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'Cult of founders' is becoming a real problem in Silicon Valley: Roger McNamee

Key Points
  • What Elon Musk is doing is "nuts" and if I were him I'd be keeping a super low profile, says Roger McNamee.
  • McNamee says the "cult of founders" has become a problem in Silicon Valley.
What Musk is doing is 'nuts', says Elevation Partners' McNamee

Tesla CEO Elon Musk's controversial behavior is indicative of a larger issue facing Silicon Valley, tech investor Roger McNamee told CNBC on Friday.

"The cult of founders has become a problem," the co-founder of private equity firm Elevation Partners said on "Squawk Alley."

"There's no question that great founders make great start-ups, but once a company is in the public market, once it begins to mature, it has other responsibilities," he added. "You need to have in the team people who can fulfill those responsibilities."

Elon Musk's recent tweet mocking the Securities and Exchange Commission has caused some investors to question whether founders can succeed as the CEO of a company.

In the tweet, Musk called the agency the "Shortseller Enrichment Commission," just days after settling fraud charges brought against him by the SEC. The tweet, and a subsequent note by short seller David Einhorn, caused Tesla shares to drop on Friday.

Dangers to Elon Musk's SEC deal after mocking tweets

Another Silicon Valley darling, Facebook, has also been under scrutiny recently. The social media giant and its CEO, Mark Zuckerberg, have been dealing with fallout over several issues, including the Cambridge Analytica data scandal and its role in the spread of misinformation during the presidential campaign.

Then, last week Facebook announced a major security breach. And Thursday, the company admitted it "made mistakes" after a top executive was seen attending Judge Brett Kavanaugh's congressional hearing, reportedly prompting outrage from employees.

As an early investor in Google and Facebook, McNamee has seen firsthand the responsibility and importance of the company's board and how that organization should wield its power.

"You need to have checks somewhere in the system, but increasingly Silicon Valley companies have two classes of stocks so that the founders retain control and nobody has any leverage," he said.

And those in control are not used to having anyone criticize them, he added.

"They are not very good at hearing constructive criticism, embracing it and making the future better than the past," he said.

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