FALLOUT OF THE EPINIONS LAWSUIT
The clubby venture capital community has flexed its muscles on Naval Ravikant. The venture capital firm he worked at, Dot Edu Ventures, has let him go. Well, it's more likely Dot Edu Ventures was looking out for their back on future deal flow and partnerships. Some other interesting bits in this Private Equity Week article since it has a quote from the one founder that didn't join the lawsuit:
Ravikant and the others claim that the defendants - including venture capitalists and Epinions board members Bill Gurley of Benchmark, John Johnston of August and Thomas Gieselmann of BV Capital - convinced them that their ownership stakes were worthless at the same time that the Epinions' board was aggressively promoting Epinions' merger with DealTime.
The plaintiffs claim that they allowed their shares in Epinions to be valued at zero to ensure that the merger with DealTime could happen, but later, when Shopping.com went public, the VCs and Tolia made millions of dollars and the plaintiffs were cut out of the action, the suit alleges.
Dion Lim, one of the five founders of Epinions, chose not to join the suit. “Very simply, nothing in my personal experience with John [Johnston], Bill [Gurley] and Nirav [Tolia], nor evidence that I have seen, makes me believe that they conspired to defraud the plaintiffs,” he says.