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Email to Former Board Member


———- Forwarded message ———

From: Ryan Caldbeck {{12 – – – – – – – – -}}

Date: Sun, Sep 29, 2019 at 8: 38 PM

Self-discipline: Feedback

To: {{13 – – – – – – – – – – – – – – – – – – -}}


I mediate within the significance of suggestions for every of us in a relationship. We are able to never work collectively over again however I mute think suggestions is a reward so I’m providing this to you. On this case given your historic relationship with us I fear that you acquired’t receive it effectively. Alternatively I’m providing this up to procure a stare at and be positive for you, your colleagues at {{15 – – – – – -}} and *most importantlythe entrepreneurs you serve.

The tips means that venting doesn’t in actual fact assist mental effectively being- it hurts. I am no longer writing this to vent. I am writing this on legend of I am hopeful it goes to assist future entrepreneurs you invest in. In my conversations with quite a pair of founders you’ve interacted with, some clear patterns salvage emerged in how you treat entrepreneurs. From what I in actual fact salvage heard, whereas one of the most indispensable choices of my wretchedness are queer, the sentiment is anything else however queer.

Your involvement used to be extremely subtle for all of CircleUp and our board. My hope is that over time you are going to course of some of this files below and bear the needed changes when you in deciding to pause in enterprise.

Here is my suggestions:

  • Carry out No Damage. As a board member and investor myself, I’ve tried on the very least to never be a distraction or defective to at least one other company (“Carry out No Damage”). I acknowledge {{15 – – – – – -}} is your first journey in enterprise, or as a expert investor, however I am hoping you are trying to talk to quite a pair of enterprise investors and glean suggestions on how you divulge up in conferences. Extinct enterprise is an apprenticeship mannequin – it is rate making an are attempting to glean some mentors who can come up with candid suggestions. Roam nameless traditional polls of your entrepreneurs to glean sigh suggestions- and likely even see these corporations you met with however didn’t invest into. I’ve had enough interactions with quite a pair of founders to know what they would shriek –  their suggestions may per chance per chance per chance be per the sentiment in this e-mail – however I’m undecided you’ve heard or absorbed that suggestions. Many contributors of our group and our board (at the side of very skilled investors and operators), stumbled to your interactions on legend of the principle assembly to be extremely counterproductive. Loads of board contributors and teammates pulled me aside, especially within the early days sooner than our relationship soured, to impeach me to assist bear your participation less distracting. Take into legend what it takes for an worker to divulge to the CEO “how will we bear {{14}}’s participation less counterproductive?” I’m reminded of so many incidents that had been sufficiently big for varied board contributors and quite a pair of workers at CircleUp to commentary on. Simply attach – there had been extra distracting and off topic comments from you than there had been from all the quite a pair of board contributors mixed. I mediate within the skill of examples so right here are a pair of:  
  • At the same time as you happen to Facetimed right into a board assembly in a transferring Lyft then midway thru took us off video however left on audio whereas you had a corpulent dialog with anyone else. I felt humiliated for our group to thought a board member act that map.
  • When at a board assembly at USV you stopped the assembly and mentioned “guys we factual aren’t taking into account the factual considerations, this company has decrease than 6 months left.” One amongst the quite a pair of board contributors mentioned “{{14}} now we salvage got over 2 years left. What are you making an are attempting at?”  (You later realized you weren’t doing the arithmetic accurately.) Of us bear mistakes {{14}} however what we constantly stumbled on is that you weren’t in a predicament to effectively digest the board deck in staunch time – which ended in distracting and counterproductive comments. At the same time as you happen to in deciding to procure a stare at and procure board seats, I am hoping you procure the time to prepare in due course and get ways to extra effectively digest complicated files. I’m no longer naive enough to think all people has be taught every thing sooner than the assembly. But I stumbled on that you are going to’t efficiently hover it – or no longer it’s a must-want to construct within the work or it exhibits.
  • Reputedly vindictive actions– “CircleUp has never labored with a factual company” (your quote; 2016). I’m sure you do no longer forget that commentary as you mentioned it so repeatedly I finally wrote it on a whiteboard all over a gathering at USV, circled it repeatedly and asked “will we please end asserting this now?” You had been never clear what your map used to be with that commentary – however we felt so deflated and hurt every time you mentioned it. To quote a teammate at CircleUp “That took the wind out of our sales”. I will procure positive criticism {{14}} – however this used to be factual cruel for us and our group, whose mission is to assist entrepreneurs thrive. Each single board member- each one- used to be perplexed on what your intentions had been.
  • For the sage, in hindsight you had been vastly contaminated. We had labored with Halo Top, Beyond Meat and loads of different quite a pair of of the most a success corporations in shopper by that point. You had been making demands about one thing you didn’t imprint, you had been contaminated and it isn’t clear you understood the targets of your have unfavorable comments. That’s inappropriate. The style you delivered the message- with out empathy and with out a transparent cause used to be what used to be so painful for our entire group.
  • Constant insecurities– Everybody appears to be like to be skittish {{14}}. But your insecurities and chronic paranoia wreaked havoc on our boardroom. How repeatedly did you mention to me or Rory how you didn’t feel respected by the quite a pair of VCs on the board? No longer in a strategy that communicated vulnerability, however in ways in which demonstrated paranoia in counterproductive ways. Here had been memorable quotes: “XXX desires to poach anyone from {{15 – – – – – -}}, I factual imprint it.” or “YYY would no longer even know the title of our fund- he certainly doesn’t appreciate me.”  Or “ZZZ factual doesn’t divulge me any appreciate.” (all about quite a pair of board contributors). I deeply appreciate vulnerability– however that didn’t seem like your map with of us that heard these and identical comments. It perceived to others to be a deep-seated obsession with making sure quite a pair of of us demonstrated appreciate to you. We believed it used to be about private reputation for you, no longer what used to be finest for CircleUp. These are all staunch examples (redacted)- and these insecurities kept showing up repeatedly in predictable ways at the side of the humblebrags and making sure your voice used to be heard even whereas you didn’t salvage anything else substantive to add. I have in mind being asked in inner most: “Is he factual paranoid?”. I felt exhausted and perplexed on tips on how to retort whereas you are going to act admire this. A portfolio company shouldn’t want to fear about this style of erratic or paranoid conduct from an investor, let on my own a board member.
  • Counterproductive requests and suggestions– It’d be exhausting to checklist the total special requests you asked of our entire group however these stuck out.
  • Advertising and marketing your next fund to skill LPs for you.  In 2016 you asked repeatedly for our investor sales group to realize out to investors and asked for extra than one change calls, at the side of getting upset that we hadn’t made extra development advertising and marketing *your* fund (when the observe sage used to be ~2x MOIC). To my recollection there used to be no provide to pay us, you factual wanted to make exercise of our investor sales group to market your fund to your private profit. I’ve never heard of any VC ever asking one of their corporations to draw this. I’m undecided how the LPs in that existing fund would salvage answered had they identified that the CEO of {{15 – – – – – -}}’s finest investment (on the time) used to be spending time advertising and marketing your next fund. In an e-mail from Oct 22, 2016, I detailed out that one of our salespeople had (at that point) already reached out to 50 quite a pair of investors for you. I also mentioned that one other sales individual kept discovering inconsistencies within the deck and I was making an are attempting to glean you to repair them. It used to be a negative exercise of time for CircleUp and your LPs that had invested into CircleUp. Regardless, I remorse asserting yes to giving a pair of months of time. I remorse making an are attempting to persuade our sales group- most of whom had families to assist however wouldn’t be compensated on your fund, that they may per chance per chance per chance mute exhaust time on this for ‘goodwill’ with a board member. I must were stronger to divulge no to you. I am hoping you now imprint how unprofessional that demand used to be and adjust your conduct in due course with quite a pair of founders.
  • Writing and rewriting emails to your LPs for you. In the principle 365 days of our relationship you asked me repeatedly to write emails on your title summarizing our efficiency to your LPs. I would write one, then would glean suggestions to trade the e-mail- in most cases extra than one times. “Are you able to bear it shorter” or “Are you able to lengthen it”. I have in mind you asked me to salvage a call to change some of your LPs – and that you didn’t be a part of the call. {{14}} these aren’t usual or expert asks of a founder – they attach me in a extraordinarily unlit build. Its distracting and counterproductive for the connection. I do know as a minimum 1 quite a pair of board member at final urged you, “Your LPs are your accountability {{14}}.” (2017)
  • Talking with out pondering. Hampton Creek factual attach a corpulent page advert out within the [WSJ] attacking Unilever and likewise you are going to mute draw that attacking KKR.” (your quote) Suggestions admire this- with so puny thought into our product, drivers of our success and alternate mannequin had been beyond worrying. Factor in if we had completed on this idea? It can per chance per chance no longer simplest were a shatter of cash and time, it may per chance per chance per chance salvage hurt our relationships with LPs. It used to be clear you hadn’t thought about or understood the diversities between mayonnaise and the securities alternate, or the reality that our entrepreneurs in actual fact wouldn’t care in any appreciate if we went after KKR (the LPs surely wouldn’t admire it). Suggestions admire that led extra than one group contributors to ask when you had ever sat on a board sooner than, inserting me in positions to want to bear excuses for you.
  • Hostile conduct
  • Forcing a sale 2 weeks sooner than our deal – the worst time in my expert existence used to be our pivot (detailed right here). We had been pivoting a Series C company, conducting layoffs, whereas raising one other round and whereas raising a 1st time $125M enterprise fund. I was the lead on all of these items and they’re every insanely exhausting. What wasn’t detailed publicly, however which you knew and the board knew, used to be that my wife and I had been also going thru heartbreaking fertility considerations and my have meaningful effectively being complications that had been unrelated to stress, for which we had been pulling within the finest doctors within the nation. I don’t blame you for making an are attempting to promote {{14}}, I blame you for how you doubtlessly did it. I have in mind landing in Singapore to talk over with investors. Exhausted after months of no sleep and a lengthy flight, and likewise you demanded that we enlighten that day- a Saturday- within the few hours I needed to sleep sooner than a marathon of conferences with investors. I explained the wretchedness and begged you to factual enlighten over e-mail…. Nope, it needed to be on the phone and needed to be 1:1 with me. Your message used to be that you wanted to promote half your stake within the round that may per chance per chance per chance end in 2 weeks otherwise you wouldn’t approve the deal. You knew we had been working on that round for 6 months, all over the pivot and whereas also raising the enterprise fund. An most unlikely mixture. But you waited unless 2 weeks sooner than the projected end to inquire of to promote your stake. Which you would possibly per chance promote {{14}}- however it no doubt used to be how you doubtlessly did it that used to be so negative. In speaking with quite a pair of founders I’m now conscious that you are going to salvage pushed the founder to glean you out extra than one times. Bailing when an organization hit a tough build and promoting early will get a VC a tainted standing. Pushing the founder to resolve the subject for the VC by asserting “get me a buyer or I’ll extend the deal” is basically unfavorable. It’s hostage taking. We needed to gallop to resolve your subject for you and fix meaningful chance to the Company.
  • Reaching out to Temasek (2017)– “At the same time as you happen to acquired’t get me a buyer I’ll attain out to Temasek on my have.” (your quote all over our final elevate after we had been in final phases w/ Temasek) Each member of the board repeatedly asked you to factual wait unless the round used to be done so as that it didn’t hurt the reference to Temasek. {{14}} it isn’t the portfolio company’s accountability to get you a buyer whereas you admire to want to exit early – as a pair of board contributors mentioned to you. Over and over. Please ask quite a pair of VCs when you don’t agree- you can per chance per chance no longer get a high 50 VC that does this. I now know that you’ve done this to quite a pair of corporations as effectively within the past. So that you threatened to realize out to Temasek straight away whereas they had been closing diligence  – which made our existence extra subtle with them. All we wanted used to be so that you can draw your have work {{14}}, and no longer disrupt the investors we had lined up.
  • Selling to {{17 -}} (2019) – On this most up-to-date sale for the final 50% of your stake, you agreed to realize out to investors on your have simplest after extra than one conferences and requests asking us to draw it for you over again. We asked {{15 – – – – – -}} 5-10 times over the past 6 months to please factual contend with us urged so we knew which investors had been being approached- and thus may per chance per chance per chance prepare. The board wanted you out as grand as you wanted to be out. The quite a pair of VCs on the board and we are able to never imprint why you wouldn’t be exciting to factual give us a heads up on who you are going to consult with. Loads of contributors of the board asked you to factual coordinate so as that it didn’t glean noise within the market given we had been raising our next fund. The finest example used to be whereas you finally urged us in regards to the {{17 -}} shopping the shares for the principle time- on the Friday (9/20) sooner than the deal used to be predicament to end. Which you would possibly per chance per chance per chance no longer retort 3 emails and 3 texts factual inquiring for indispensable choices admire “are you able to portion what the timing is” and “are you able to portion who else you talked to so we are able to prepare”.  The silence didn’t assist your LPs {{14}}, it factual hurt us.  Even final week you wouldn’t retort the e-mail however as a change shriek “I’m simplest exciting to discuss this in individual and 1:1.” After that you demanded a response inner an hour. How repeatedly over the final 4 years would you take a seat on an e-mail for a day, a week or no longer retort, however then also inquire of a response “by discontinue of day” or “all over the hour”. It demonstrates arrogance and a lack of appreciate for the quite a pair of individual.
  • As an aside after we talked with {{17 -}} and {{20 – – -}} they mentioned that you urged them you had been coordinating closely with CircleUp. That used to be a lie and unethical {{14}}, we had no idea you had been speaking with them. `

At the same time as you salvage got made money on your investment, I’m sure we every remorse working collectively. Having a stare reduction, I have faith if we had met in individual sooner than {{21 – – – -}}‘s usual investment, or if anyone at {{15 – – – – – -}} had led the usual diligence (in want to outsourcing the diligence to a third celebration), all of us would salvage realized this wasn’t a match. I portion one of the most accountability for that and I remorse that we went thru the “diligence” course of in precisely a pair of weeks. I remorse that we simplest talked 2-thrice on the phone and *literallynever met in individual sooner than the deal closed. Our first assembly used to be after the deal had closed- on the principle board assembly. I mute can’t mediate that is trustworthy for the lead in our Series {{22}}. I remorse that no longer being a indispensable crimson flag to me “hey if this guy will write his finest test ever with out assembly me, what does that indicate?” I don’t know if your LPs are conscious this took build, or within the event that they are conscious {{15 – – – – – -}} outsourced the diligence, however regardless I remorse no longer asking why you had been outsourcing the diligence to anyone that didn’t work at {{15 – – – – – -}}. I have these mistakes. I am neat enough and skilled enough to thought these crimson flags however I took the money. I in actual fact salvage learned from that and I am hoping you are going to salvage too. I am hoping that going forward you, or the lead at {{15 – – – – – -}}, takes the time to meet the CEO in individual and to have the diligence yourselves. In our case may per chance per chance salvage saved us every a range of distress.

Of us glean into enterprise for varied causes. Some thought at it as a extraordinarily sexy job to bear a range of cash and salvage energy. Others (in my search the finest), search it as a chance to assist entrepreneurs to thrive and assist trade the world. I don’t know why you’re in actual fact making an are attempting enterprise {{14}}, however I draw know that extra than a pair of entrepreneurs were extremely hurt by your studying curve. I tried exhausting in this e-mail to point of curiosity on examples and my feelings, no longer on private assaults. I’m undecided I succeeded. I simplest hopeful that over time you’ll be in a predicament to adjust your conduct. I’m overjoyed you had been in a predicament to bear money on your investment in CircleUp and I want you no in unhappy health will. But no subject financial I am hoping you are going to talk with your group openly about changes or no longer it’s a must-want to bear to be a extra positive, and never more hurtful, partner.

{{14}}, I don’t know what you’ll draw with this suggestions. There could be a factual chance you’ll toss it and never portion it with others. But on the off chance that you admire to want to work this stuff thru, I have faith your colleagues and the entrepreneurs that you’re employed with stand to salvage the profit of some self-reflection on your portion. You realize I’m no longer making these examples up and there are many many extra, most with witnesses. Here’s serious stuff, and it affects of us’s lives. No longer factual the of us you search, however their families. I have faith and hope that you are going to be trustworthy of better than I got from you.

Seize care,


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