Getting a piece of Uber


Since the dot-com boom, Menlo Ventures has teetered between good and great. A prolific Silicon Valley investor, it’s never quite reached the heights of Accel or Andreessen Horowitz (a16z), or established the level of name recognition as Benchmark or Sequoia, firms that struck gold with bets on Facebook, Instagram and Snap.

But where others missed the boat entirely on one of the most valuable tech startups of all time, Menlo Ventures gnawed its way into an early deal at the last possible moment.

In 2011, the firm led a $32 million Series B funding in a fledgling on-demand car service called Uber, agreeing to value the startup at a colossal $322 million after the company’s first-choice investor, a16z, failed to accept Uber’s sky-high terms. Menlo would go on to invest a total of $66.5 million in the company on expected total returns of up to $3.1 billion.

“I wouldn’t have dared to dream quite this big,” Menlo Ventures partner Shawn Carolan told TechCrunch. Carolan and embattled investor Shervin Pishevar, the former Menlo Ventures partner and founder of Sherpa Capital accused of sexual misconduct, secured Menlo a spot on Uber’s cap table years ago when several firms were vying for a stake.

The pair, according to discussions with insiders, are polar opposites, representatives of the diverging approaches to deal-making in Silicon Valley. While Pishevar, described to TechCrunch as “overpowering” and “self-promotional,” developed a lasting relationship with Uber co-founder and former chief executive officer Travis Kalanick crucial to the deal, Carolan, a reserved Midwesterner, crunched the numbers and worked to convince his firm that Uber, a young startup with a hot-headed leader, was worth their time and money.

[Read more]