Later 2020, Chamath Palihapitiya – Dictator, as he is known on his all-in-podcasts – I bought it The Bombardier Global 7500 Private Jet for $75 million, just as he was attacking Spack on CNBC.
At the time, it looked like the guy who made his fortune through a Facebook offer, the guy who built his own lucrative venture capital company and co-hosted one of the world’s most popular business podcasts. Heights.
Money continues to flow infinitely.
And certainly, palihapitiya I said His company won about $750 million from Spac Frenzy by charging large promotion fees to take the company publicly available on SPAC Mergers.
However, there are indications that Parihapitiya’s fate has become dark since he served as the face of the Spac catastrophe.
I spoke with a former social capital employee and delved into Parihapitiya’s investments. I can’t say I’ve heard every episode of the All-in-Podcast, but I consumed more episodes than I wanted. I unearthed new information about the breakup of two professionals at Social Capital and took a photo of how the gloss of a former rising star venture capitalist faded.
For one, almost everyone left Social Capital, the venture capital firm of Palihapitiya. Sources say both the company’s chief financial officer and legal counsel have resigned.
Palihapitiya has been trying to raise new venture capital funds from external limited partners for the first time in years. This was generating fees rather than investing in your own capital, but abandoning last year’s efforts.
Palihapitiya has invested millions of dollars in Clover Health (down 90% since its release), Prokidney Corp (down 59%), and Akili (down 96%). Together, the losses appeared in the figures of the nine people.
Created by Palihapitiya’s Social Capital It is reportedly $220 million investment in Palmetto Clean Technology.
Forbes It seems he’s not calling him Millionaire This is the first time since Spac Frenzy in 2021. It seems unlikely that he will be alone. (Indeed, Palihapitiya is almost certainly very wealthy by normal standards. And his challenge is almost a matter of liquidity, given that much of his wealth is bound by personal investment. Maybe.)
Palihapitiya openly discussed his belt tightening on an all-in-podcast.
January 2023, he I spoke About looking at his household expenditure. “I’ve never really looked at household finances in two or three years. I didn’t care. Then when I saw it, I was like that. Wow, this really swells to a level I didn’t expect. It makes a lot of sense to bow more heads and live in a tough way. ”
June, he I said The podcast shows that he took the Southwest Airlines and “published.”
Last year, we learned that Palihapitiya quietly sold expensive private jets.
His masses letter Last year, investors called this an “age of austerity.”
Some critics of Palihapitiya believe this set of sets could partially explain his decision to drive all other investors and most employees out of social capital.
There is still money to earn from the first three venture capital funds of social capital, supported by external limited partners. The company’s carry is Zerosum. The less other partners take, the more they are left in Palihapitiya.
Mamoon Hamid In particular, investments in Slack and Intercom are a major driving force for the fund. Hamid also incubated Netskope. This is valued at $7.5 billion in the private market. Investing in a leading herd Jay ZaveriIt also lasted quite a bit after SpaceX got it. Social Capital sold its position in the secondary due to a big wind drop. Palihapitiya led crypto company DCG and successful investments in him Incubate AI company GROQ has proven to be another winner of the company.
These funds are basically running out of money to invest, but social capital still collects management fees, and the company generates carry as portfolio companies leave. (Sources say Palihapitiya asked his limited partner in October to raise the company’s management fees, but the request has not been approved.)
In Palihapitiya, there appears to be a pattern of lack of loyalty to Lieutenant Colonel. This is the guy I called “.Arena scam“The last time I wrote about him.
But things are worse than I knew.
I sent a detailed fact-checking email to Palihapitiya and his spokesman. Neither answered. I also texted Palihapitiya and he didn’t respond. I met Parihapitiya early in my reporting in Silicon Valley. I Profile He said in this newsletter from 2020 when Spac’s epidemic was rising.
In his latest investor letter released this week, Palihapitiya I wrote it“2023 was full of challenges, but we’re near the end of a hard reset from zero interest rates. After a decade of low rates and rising valuations, the tailbone that benefited us as engineers. Many are gone now. Instead, the disruptive changes caused by advances in AI and the reuse of key industries are reshaping the way companies are building.”
Social Capital co-founder in 2017 Hamid and Ted Maidenberg Falled along with Palihapitiya. Hamid left to help run Kleiner Perkins. And Maidenberg was pushed out by Parihapitiya. (Maidenburg went on to co-founded tribal capital.)
When Hamid, Maidenburg and others were leaving Social Capital, Parihapitiya retrospectively concluded the amounts they could receive from the investment during their time at the company.
The partners have gained vested interests, but Palihapitiya has limited how much benefits they can receive. One source is multiplied by a total of more than $50 million.
Hamid and Maidenberg fought Parihapitiya in private arbitration on behalf of themselves and others who left social capital.
I studied Hamid and Maidenburg Lost Last year, their battle with Parihapitiya.
Palihapitiya’s Social Capital Lawyer pride His law firm’s website says he “subjects filed by two founders of Silicon Valley venture capital firm Social + Capital, which alleges inappropriate dilution of their fateful interests. I experienced a complete victory for my former partner. After a week of arbitration trial and post-trial briefing, the JAMS Arbitration Committee found in all respects in favor of society + capital and allegedly claimed by the claimant. I have rejected the claim.”
The Arbitration Committee has found that Palihapitiya has a wide latitude under the company’s limited partner agreement to amend employee compensation, according to sources.
He said in August 2023 post – “I’m trying things in the arena. Some work, some aren’t. But I’m always learning” – came right after the arbitration victory against Hamid and Maidenburg. .
Recently, Palihapitiya fired social capital partner Zavei Ravitanuk.
Palihapitiya I’ve taken the problem Use special purpose vehicles that will allow social capital employees to invest in promising AI startup Groq. The issue seemed to be that employees were cutting funds from potential transactions, but sources told me that Palihapitiya was explained to me about the vehicle intended for Groq Special. Ta.
Palihapitiya inexplicably posted on X on March 12th. “We have ended employment of two employees due to employee specific circumstances. There are no further comments at this time.”
He hired law firm Wachtell to investigate the company’s issues, but it’s not clear what the law firm found or how thorough their investigation is.
Some former social capital employees believe that the employee GROQ SPV believes Palihapitiya is an excuse to deny his interest in his employees again. It appears that Palihapitiya is still negotiating with his former lieutenant.
In one all-in-podcast episode, Palihapitiya revealed how to handle issues with employees. “No company has a majority control where I have HR department,” he said. “You should go to a highly respected lawyer in a third-party company, and you should work with that law firm and keep it in place so that there is an escape valve if there is a serious problem that needs to escalate. there is.”
Even the general counsel of social capital was told Robert Goldstein He took part in the SPV and made employees believe it was kosher.
In my latest turn at Social Capital, I am both Goldstein and CFO. Conor Nowinsky I have resigned.
