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Early Uber investors put the company on blast for its response to harassment scandal

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This is not normal

Photo by Amelia Holowaty Krales / The Verge

Mitch Kapor and Freada Kapor Klein, two married venture capitalists who were early investors in Uber, published a scathing indictment today of the ride-hailing company’s decision to tap a team of insiders to investigate claims of sexual harassment.

Earlier this week, Uber CEO Travis Kalanick announced that he had brought on former US Attorney General Eric Holder to oversee “an independent review” of the issues raised by ex-engineer Susan Fowler in her explosive blog post. Holder will work with Tammy Albarran, another lawyer at his firm, and Arianna Huffington, co-founder of The Huffington Post (and an Uber board member), as well as Angela Padilla, an in-house lawyer, and Uber’s HR chief Liane Hornsey. It’s a wide range of people, but critics have already pointed out that an investigation led by so many Uber employees, or in Holder’s case an advocate for Uber, is hardly independent.

Add to those critics Kapor and Kapor Klein, investors in Uber since 2010, who posted an essay on Medium today to express their deep disappointment in Kalanick’s decision. “We are disappointed to see that Uber has selected a team of insiders to investigate its destructive culture and make recommendations for change,” they write. “To us, this decision is yet another example of Uber’s continued unwillingness to be open, transparent, and direct.”

After ticking through the potential conflicts of Holder and his group, Kapor and Kapor Klein write, “This group is not set up to come up with an accurate analysis of the culture and a tough set of recommendations.”

For an investor to criticize a company so publicly is nothing short of mind-boggling. Silicon Valley operates on the principle of only saying nice things about each other in public. Startups have crumbled under the weight of their own stupidity, and all the while investors generally stay mum. Case in point: venture capital firm Draper Fisher Jurvetson never criticized Theranos, in which it was an investor, even as the health tech startup slowly collapsed.

In other words, a startup would have to seriously screw up for an investor to come out against it in such a prominent way. And the Kapors aren’t the only ones to speak out against Uber: Chris Sacca, another investor, tweeted recently that the allegations were “awful” and that while he has zero say in how the company is run, he found its response “frustrating.” And angel investor Jason Calacanis called the harassment allegations “obviously not acceptable.”

Kapor and Kapor Klein jointly run Kapor Capital, a VC firm with a portfolio that includes Bitly, AngelList, Asana, and Dropcam. They note that for years they’ve worked behind the scenes to improve Uber’s notorious corporate culture. Freada Kapor Klein even gave a talk on hidden bias in early 2015, and the couple has been in contact with senior executives about a variety of issues, including diversity and inclusion.

“We are speaking up now because we are disappointed and frustrated,” they write, “we feel we have hit a dead end in trying to influence the company quietly from the inside.”

They continue, “As investors, we certainly want to see Uber succeed, but success must be measured in more than just returns. Uber’s response to this particular crisis will be defining for the company, so the stakes are high to get it right.”

In a statement provided by Uber, Holder and Albarran insist their investigation won’t be influenced by anyone inside the company. “We intend to be thorough, impartial and objective, and we are conducting this review with the highest degree of integrity and professionalism,” they said.