2 Things the Show ‘Silicon Valley’ Gets Wrong



Spoiler alert: It is not possible to review and comment on Episode 4 of the HBO show “Silicon Valley,” which aired on Sunday, without revealing some critical plot twists. You are forewarned.

Episode 4 has two big plot moments. The first is a board meeting to approve the sales agreement that Pied Piper has struck with Maleant Data Systems.

As the board discusses the agreement, it becomes clear that CEO Jack Barker (Stephen Tobolowsky) has agreed to a five-year exclusive agreement with Maleant that includes the compression algorithms, which means that Richard Hendricks (Thomas Middleditch) and his team cannot build their platform.

Jack thinks he is going to get board approval as the two VCs on board , Laurie Bream (Suzanne Cryer) and Monica (Amanda Crew), will have a fiduciary duty to approve this contract. However, Monica surprises everyone by saying that she values the platform over the agreement and becomes the swing vote that turns down the agreement. Richard and Ehrlich Bachman (T.J. Miller) were the other “no” votes.

Having been a VC for 18 years, I have been through my share of contentious board meetings but it is pretty rare for a private company to have a split board decision this close. If there are such divided opinions on a topic, the board would usually defer a decision until additional consensus is arrived. It is also highly unusual when a VC has two board seats (as Raviga Capital has on the show) that the two board members would split their votes in different directions. That would be a career-limiting move by the junior person in real life.

The one surprising omission by the scriptwriters is not having the corporate lawyer in this scene. Almost all board meetings will have legal counsel and when it comes to nitty-gritty legal contracts, counsel will be asked to opine and clarify.

The second big scene in the episode is towards the end when Laurie Bream, the lead VC, decides that in light of everything that has happened she is going to “exit Jack Barker.” Richard and Ehrlich ask if either one of them might be CEO.

Laurie coolly says, “No. Until further notice, this chair shall remain empty” and exits the building.

While this is an interesting plot twist, and I am looking forward to all the comedic elements that come into play by having a chair as the CEO, this does not happen in real life. It is not practical or legally possible to have no one in charge. You need to have a structure of leadership and accountability in the company. No real life venture capitalist would fire a CEO without having some plan in place. Most of the time, an interim or caretaker CEO is named while a formal search ensues for the new leader.

Episode 4 has some interesting plot twists but I am afraid not ones tied to reality.

In this case, fiction is stranger than reality.

About the author: Venky Ganesan

Venky Ganesan, a managing director at Menlo Ventures and the chair-elect of the National Venture Capital Association (NVCA).

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