair Values and Post-money Valuations", Uber objectively has one of the smallest deltas of all valuations listed at 12% (bested only by Snapchat and Lyft out of ~100 companies). [1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2955455 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2955455 [2] https://www.gsb.stanford.edu/insights/silicon-valleys-unicorns-are-overvalued https://www.gsb.stanford.edu/insights/silicon-valleys-unicor...
    - warcher 9y ago
      I only skimmed these papers, but they seemed to be dealing with contract terms that caused later shares to have value not totally reflected in the per-share price, including but not limited to things like ratchets and liquidation preferences. Such that the valuation is that of a "unicorn" but that some conditions may apply if you want to realize that investment. Nowhere did I find reference to the economics of Uber justifying their valuation. I should clarify my point: I don't think Uber is worth what they think they're worth based on the fundamentals. Certainly a bunch of tricky contracts could exacerbate that, but I think everybody bought into Uber at a valuation they were never going to sustain, and the ship is slowly crashing back to earth.
ryanwaggoner 9y ago
Softbank wants in - for reasons I can't understand other than they have the money and want to spray it around aimlessly Right, so the smart money is the money that agrees with you, and the investors willing to sink billions into Uber must just be stupid. It's so obvious, guys.
calvinbhai 9y ago
Softbank has its fingers in all the major ride hailing, on demand companies (Ola, Didi, Grab etc) and getting a hold in Lyft or Uber helps them slowly grow more command on the whole market. That's the only play by Softbank that may make sense

furioussloth 9y ago

As much as you and many on the HN like it. Ship is not sinking at least not any time soon. If all they wanted was a way out why tarnish their own image by filing this law suit and make benchmark look less founder-friendly and supposedly create leaks which make Uber look even worse. Making Uber look like a bad investment is possibly something they don't want to do if they want $$$ for their existing shares.

leroy_masochist 9y ago
> If all they wanted was a way out why tarnish their own image by filing this law suit and make benchmark look less founder-friendly and supposedly create leaks which make Uber look even worse. Because they're trying to shape the battlespace of public debate to create the best possible conditions for a resolution of this standoff in a way that gives them liquidity for their investment at a valuation approaching Uber's last round.
warcher 9y ago
I'd like to hear your reasoning that the ship isn't sinking. My reasoning is their burn rate, unit economics, the writedowns, and VC's taking some controversial hardball steps to protect downside risk. Since they're private, there's not much real data to be had, but that's a lot of smoke for no fire. Anecdotally, I have seen up close what it looks like when suit-and-tie MBA types start looking for the emergency exit, and this smells right. BUT What I don't know would fill volumes-- whaddya got?
- alphast0rm 9y ago
  A paper titled "Squaring Venture Capital Valuations with Reality" [1] was recently published by students at Stanford GSB that put forth a new model for valuing privately held companies [2]. If you consider "Table 8: Detailed Unicorns Fair Values and Post-money Valuations", Uber objectively has one of the smallest deltas of all valuations listed at 12% (bested only by Snapchat and Lyft out of ~100 companies). [1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2955455 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2955455 [2] https://www.gsb.stanford.edu/insights/silicon-valleys-unicorns-are-overvalued https://www.gsb.stanford.edu/insights/silicon-valleys-unicor...
  - warcher 9y ago
    I only skimmed these papers, but they seemed to be dealing with contract terms that caused later shares to have value not totally reflected in the per-share price, including but not limited to things like ratchets and liquidation preferences. Such that the valuation is that of a "unicorn" but that some conditions may apply if you want to realize that investment. Nowhere did I find reference to the economics of Uber justifying their valuation. I should clarify my point: I don't think Uber is worth what they think they're worth based on the fundamentals. Certainly a bunch of tricky contracts could exacerbate that, but I think everybody bought into Uber at a valuation they were never going to sustain, and the ship is slowly crashing back to earth.

ryanwaggoner 9y ago

Softbank wants in - for reasons I can't understand other than they have the money and want to spray it around aimlessly Right, so the smart money is the money that agrees with you, and the investors willing to sink billions into Uber must just be stupid. It's so obvious, guys.

calvinbhai 9y ago

Softbank has its fingers in all the major ride hailing, on demand companies (Ola, Didi, Grab etc) and getting a hold in Lyft or Uber helps them slowly grow more command on the whole market. That's the only play by Softbank that may make sense