HQ Trivia has announced a new funding round, but that usually happy moment has triggered some unwanted backlash.
The funding, reported by Recode, values the company at north of $100 million. That would be unmitigated good news for the startup . . . if the deal didn’t involve Peter Thiel.
Thiel is a founder and partner at Founder’s Fund, which is leading the new funding round. He is also reviled in certain circles for his right-wing libertarian views, support of Donald Trump during the 2016 campaign, and his funding of a legal campaign that led to the bankruptcy and shutdown of the news site Gawker.
According to Recode, the investment is not being led by Thiel at all, but by another Founders partner, Cyan Banister. But however indirect it might be, Thiel’s involvement has triggered a wave of backlash, including a spreading #deletehq hashtag on Twitter.
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For some, Thiel’s involvement casts a further pall on a company that already has some skeletons in its closet. HQ’s cofounders have been accused of inappropriate behavior during their time at Vine and Twitter, including behavior towards women that was described by former coworkers as “creepy.” An investigation by HQ investors Lightspeed Venture Partners concluded that the behavior wasn’t bad enough to justify the founders’ removal.
According to Recode, though, their reputation has interfered with the company’s fundraising efforts, even as its live trivia product attracts huge audiences and, according to some observers, points towards the future of live entertainment. The recent destruction of investor value by the misbehavior of men like Steve Wynn and Travis Kalanick appears to have rapidly made investors much more attuned to such concerns.
Revelations about the hostile environment Kalanick helped foster at Uber were major contributor’s to that company’s disastrous 2017, which gave a significant market share boost to competitor Lyft. HQ Trivia has competitors, such as The Q Trivia, that users could switch to with similar ease.
Whether intentionally or by chance, the fact that Founders’ investment is being led by Banister, a woman, could dampen other investors’ concerns over its founders. The funding deal had not closed as of Thursday, according to Recode, so the fast-growing social backlash could actually have some influence on negotiations.