Liz Gannes

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Fatdoor Founder Sues Benchmark Capital, Saying It Stole His Idea for Nextdoor

Fatdoor founder Raj Abhyanker on Thursday filed a complaint with against Benchmark Capital for interference, fraud and misappropriation of trade secrets after seeing the Benchmark-funded Nextdoor launch its local social network last month.

Raj Abhyanker

Abhyanker alleges that he pitched a neighborhood site to Benchmark in 2007 and said at the time he would call it Nextdoor if he could buy the domain. Benchmark conducted due diligence on the deal and indicated it wanted to invest.

But the prominent Silicon Valley firm then pulled out, according to Abhyanker, who filed with the Superior Court of California in San Jose.

At fault, according to Abhyanker, are Benchmark and Nextdoor, as well as Facebook CTO Bret Taylor, who was at Benchmark at the time and had agreed at least informally to advice Fatdoor.

After the Benchmark funding fell through, Abhyanker was fired as CEO and Fatdoor changed focus to eventually become a local deal aggregator called The Dealmap. Earlier this year, The Dealmap was bought by Google, along with its one granted patent and more than 40 patent applications that name Abhyanker as the lead inventor.

Abhyanker — who is now a practicing patent attorney — is faulting Benchmark for getting him kicked out of the company he co-founded, because the VC firm’s failure to invest made Fatdoor’s investors lose confidence in the start-up’s original concept, and because the Fatdoor board used a CEO headhunter to find his replacement that was recommended by Benchmark.

Nirav Tolia

This all came to a head because Nirav Tolia — who was a Benchmark enterpreneur-in-residence later in 2007 — in October launched a local social network called Nextdoor that is funded by Benchmark.

Reached for comment, Nextdoor CEO Nirav Tolia said Abhyanker’s charges are without merit.

“I have never met this person, and the idea and naming of Nextdoor was originated solely by the employees and founders of our company,” he said.

Indeed, Abhyanker’s complaint makes the assumption that Tolia has been working on Nextdoor since 2007. Abhyanker omits any mention of Fanbase, the Benchmark-funded sports directory Tolia started out of his stint as a Benchmark EIR that launched in 2009.

Nextdoor is a pivot of Fanbase, using the company’s remaining funding and the same team, Tolia had told AllThingsD when the neighborhood site launched last month.

Tolia on Thursday said he had received an email from Abhyanker last month after Nextdoor launched, asking to be named to Nextdoor’s founding team.

The email, which Tolia forwarded to AllThingsD, says:

“I am wondering if you would be open to me being in your founding team, in exchange for me filling a part time general counsel, business development vp, and/or board role, and perhaps a small angel investment in cash, resources, and space.”

In addition to Benchmark, Nextdoor and Tolia, Benchmark partners Kevin Harvey, Peter Fenton, Mitch Lasky and Bill Gurley are named in the complaint.

Also named are Bret Taylor and Jim Norris, the FriendFeed founders who helped launch Google Maps and were Benchmark EIRs at the time and had allegedly committed via email before the Benchmark deal fell through that they would be Fatdoor advisors.

Abhyanker claims that Taylor and Norris specifically appropriated his idea for neighborhood-level privacy controls, a feature of Nextdoor that Tolia himself attributed to “an early Google Maps employee” in a recent interview with the San Jose Mercury News. Update: Tolia said he was referring to Prakash Janakiraman, his co-founder at Fanbase and Nextdoor who formerly worked at Google on Maps. Tolia also noted he joined Benchmark four months after Abhyanker made his pitch.  

The evidence for that accusation seems a bit vague, but is particularly notable because Taylor is now Facebook’s CTO.

A spokeswoman for Benchmark said the firm does not comment on pending legal matters. Taylor said he was not aware of the lawsuit and he has no comment.

Asked to clarify why the complaint doesn’t mention Fanbase, Abhyanker said through a spokesman: “Upon reason and belief, Fanbase was just a holding company to bid themselves time until everyone forgot about our Fatdoor/Nextdoor.”

Stamped-COMPLAINT – Abhyanker v. Benchmark Capital Et. Al. – FILED-PUBLIC

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