EPINIONS DRAMA SETTLED
Old news, but good news. Especially if it's true that Benchmark Capital and August Capital misled and presented false information to the other Epinions founders and employees. Not cool. I definitely would be cautious about working with the VCs from Benchmark and August that worked on this deal. From alarm:clock:
Benchmark Capital and August Capital have settled with 50 former employees of Epinions, who claimed that they were misled into believing that the company was in worse financial shape than it was and for signing away rights based on that false information. The amount of the settlement is unknown but lawyers for the 50 expressed satisfaction. (full post)
Peter Rip, from Leapfrog Ventures, chimes in on this issue since his firm invested in Naval Ravikant's new thing. Pretty cool since he could have gone the way of other VCs and blacklisted Naval and the other co-founders involved in the lawsuit:
The Epinions/VC lawsuit has been settled. The terms are confidential and I have no idea what the outcome was. But I am glad that this is over for one very special reason. Naval Ravikant was one of the principal shareholder plaintiffs suing the VCs, and even as that was unfolding, we made a decision to back him in his next venture.
Making a decision to sue a former partner is always tough. Regardless of the situation, when mud starts getting thrown, everyone gets sullied. We met Naval just after the mud started. The stakes are always high when you make an investment decision. They are that much higher when your potential new partner is in a fight with his old partners.
We didn't look at the merits of the case. We weren't in a position to evaluate it, not did we want to. We looked at Naval, how he defined "fairness", "honesty", and "trust" to understand if we shared his values. We talked to others he had worked with to see if our assessment synced with others.
What we saw and heard consistently was that here was a guy of high integrity, unbelievable creativity and intellect, and boundless energy. Regardless of what caused the breakage at Epinions between investors and shareholders, suing VCs was "not his new business model," as one reference put it. (full post)