A decade-old drama between VC David Sachs and Rippling founder Parker Conrad over their former company, Genefit, erupted this week into a blame game over X, with many in Silicon Valley’s elite taking sides.
But while it may be entertaining to observers, some argue that this fight is damaging to all VCs.
The uproar began after Sacks posted a political commentary on the Republican and Democratic parties on X Post on Wednesday, using the term “fake coup.” Conrad responded, “Let me tell you, coups are this guy’s specialty.”
Conrad was referring to the collapse of Zenefits, a former HR technology company he founded. Sacks had been an investor in Zenefits and joined as its COO. Conrad was ousted from Zenefits after allegations of improper employee licensing, and Sacks took over as CEO. (Sacks left Zenefits shortly thereafter; the company was sold to TriNet in 2022.)
Conrad apparently never forgave Sacks for not announcing his departure amicably. The press release at the time accused Conrad of governance issues. Conrad went on to start Rippling, another HR technology company he led as CEO, and grew it to a $13.5 billion valuation.
“You've been sanctioned by the SEC,” Sachs told Conrad at X. “No one else has. You've been. But you've spent the last 10 years trying to shift responsibility for your bad ethics to someone else.”
It should be noted that Conrad and Zenefits settled the SEC investigation, admitted no wrongdoing, and paid a fine. But that didn’t matter. Shortly after Sacks posted his response, knives were drawn across Silicon Valley.
Y Combinator co-founder Paul Graham joined the conversation, writing, “Do you want to go public with what you did to Parker? Because this is the worst example of an investor abusing a founder I’ve ever heard of. And I’ve heard of almost every one of them.” In another post, he called Sacks “evil.”
Sachs wrote a long and harsh response, saying the two men had never met, pointing out the SEC investigation and accusing Graham of shady behavior toward Jewish venture capitalists. But Sachs (who is Jewish) offered no evidence to back up his claims.
Then Cloudflare co-founder Matthew Prince stepped in, siding with Conrad against Sacks, whom he said he knew from college. “I know the story. It's bad. I don't know if David is the most evil person in SV. There's a lot of competition.”
Other VCs noted that founders need to be aware of who they are letting into their firms. “VC Twitter this week has been like a moving advertisement for self-funding, lol. There are a lot of people you don’t want in the same room as, or even on the cap table. Maybe the best differentiator is just being a decent human being!” wrote climate VC Jason Jacobs, founder of MCJ Collective.
HustleFund's Eric Ban told Jacobs, “VC has a serious brand problem. All the bickering, finger-pointing, name-calling, and personal attacks within the industry are being spotlighted by founders. There are some great VCs at the table, but this antics make us all look bad.”
Of course, this is not what VCs usually want to portray. Silicon Valley VCs typically go to great lengths to portray themselves as “founder-friendly.” That’s what they need to do to attract the best entrepreneurs to work with them. Venture capitalists buy ownership stakes that include voting rights, sometimes board seats, and often buy them on the premise that they won’t use those powers to force founders out of their companies.
Of course, boards with VCs can and do still oust founders, something many founders fear. (That’s why Peter Thiel named his company Founders Fund, because one of its principles is not to vote against founders.)
Indeed, this kind of public give-and-take would have been shocking in the past, but now some of Silicon Valley's most successful founders and investors routinely take their gloves off.
The latest outburst follows a weekend debate between Democratic VC Vinod Khosla and Trump supporter Elon Musk over political choices, with the two throwing around words like “corruption.” And a March debate between Khosla and VC Marc Andreessen over AI regulation veered into “patriotism” territory.
Perhaps the public spectacle was what they were looking for. VC Jessica Livingston's husband, Graham, snuck an ad for her podcast Social Radar while she was feuding with Sacks.
The Graham/Sacks fight reached a climax when Sacks' friend Chamath Palihapitiya intervened, not simply to lend his voice, but to promote the duo's popular podcast, All In, which they host with fellow VC Jason Calacanis.
Palihapitiya posted on X: “There's so much to talk about. I'll be recording and talking about it all on @theallinpod this week. PS – With receipts (even the deleted ones!).”
