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. 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.
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