Epinions saga continues
Wow, what a dog's breakfast this Epinions suit is. Private Equity Week, in its story on the latest developments in the case, says that "Naval Ravikant is learning the hard way that the venture industry doesn't take long to close ranks," and the story suggests that's certainly the case. He's even been booted from the VC firm, Dot Edu Ventures. (Thanks, Dan, for the link)
The suit, which we also blogged about here (see complaint), pits three founders of the once high-flying dot-com company against two of Silicon Valley's big-name venture capital firms, Benchmark and August Capital.
The Private Equity Week story is intriguing in its description of how intricate, and sometimes conflicting, the relationships can be between players in Silicon Valley. One twist the PEW story didn't point out is the following: Kevin Laws, a principal at PacRim Venture Partners in Palo Alto, is a plaintiff in the case, even though he has been a spirited defender of some the tough terms used by venture capitalists, called liquidation preferences, that often work against the interests of entrepreneurs. See our story here, but more importantly his own words here, and then the comments from upset readers. (Important: We're not saying Laws' stances are contradictory; You can argue in favor of liquidation preferences, but then you can sue for other reasons, as is apparently happening in this Epinions case). Note that he even cites Ravikant in his blog at the time. As for the piece we wrote here in 2003 about the claims made by entrepreneur and Nishan Systems founder, Aamer Latif, against the venture capitalists on his board because of aggressive moves that surrounded liquidation preferences (similar to Epinions), we've just found out that the suit, over a year old, has just been settled out of court. Stay tuned for details...