I like Uber as a service. It just works.
I also like the fact that it seems to provide a lot of work for a lot of otherwise underemployed people. All of the drivers I've spoken to have said nothing but good things about it. They seem to like getting the work.
Do I think that all of the executives are bad people? No. In fact, I like all the people I know somewhat well who work there. However, it does seem like the company has a culture problem that results in bad incident after incident.
The culture seems to create a situation where bad ideas seem to fester--where "What's cool at this company?" results in very little hesitation around doing some pretty dumb things.
The press about it has gotten so bad that we may actually be getting to the point where you might not want "Uber investor" in your bio. Despite the fact that it's going to be a hugely successful company, current investors may be experiencing diminishing marginal returns for being associated with Uber.
For example, are we getting to the point where the Sarah Lacy incident gets so bad where female entrepreneurs, for example, stop pitching Uber's investors? Could we? If not, then what about when the next incident pops up--especially now that people are looking for the company to trip up. They're under a microscope now.
So what would I do if I were an investor whose name is now being dragged along in the mud with all of these things?
I'd bow out.
I'd negotiate a sale of my shares and then, without weighing in on the situation in detail, just say something really basic like, "We are no longer shareholders in Uber, but wish the company the best going forward."
Everyone would know exactly why I did it and I wouldn't need to say anything more.
What would be the fallout?
First, it would undoubtedly piss off Travis, Uber's founder--but what's the repercussion there? Statistically, he's not likely to start another billion dollar company later on--so if I don't get into his next thing, so what?
Plus, the seed round valuation of his next company will be so ridiculous that my expected return won't be that much anyway.
Second, if you believe that the best companies going forward are more likely to be built be teams who try to build strong, positive cultures, the move would catapult me to the top of the list of VCs with the right internal true north to seek out for those deals. Would another entrepreneur be more likely to want me involved in their company for drawing an ethical line or would they fault me for not sticking by Uber given the headlines? I'd be willing to bet on the former.
Third, at the current valuations, even if I had to take a 50% discount, my investors would still be thrilled at the outcome. Since I have a responsibility to be a good shepard for their capital, I can't imagine they'd be upset at me exiting at an $8 billion valuation and returning the fund several times over.
You might fault me for not saying that I'd sell just because "it's the right thing to do", but honestly I'm not sure it is actually the "right" thing to do. It doesn't actually do much to the company--and if all the people with strong moral compasses walk out, is that really the "right" and best outcome? Wouldn't it be more "right" to try to effect change? Wouldn't it be more "right" to speak out in public and be a thorn in the company's side? (Because, that's probably about all you could do. I don't see this as a company interested in getting "help" at this point. Seems like they see these incidents as just impossible to avoid collateral damage on the way to building something big.)
When you're a minority shareholder, I'm not entirely sure there is a "right" in this situation. It feels like a train that has left the station.
All I'm saying is that what some people are saying is "right" may actually be strategically attractive to a current investor at this point in time, which is interesting to me.