Founder wrote brutal email to investor when links broke


  • A redacted email written by CircleUp founder Ryan Caldbeck to an investor board member is the speech from Silicon Valley.
  • In the email, Caldbeck recounts the toxic relationship with the board member that led CircleUp to buy out the investor and the close ties.
  • Caldbeck did not name the VC, so the valley began to search for his identity.
  • But there was also a more important point in the discussions. Founders need to check the credentials of their future board members more and it’s still not easy to do.
  • Visit the Business Insider homepage for more stories.

When Ryan Caldbeck resigned this month as CEO of CircleUp, the fintech and venture capital firm he co-founded nearly nine years ago, he did something unusual.

He wrote an article on Medium about the harshness of the founder’s job, and he looked into an area considered taboo: problems with a board member.

The most unusual part is that he published the email he sent to this board member after he bought the shares of this investor and severed the relationship, redacted to hide the identity of the board member.

“We’ll never work together again, but I still think comments are a gift, so I’ll give them to you,” Caldbeck explained in the email. “I’m afraid you won’t receive it well. ”

Caldbeck then presented a litany of specific complaints against the investor / board member. They included flawed comments at board meetings, like when the board member said the company had six months of financial trail when it had two; or when he turned off his video during a board meeting, but not the audio, then spent the board meeting talking with someone else, not knowing he was still on speakerphone.

He told stories of the board member making negative comments to company employees and reckless requests while scheduling meetings with the founder.

But one of the strangest parts is when Caldbeck says the board member asked Caldbeck and his team to spend time raising money for the board member’s next venture capital fund, until writing emails.

This was happening even as CircleUp expanded its fintech company into the venture capital world and the middle of raising money for its own fund.

Two sides to every story

This is a story, albeit one-sided, of an investor-founder relationship that ended over a year ago. But Caldbeck, having entered the corporate world himself and now wearing two hats, one as a founder, the other as an investor, felt compelled to share it, did he stated in the post. And Caldbeck has always shared with his founders some of his most difficult times of his life as CEO. In 2019, for example, he detailed the mental and physical health checkup when his business failed.

The redacted email to the board member elicited a lot of reaction from VCs and Founders.

Of course, Startup Twitter and those at Hacker News wanted to know who the redacted email was talking about.

It didn’t take much research to figure out that there was one prominent former board member who left CircleUp on time – Craig Shapiro, founder of Collaborative Fund. Collective is known to support a long line of successful businesses like Beyond Meat, Impossible Foods, Lyft, Kickstarter, Reddit.

While Business Insider was unable to confirm that Shapiro was the board member referred to in the email, Shapiro admitted that he was aware of these alleged incidents.

When someone asked him if it was him, he tweeted, “Thanks for asking the question. Ryan posting his own redacted email without context is disappointing and misleading. There are always two sides to every story. ”

He also has tweeted, “I wish Ryan the best of luck in the area he chooses for himself next. I am proud of the work we do at Collaborative and I am fortunate to be surrounded by a great group of people who support each other. difficult thing. ”

Shapiro did not immediately respond to our request for comment and Caldbeck declined to comment.

Talk about the city

VCs and Founders across Silicon Valley were talking about email and what everyone should get out of it. The result, they agree, is that founders should always investigate who they take investment money from, especially when it comes to a board seat. But, some say, it’s easier said than done.

For example, VC Sarah Guo at Greylock Partners tweeted the email with the remark, “Here’s a strong argument for not marrying a board member with a 2 day process.” She refers to the VC term offers that give founders short yes or no deadlines.

Lightspeed’s VC Jeremy Liew rang the bell on Twitter Warning. “Founders, refer to your investors,” which means founders should talk to other portfolio founders during a reference check, the same way investors should check startups. Founders should especially look for startups that haven’t been very successful to find out how an investor behaves in times of difficulty.

But Katrina Lake, the founder and CEO of StitchFix, well known for speaking out on the evils of Silicon Valley, points out that founders are at a disadvantage, even with reference checks, because there is a power imbalance between founders and VCs. with the VCs hold more power.

“Lol- hard to make references when you’ve been silenced with an NDA,” she tweeted.

She was speaking out about a 2017 Axios article that recounted how she was asked to sign a non-bashing agreement when she tried to report to Lightspeed, one of her company’s early investors. , an incident of alleged sexual harassment with another investor. Axios has posted a copy of this non-bashing agreement.

Are you a founder with a VC story to share? Contact Julie Bort by e-mail at [email protected] or on the Signal encrypted chat app at (970) 430-6112 (no PR inquiries, please). Open DMs on Twitter @ Julie188.


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