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Uber's unconventional approach to fundraising had a significant impact on its relationship with investors. Instead of going on a roadshow to meet investors, Uber created the HomeShow, which required investors to come to Uber's headquarters and compete to invest in the company. This approach, coupled with the company's poor terms that stripped investors of the right to see Uber's financials and offered them ordinary voting shares, created a sense of mistrust among investors. Despite this, many were still desperate to invest in Uber due to its rapid growth and potential for high returns. However, this approach also gave Uber's CEO, Travis Kalanick, significant power and control over the company.
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Investors were desperate to invest in Uber, and Kalanick took advantage. Unlike other companies which went on a roadshow to meet investors and raise money, Uber created the HomeShow, which forced investors to come to Uber's headquarters and compete to invest in the company. Due to his inherent mistrust of VCs, Kalanick presented poor terms, which stripped investors of the right to see Uber's financials and offered them ordinary voting shares instead of supervoting shares. When Google Ventures invested $250 million at a valuation of $3.5 billion, it got only limited information rights and an observer's seat on Uber's board. In 2016, Uber raised a massive $3.5 billion from the Saudi's Public Investment Fund, which valued the company at an unprecedented $62.5 billion. The deal gave Kalanick power to appoint three additional Board members and cemented his hold on Uber.
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Learn how Uber's growth was fuelled by obsessive product focus, broken rules, growth at all costs and minimal bureaucracy from the book that inspired...
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