Exclusive: Uber shareholder group wants Benchmark off board - Axios
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Exclusive: Uber shareholder group wants Benchmark off board

Sam Jayne / Axios

A group of Uber investors has asked that venture capital firm Benchmark step down from the company's board of directors, Axios has learned. It also wants Benchmark to divest enough shares so as to no longer have board appointment rights, claiming to have enough investor interest to handle more than a $6 billion sale. The move comes one day after Benchmark sued former Uber CEO Travis Kalanick for fraud, in an attempt to have him removed from the board.

Benchmark has not yet responded to a request for comment.

  • Details: The shareholder group communicated its request via a petition-style email sent earlier this morning to other Uber investors and its board of directors, which has a meeting scheduled for today. Its basic argument is that Benchmark's action only complicates the company's already-troubled search for a new CEO, and effectively violates Benchmark's fiduciary duty to the company.
  • Who signed the request? Shervin Pishevar (Sherpa Capital, although signed as an individual), Ron Burkle (Yucaipa Cos) and Adam Leber (Maverick).
  • Why it matters: It was shocking enough for a major venture capital firm to sue the CEO of a highly-valuable portfolio company. For other VC firms to then make this sort of counter-move against a peer is similarly unprecedented. It's a brave new world in Silicon Valley.

Below is full text of the email, which was obtained by Axios:

As a group of shareholders of Uber Technologies, Inc. (the "Company") we were surprised and distressed to learn through the media of the lawsuit brought by your firm against the Company, and its founder and former Chief Executive Officer Travis Kalanick.

Naturally, we share your concerns about the problems that the Company has
confronted in recent months, but we are greatly concerned about the tactics employed by
Benchmark to address them, which strike us as ethically dubious and, critically, value-destructive
rather than value enhancing.
Specifically, we do not feel it was either prudent or necessary from the standpoint
of shareholder value, to hold the company hostage to a public relations disaster by demanding
Mr. Kalanick's resignation, along with other concessions, on a few hours' notice and within
weeks of a personal tragedy, under threat of public scandal. Even less so your escalation of this
fratricidal course – notwithstanding Mr. Kalanick's resignation – through your recent lawsuit,
which we fear will cost the company public goodwill, interfere with fundraising and impede the
critical search for a new, world-class Chief Executive Officer. Benchmark has used false
allegations from lawsuits like Waymo as a matter of fact and this and many actions has crossed
the fiduciary line.
Benchmark's investment of $27M is worth $8.4 billion today and you are suing
the founder, the company and the employees who worked so hard to create such unprecedented
value. We ask you to please consider the lives of these employees and allow them to continue to
grow this company in peace and make it thrive. These actions do the opposite.
Accordingly, we would request that Benchmark help the Company realize its
full potential by allowing the necessary work to be done in the Board Room rather than the
Courtroom. To this end, at this point, in light of your suit against the Company, we believe it
would be best, and hereby request, that Benchmark remove its representative from the
Company's Board and move promptly to divest itself of enough shares in the Company so as to
cease to have Board appointment rights. We have investors ready to acquire these shares as soon
as we receive communication from Benchmark that they are willing to withdraw their lawsuit
and sell a minimum of 75% of their holdings.
We are also asking for a symbolic Board of Directors vote on this matter at
today's Board meeting to show how the Board of Directors stands on this lawsuit brought against
the company, its founder and the 15,000 employees of Uber who have all worked so hard in
concert to create the fastest growing company in history.
Many other shareholders share our views and will be adding their names in the days ahead. Any shareholders who want to join this letter and petition may email one of our signatories of this letter so that we can submit a final list of shareholders who support this request. Emails can be addressed to Shervin Pishevar at UberShareholderAlliance@gmail.com.

Sincerely,
Shervin Pishevar
Personal Investor, Advisor and Former Uber Board Observer (2011-2015) Coordinator, Uber Shareholder Alliance
Ron Burkle
Chairman
Yucaipa Companies
Adam Leber
Partner, Maverick
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