VC Palihapitiya on Uber: Change culture or suffer big time

Startups need to avoid 'collateral damage': Social Capital founder

Uber must improve its culture or it could face "collateral damage," venture capitalist Chamath Palihapitiya told CNBC on Thursday.

"I think if you look at any CEO of a great company, what he or she will tell you is if you don't have a great culture, things decay and the company will not last," the Social Capital founder and CEO said on "Squawk Box."

Last month, the ride-hailing company launched an "urgent" investigation after a former employee 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.

The allegations sparked questions about gender bias and sexual harassment at Uber, and investors called for the company to change its culture immediately.

Palihapitiya said any fast-growing company like Uber is going to be put in a "petri dish."

"The reality is when something is growing that fast and all of the sudden you're a $68 billion company ... you're forced to think about a business in a global context," he said. "As long as that culture gets fixed, I think this company will be fantastic."