Accusations of bias at Uber could challenge IPO prospects, VC says

Accusations of gender bias and sexual harassment at Uber are "a huge deal" and may undermine the start-up's success at a crucial time, a venture capitalist told CNBC.

The ride-hailing company has launched an "urgent" investigation this week after former employee and engineer Susan Fowler published a blog post with multiple allegations, including that human resources and executives failed to act when she was propositioned for sex by a superior.

"That's really starting to affect how we perceive the company and its public persona," Kate Mitchell, co-founder and partner at Scale Venture Partners, told CNBC's "Squawk Alley" on Wednesday. "I think it's a challenge for them going forward toward an IPO. I think in many ways it's a gift to the rest of Silicon Valley to remind us that we all still need to focus on this issue and do the right thing."

The start-up, valued at $68 billion according to CB Insights, has long delayed an exit in the public market. But its long-term prospects for success might be hurt if in-fighting scares away top talent, Mitchell said.

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"Culture starts at the top," Mitchell said. "It's a talent war that we're in, and you need to have the best people focused on doing the right thing."

CEO Travis Kalanick has called the behavior Fowler described "abhorrent" and said "there can be absolutely no place for this kind of behavior at Uber."

"The doubters in the Valley are saying, 'Gosh, his reaction was really his concern about the success of the company going forward. Was it really concern about the issue?' You have to give him some benefit of the doubt there," Mitchell said.

Mitchell said the smart CEOs at technology companies are using Fowler's blog as a teachable moment.

"I'll tell you, it has been a wake up call," Mitchell said. "Susan's letter ricocheted throughout Silicon Valley.... This topic isn't going away."

CNBC

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