Travis Kalanick: Only 1% of venture capitalists actually help founders
Uber founder Travis Kalanick said that, in his estimation, only about 1% of venture capitalists are truly helpful to startup founders. He made these remarks on David Senra’s podcast after raising $1.7 billion for his robotics company, Atoms. The funding round was led by Andreessen Horowitz.
According to Kalanick, approximately 10% of venture capitalists are capable of adhering to the basic principle of “do no harm.” He believes that it is difficult for investors to be helpful because they are not deeply immersed in the company’s operations. The entrepreneur compared a founder to a chess master and a venture capitalist to an enthusiast who checks in on the game from time to time.
At the same time, Kalanick did not urge founders to completely reject venture capital. He recommends preparing a presentation in such a way that competition for the deal arises among the funds. In his view, startups should provide a plan with a moderate level of detail: too little information won’t attract funding, while an overly detailed plan may seem naive given the rapid changes in the field of artificial intelligence.
Read more breaking news on the UA.News Telegram channel.
The entrepreneur also revisited the conflict on Uber’s board of directors, following which he was ousted from the company in 2017. One of the key investors at the time was Bill Gurley of Benchmark. Kalanick stated that he advises founders not to seek funding from Benchmark. At the same time, according to TechCrunch, the firm raised an additional $2 billion in June for two new funds.
Speaking about his own experience at Uber, Kalanick acknowledged that he did not manage relationships with dissatisfied people well enough, and that his management style was a problem. He stated that he did not break any rules, but too often pushed the boundaries of what was acceptable and failed to take into account the level of scrutiny a large company faces. According to him, his tough management style developed while working on his previous startup, Red Swoosh: for the first four years, he received no salary, and the company ran out of funds several times.
Ben Horowitz, a co-founder of Andreessen Horowitz, has joined Atoms’ board of directors. TechCrunch also notes that there had previously been a history of public tension between Gurley and Andreessen Horowitz co-founder Marc Andreessen.
