When Twitter’s first VC investors Fred Wilson of USV and Bijan Sabet of Spark Capital took themselves off Twitter’s board earlier this month, we talked to a bunch of sources on both sides.
Basically, they all told us that Fred and Bijan left the board because Twitter is a maturing company that needs the board seats for people who can help it turn into a ready-to-go-public company.
This struck us as odd, because for a startup VC like Fred and Bijan, having a seat on a powerful and rich tech company is a huge asset.
Just ask John Doerr, the VC who helped fund Google in its early days and still sits on that board.
Anyway, the official explanation also seemed weird to one of our readers, who wrote us an email explaining his theory. We’ve republished it below.
It is very important to remember that this email is just informed speculation. We’re passing it on because we thought it was interesting, and it gets at the ins and outs of this kind of transaction of people.
Twitter is an intensely public company, but is probably 2-3 years away from going public. For starters it’s business model is not stable and the valuation in the private markets is given for usage/potential not revenue.
I’ve never seen a VC leave a high profile public boards, certainly not ‘once in a lifetime’ companies. Fred is a rock star VC and doesn’t need it. But for Bijan and Spark staying on the Twitter board would have been a big plus. Their LPs will ask about this, after all staying on the board helps you influence the exit outcome which your LPs would care a lot about.
VCs have contractual rights to their board seats and nobody could have forced them to give up their seats.
The board is now predominantly a west coast board. Two years ago one of the current board members told me: “I’m doing all this organizational work here. Fred and Bijan are great but are far away”.
So what’s going on? I don’t know. I also find it strange that Bijan and Fred didn’t comment on their blogs about this.
My guess is that:
- There is a lot of internal organizational stuff going on at Twitter – to the point that the company’s business is harmed by multiple founders/leaders.
- The board decided to give Dick a real chance as CEO without powerful founders calling the shots, and wanted a more intimate west coast board. This probably implies things are messier at the leadership level than implied – which is why they got Dick to spell out his business vision a couple of weeks ago.
- My guess is that they wanted Fred to stay (I mean who wouldn’t?) but it would have been embarrassing for Bijan to step down alone. And Fred, always the gentleman, agreed to join. Which is why neither of them are commenting. The company is such a great investment story, why talk say anything bad about it.
Anyway, just a guess, but I think more plausible than Fred Wilson not having public company board cred…
We’re still calling people on this weird story. If you have good information, reach us at [email protected] or 646.376.6014.
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