Have investors allowed tech founders like Uber’s Travis Kalanick to grow too powerful?

Silicon Valley knew well the aggressive corporate culture key to Uber’s global dominance — and all about that culture’s downsides.

Tech workers had seen it in lawsuits filed against the ride-hailing service, candidates turning down jobs at the San Francisco company and those fleeing the firm amid scandals. So the 47 structural and policy recommendations handed down by attorneys to the ride-hailing company Tuesday weren’t revelatory.

But for venture capitalists, the stark assessment underscores a growing concern: As company founders have amassed historic amounts of funding in the last five years, they have also attained greater control and autonomy. That has allowed entrepreneurs including Uber Chief Executive Travis Kalanick to pursue aggressive tactics and foster cultures that trouble workers and investors for longer than ever before in the tech industry, observers say.

“Are we as investors giving up too much of the store to entrepreneurs?” said Jonathan Tower, who recently founded investment firm Catapult VC. “Maybe during this boom period, we’ve become too founder-friendly.”

Had Uber been created in a different era of the tech industry, the company probably would have been publicly traded by now — or at least nearing the day of an initial public offering. Because of that, many of the changes that former U.S. Attorney General Eric Holder and Tammy Albarran put forward would have long been in place.

“You don’t want to snuff out that germ of innovation at an early stage,” Tower said.

Boundless cash from investment firms has given companies leeway to stay private. Venture capital fundraising alone has topped $55 billion in three straight years, according to research firm Preqin.

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Analysts say Uber is like other big tech companies — including Alphabet, Facebook and chat app maker Snap Inc. — in that Kalanick controls a majority of Uber votes either by himself or with fellow board members (co-founder Garrett Camp and early employee Ryan Graves).

Natasha Lamb, a managing partner at investment firm Arjuna Capital, said this type of share structure makes it easier for problems to fester.

“Uber’s record on sexual harassment, diversity and company culture has been a big hit to their brand,” Lamb said. “You run into these issues because of culture, and the voting structure entrenches that culture.”

Dave and Rufus Koren write for the Los Angeles Times.

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