A decade-old drama involving VC David Sacks and Rippling founder Parker Conrad over their previous company Zenefits has blown up this week into a finger-pointing fight on X with many among the Silicon Valley elite taking sides.
But, as entertaining as it may be for observers, some have weighed in to say that such fights are becoming damaging to all VCs.
The hullabaloo began after Sacks posted a political opinion about Republicans and Democrats in an X post on Wednesday using the words “fake coup.” Conrad threw a barb by replying: “Let me tell you, coups are this man’s specialty.”
Conrad was referring to the meltdown of Zenefits, the previous HR tech company that he founded. Sacks was an investor in Zenefits who joined as COO. Conrad was ousted from Zenefits after allegations arose around improper employee licensing and Sacks took over as CEO. (Sacks left Zenefits not long after that. In 2022, the company sold to TriNet.)
Conrad apparently never forgave Sacks for not issuing a friendly founder-leaving announcement. The press release at the time blamed Conrad for governance issues. Conrad went on to launch another HR tech company that he leads as CEO, Rippling, and has grown it to a $13.5 billion valuation.
Sacks replied to Conrad on X: “You were sanctioned by the SEC. Nobody else, only you. But you’ve spent the last decade trying to shift the blame onto others for your own poor ethics.”
It should be noted that Conrad and Zenefits settled an SEC investigation and paid fines without admitting fault. But no matter, almost immediately after Sacks posted his reply, swords were drawn all over Silicon Valley.
Y Combinator co-founder Paul Graham entered the conversation, writing: “Do you really want the full story of what you did to Parker to be told publicly? Because it’s the worst case of an investor maltreating a founder that I’ve ever heard, and I’ve heard practically all of them.” In another post he called Sacks, “evil.”
Sacks wrote a lengthy, scathing reply saying that the two had never met, pointing to the SEC investigation, and accusing Graham of some underhanded behavior toward Jewish VCs, although Sacks (who is Jewish) did not supply evidence to support such allegations.
Then Cloudflare cofounder Matthew Prince weighed in, siding with Conrad against Sacks, who he says he knew in college. “know this story. It’s very bad. Don’t know if David is most evil person in SV. Lots of competition.”
Other VCs pointed out that founders should know who they are allowing into their companies. “VC Twitter this week has been like a walking advertisement for self funding, lol. Lots of people out there you don’t ever want to be in the same room with, let alone on your cap table. Maybe the best differentiator is just being a decent human!” Climate VC Jason Jacobs, founder of MCJ Collective wrote.
Eric Bahn of HustleFund replied to Jacobs: “VC has a serious brand problem. All the bickering, finger pointing, name calling, ad hominem attacks within the industry are being noticed by founders. There are good VC humans on this side of the table, but this clowniness makes us all look bad.”
Certainly, it’s not the look that VCs usually try to present. Typically, Silicon Valley VCs bend over backwards to present themselves as “founder friendly.” They have to if they want to entice the best entrepreneurs to work with them. Venture investors buy ownership stakes complete with voting rights, sometimes board positions, and often do so under the premise that they won’t use that power to oust founders from their own companies.
Of course, boards that include VCs still can and do oust founders, which many founders fear. (That’s why Peter Thiel named his firm Founders Fund, because one of its tenets is never to vote against founders.)
Indeed, this public back-and-forth would have been shocking in an earlier day and age. But now some of Silicon Valley’s most successful founders and investors routinely take the gloves off.
The latest blowup follows one over the weekend between Democrat supporter VC Vinod Khosla and Trump supporter Elon Musk arguing over their political choices with words like “depravity” being tossed out. And it follows one in March between Khosla and VC Marc Andreessen over AI regulation that got into “patriotism” territory.
Maybe public spectacle is what they want. While duking it out with Sacks, Graham, husband to VC Jessica Livingston, managed to sneak in a plug for her podcast Social Radar.
And the Graham/Sacks fight culminated with Sacks’ friend Chamath Palihapitiya wading in, not to so much voice support, but to plug the famous podcast the two do with fellow VC Jason Calacanis, All-In.
Palihapitiya posted on X, “There is so much to say about this. We will document and talk about all of it this week on @theallinpod. PS – with receipts (even deleted ones!).”
Comment