Bill Gurley is one of the smartest venture capitalists in Silicon Valley, which is a big reason that the general partner of Benchmark Capital held a coveted seat on the board of directors at Uber until recently.
However, Gurley and then-CEO Travis Kalanick had a falling out, and two of Gurley’s colleagues, not Gurley himself, asked Kalanick to step down. Now Benchmark has sued Kalanick, claiming that he failed to tell the board about a “pervasive culture of gender discrimination and sexual harassment,” according to the lawsuit. If Gurley is so smart, and so plugged in to Silicon Valley, why did he not detect such a serious problem himself?
We may never know the answer, but this much is true: Gurley is a busy man. In addition to running Benchmark, which raised $425 million for its newest fund, Gurley sits on the boards of seven other companies. Overseeing Uber, valued at $69 billion, could have been a full-time job in itself. Add to that the constant work of finding startups to invest in. One question the lawsuit raises: Did Gurley pay sufficient attention to the company, given all of his other commitments?
Gurley, who resigned from the Uber board in June and was replaced by his colleague Matt Cohler, did not respond to a request for comment.
Gurley’s situation reflects a growing problem in Silicon Valley, called “overboarding,” in which venture capitalists neglect investments because they sit on too many boards. Venture capitalists might not have the time to help these companies properly develop into profitable businesses that will either be sold or go public. The growth of highly valued unicorns —firms worth at least $1 billion on paper — makes things worse, since venture capitalists customarily step down from boards after a company goes public; if companies stay private, they’re stuck in the boardroom.
Jeffrey Jordan, a general partner at Andreessen Horowitz, is a director at eight companies, including Airbnb, Pinterest and Instacart. Investors value those three firms at a collective $45 billion. Alfred Lin, a partner at Sequoia Capital, serves on six boards — including on Airbnb’s with Jordan. At least Jordan and Lin can commiserate about their busy schedules.
No one beats John Doerr though. The chairman of Kleiner Perkins Caufield & Byers serves on the boards of an astonishing 15 private companies. He’s also a board observer for Slack — meaning he attends meetings, though he can’t vote — and a director at publicly traded Alphabet, the holding company for Google.
A spokeswoman for Kleiner Perkins said Doerr no longer involves himself in the day-to-day operations of the venture firm and thus can focus his full attention on all of his companies.
“A venture capitalist’s job is not only to identify promising investments but to help the founders they’ve invested in build companies into thriving organizations,” the spokeswoman said in an email. “Serving on the board of directors is the most direct way to help steer a company to success and oversee the investment.”
But 15 companies? Even investors as talented as Gurley and Doerr have only so much time in the day.
“Do the math,” said Adam Epstein, founder of Third Creek Advisors, a Bay Area firm that advises pre-IPO companies on corporate governance. “It’s not mathematically possible.”
In recent years, publicly traded companies and corporate governance observers have been looking closely at overboarding. The average number of hours that directors spend on board matters soared 46 percent to 278 hours a year in 2014 from 190 hours in 2005, according to data from the National Association of Corporate Directors.
A recent study by Equilar, a research firm in Redwood City, found that companies whose chief financial officers served on two or more outside boards saw lower revenue, profit and shareholder returns.
“The time commitment required to serve on boards of directors at public companies continues to increase, and the degree with which board members must be prepared to manage…