RadiumOne’s All-Male Board Is Now Deciding Whether (Or Not) to Dump CEO Over Domestic Violence Conviction
According to numerous sources, the board of RadiumOne is deciding whether or not to remove CEO Gurbaksh Chahal from his job, after he was convicted of two misdemeanors for domestic violence and battery in a San Francisco court.
The San Francisco-based advertising tech company has five official directors on its board: Three venture investors, as well as Chahal and COO Bill Lonergan, and one venture board observer.
It’s not yet clear whether the all-male board can remove Chahal — since there has been no felony conviction — or if Chahal will voluntarily step down. But sources said that there is likely to be some decision sooner than later.
Sooner is probably better, given the level of attention the situation is commanding and the appalling nature of the crime of which Chahal has been convicted. Certainly, the violence at issue in this case is adding another impossible-to-ignore layer of controversy to an already heated conversation about the role of women in Silicon Valley, particularly how few of them are found at the top echelons of tech companies.
Now, whatever the circumstances, everyone is innocent until proven guilty.
But guilty is exactly what Chahal pleaded to in a San Francisco court last week, where he was convicted of two misdemeanor counts of domestic violence and battery. For that, he was sentenced to three years of probation and some community service. He was given no jail time, just told to complete a year-long domestic-violence course.
This was not the felony conviction the city’s prosecutors had hoped for, given what they felt was an ace in the hole — a videotape allegedly showing Chahal beating his girlfriend 117 times over 30 minutes. For that, they had charged him with 45 felonies and those two misdemeanors.
You can read the whole criminal complaint against Chahal below. It includes, among other many horrors, charges that he hit Juliet Kakish in the head and body repeatedly, covered her mouth and obstructed her breathing, and threatened to kill her.
After initially calling 911 and talking to police, Kakish ended her cooperation with authorities for reasons that are unclear; she is not talking. The judge presiding over the case threw out the video citing its seizure as a Fourth Amendment violation. Thus, without that proof, the district attorney had to make a deal.
Like it or not, this kind of thing happens all the time. We can grouse all we want, but the law is the law, even the technicalities.
Since then, as you can see below, Chahal has taken to Twitter to protest the attacks he has been getting from those who think he got off easy. His critics blame high-priced lawyers and PR machinations for that, while Chahal has claimed the allegations are “overblown” and “exaggerated.”
He has since taken down these tweets, but it is obvious he is adamant about defending himself.
Chahal has pushed a swaggering, winner-takes-all image in the media over the years. And he has every right to do that, however untoward it might seem at this moment.
So his recent public efforts to to defend himself and their Nixonian I-am-not-a-crook tone aren’t all that surprising. Chahal is someone who has always been highly communicative on Twitter, a splashy website (on which he calls himself a “die hard entrepreneur” and with the motto @DreamBigHustleHarder), books (“The Dream: How I Learned the Risks and Rewards of Entrepreneurship and Made Millions”) and a lot of inspirational quoting (most recent is apt: “Success is how high you bounce when you hit bottom”) and more. (In fact, he wrote op-eds for Re/code here and here.)
In contrast, the board of RadiumOne has been silent as the proverbial grave, making no statement and taking no immediate action after Chahal’s guilty plea. Many have taken the board’s silence to mean its members will not do anything or are dithering in the face of an obvious crisis.
We’ll see, but sources close to the situation said that RadiumOne’s directors have been discussing the issue and will come to some decision or make a public statement within days. As I said, what that statement will be remains unclear.
Let me be clear, while I value the power of being indignant — Twitter has been aflame with calls for Chahal’s head — a pitchfork brigade is not as effective as asking and answering the question at heart of the matter: Should a board remove a CEO who is convicted of domestic violence and battery?
The answer seems obvious: Yes. But the mechanism for doing so is less so, as I have found out this week trying to determine exactly what the men in charge of Chahal — and they are all men — are doing. The hope, said another source, is that Chahal will decide to step down himself.
“Obviously, this is not being ignored,” said one person close to the board. “But there are a lot of legal complexities involved.”
I am sure there are — and money too. Chahal was the initial angel investor for RadiumOne in late 2009 and is a major shareholder. He then raised close to $34 million from four VC firms: Crosslink Capital, Adams Street Partners, Trinity Ventures and DFJ Esprit. The investment was not a surprise — Chahal scored a big win when he sold his last ad startup, BlueLithium, to Yahoo in 2007 for $300 million.
And more dough: Given the current ad tech landscape, there have been plans for a $100 million IPO of RadiumOne next year.
As is typical in these investments, the first three firms each have a director on the board, while DFJ Esprit’s Krishna Visvanathan has a board observer role. That firm owns less than five percent of RadiumOne and sources said he has been told that he should have no involvement in discussions within the company over this issue for legal reasons.
So, until the others come to a conclusion, it might be good to know who they are:
Former eBay exec Steve Westly is probably the most publicly prominent member of the board, having been controller and chief fiscal officer of California. Still active politically, he founded the Westly Group, which has investments in a range of companies, such as Yerdle, CoolIris and many energy-related startups. Its motto: “We Invest in Companies That Change the World.” I have covered Westly for almost two decades and have always found him to be a straight shooter.
So, too, have been my experiences with Ajay Chopra of Trinity Ventures, who founded Pinnacle Systems, a media technology company. He is also on the boards of several other investments, such as CrowdFlower and TubeMogul. On Trinity’s site, he notes: “At the end of the day, your product or service must solve a problem for your customers and delight your end users.”
I do not know David Silverman of Crosslink Capital, who was a previous investor in BlueLithium, as well as Demand Media and Fotolog. He is currently on the boards of Bizo and Vungle, among others, and previously worked in the technology practices at both Robertson Stephens and Piper Jaffray and was a partner at 3i Ventures.
Robin Murray of Adams Street Capital appears to be close to Silverman, having also been a partner at 3i. A former CFO, he also worked at McKinsey & Ernst and Young. He is on the board of Actelis Networks and has previously invested in Demand Media and Fotolog. Murray invests in late-stage venture and growth equity companies, according to his bio.
Lastly is Bill Lonergan, RadiumOne COO. Before joining, he was the CFO of Tapjoy. More importantly, he was the former CFO of BlueLithium, so his ties with Chahal run deep. I met him a long time ago at LookSmart, but before that he was a longtime exec at KPMG. Obviously, Lonergan is the one that the board is most likely to name as CEO if Chahal loses his job or steps down voluntarily.
Until this group makes a move, here’s the complaint against Chahal:
I lobbed in an email for comment to RadiumOne PR, but expect no response.