Gurley reveals five investors including Fidelity felt all Uber constituents were at risk before taking action.
“So people typically say benchmark, but there was five investors, including Fidelity, who felt like all of the constituents at Uber were at risk, if action didn't happen sooner.”
Gurley argues excessive capital availability lets entrepreneurs run without discipline since they never get regraded.
“I guess the thing I would say is that, you know, the excessive amount of capital that's been available to Silicon Valley has allowed a lot of entrepreneurs to run without much discipline because if you if if you're not running out of money, you're not constantly being regraded”
Gurley argues excessive capital allows entrepreneurs to run without discipline by avoiding constant regrade cycles.
“I guess the thing I would say is that, you know, the excessive amount of capital that's been available to Silicon Valley has allowed a lot of entrepreneurs to run without much discipline because if you if if you're not running out of money, you're not constantly being regraded and asked to come back to the table.”
Gurley argues excessive capital in Silicon Valley allows entrepreneurs to run without discipline or accountability.
“The the I guess the thing I would say is that, you know, the excessive amount of capital that's been available to Silicon Valley has allowed a lot of entrepreneurs to run without much discipline because if you if if you're not running out of money, you're not constantly being regraded and asked to come back to the table.”
Gurley says Uber's entire stakeholder base was at risk before leadership change.
“We reached a point where we felt like, you know, the entire company, you know, and all of its constituencies, drivers, riders, employees, shareholders, were at risk if the company continued to move in the direction it was.”
Gurley argues being public helps companies run better through enforced discipline and smart questioning.
“one of the things that I believe strongly that I think is less well understood is that being public actually helps the companies run better. It's an enforced discipline.”
Gurley says competitive dynamics have eliminated stewardship for discipline and results in venture capital.
“And I think it's led to a situation where there's not a lot of of stewardship for discipline and and results and that kind of thing.”
Gurley argues governance tokens without economic rights would be worth a small fraction of tokens with revenue capture.
“And everything from my history of studying finance and economics would say that if you declared you'd never rake the system governance token, simply the right to kind of control a group or community would be worth a fraction, a small fraction of what an economic token would be.”
Gurley says new non-financial objectives injected into startups make execution harder when employees and executives aren't aligned.
“In the past five years, there have been objective functions injected into startups that aren't solely how well is the company doing or how well is the company stock doing.”
Gurley criticizes FTX investors for funding a company with no board and commingled businesses.
“I mean, the markets have a way of separating, very risk seeking individuals from their capital. It may not happen overnight, but it always happens eventually. Like there's no easy money.”
Gurley links VC cheerleading behavior directly to governance failures like FTX.
“The problem is that's the exact same type of behavior that leads to the FTX situation because you take yourself out of a governance role completely because you just become the founder cheerleader.”
Gurley says every VC speaking publicly is performing for future founders, creating pressure to look supportive.
“There is so much important criticality in getting in front of the right pitches that everyone wants to look like the best actor.”
Gurley questions investors who funded FTX despite no board and commingled businesses.
“I love the FTX story, not because I wanna pick on anybody, but to make the decision to give money to somebody that has no board and that has a side business that's commingled, who tells you it's not commingled, it turns out it was commingled. Like, what are you doing?”
Gurley says FTX investors ignored basic governance red flags including no board and commingled side business.
“I love the FTX story, not because I wanna pick on anybody, but to make the decision to give money to somebody that has no board and that has a side business that's commingled, who tells you it's not commingled, it turns out it was commingled.”
Gurley criticizes investors earning 2% annual fees on $300-400M checks without taking board seats.
“And for the listeners that may not know that 2 represents an annual management fee,”
Gurley says VCs earn two and twenty writing $300-400M checks without taking board seats.
“But like these people are getting two and twenty to write a check for 3 or $400,000,000 and not take a board seat.”
Gurley argues successful sovereign wealth funds exist in autocracies not democracies and US fund would face political raiding.
“And I would highlight that probably the most successful sovereign wealth funds in the world are all in autocracies. They're not in democracies.”
Gurley quotes Dan Wong saying America is run by lawyers while China is run by engineers.
“I think Dan Wong does a good job of saying that America is run by lawyers the author of of Breakneck. Our country's run by lawyers and theirs is run by engineers.”
Gurley says he would agree to Elon's Tesla pay structure for every company, but ISS evaluators oppose it.
“And I would do that deal over and over and over and over again. None of these ISS like evaluators agree with that.”
Gurley says people elect officials based on intentions without tracking whether they create actual change.
“And I think we elect a lot of people because we like what they're saying, but no one follows up to see if they can actually create change.”