Silicon Valley’s VC Casting Couches

Silicon Valley’s VC Casting Couches

"Everyone has heard of Hollywood’s infamous casting couches. Recently, it seems like they are springing up in the Silicon Valley."

The Floodgates Are Opening

Over the last couple of months, there has been a slew of revelations about alleged sexual harassment claims from Silicon Valley companies, like Uber, forcing the unexpected resignation of its CEO, Travis Kalanick. Interestingly, multiple sources have cited that top venture capital firms who were invested in Uber demanded Kalanick resign.

This is slightly ironic, because, in the same time frame, there were Silicon Valley VC firms getting blasted by female entrepreneurs for alleged sexual harassment and misconduct while seeking to fund their businesses. Just last week, over two dozen women in the tech industry working with Silicon Valley VCs have gone public with their allegations in a New York Times article (June 30, 2017), "Women in Tech Speak Frankly on Culture of Harassment."

One female entrepreneur spoke of being propositioned by a Silicon Valley venture capitalist while seeking a job with him. Another showed the increasingly suggestive messages she had received from a startup investor. One CEO described the multitude of sexist comments she received from an investor while raising money for her online community.

High-Level Fallout

Ten of these women identified specific investors and VC firms and were able to corroborate their collective stories with emails and text messages. Chris Sacca of Lowercase Capital and Dave McClure of 500 Startups are two of the alleged perpetrators. Chris Sacca published an apology letter and Dave McClure stepped down from his leadership role.


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These women came forward not long after The Information broke the story on Justin Caldbeck’s co-founder of Binary VC firm and multiple allegations (six in total) of sexual harassment from women seeking investments in their entrepreneurial startups.  Major investors behind Binary Capital were leaning towards not funding a $175M second investment. Justin Caldbeck has resigned from the company. Interestingly, he had been accused of sexual harassment in two other VC firms where he worked.

Unanswered Questions

What drives this behavior? Why does this predatory behavior continue to happen and flourish? What allegations will come to light next? While we may never be able to answer all of these questions, one would have to believe there is some level of cultural acceptance of the behavior.  On the bright side, this spinning flywheel of stories of being shared might be the catalyst necessary to drive some true change in the VC community.

For a couple of years now a group of 30 venture capitalists have been drafting a code of conduct for members of the industry that will set clear standards for unacceptable behavior, such as sexual harassment of founders, and will outline penalties for violators. Part of the code includes a retaliation-free reporting channel for women who experience sexual harassment. This group plans to present the proposed code of conduct to the National Venture Capital Association (www.nvca.org) by September 30, 2017. The code also recommends creating a list of “bad actors” and “good actors,” based on their treatment of women and minorities.

Separately, the Caldbeck revelations have prompted at least two VC firms, including Upfront Ventures, to extend their internal sexual harassment policies to include relationships between VCs and founders. Two other firms, IVP and Foundation Capital, say they’re considering doing so. Sexual harassment laws apply to the traditional employer-employee relationships but not to startup founders raising money from VCs. According to The Information, of roughly a dozen VCs contacted last week, just two said their company guidelines prohibit sexual harassment between VCs and founders as well as between employees.

It seems shocking that this can be the case, but it does help explain how some of these alleged transgressions could have occurred.

These revelations of alleged sexual harassment and the work to establish a code of conduct for VCs could be the impetus for true change in that industry, especially if the NVCA can support, market, and reinforce this code through its association.

 


 Do you have questions about your current anti-harassment or code of conduct training program? Contact us and we can work with you to make recommendations to augment and/or improve your current offering.

Syntrio is a leader in both the ethics and compliance field, as well as human resources and employment law, and is prepared to help your company implement a compliance program aimed at reducing the potential impact of compliance violations within the organization. Syntrio takes an innovative philosophy towards compliance program design and strives to engineer engaging, entertaining, and thought-provoking content. Contact www.syntrio.com for more information about our ethics and code of conduct online courses and remember to follow us on Facebook, TwitterGoogle Plus and LinkedIn for daily updates on employment law and compliance that impact your company!

 

Written by Darin Hartley, M.Ed., CPLP Fellow, Director of Marketing, Syntrio

Posted in Code of Conduct, Compliance Training, Ethics, Ethics, Managing Within the Law, Retaliation, Sexual Harassment and tagged , , , , , , , , , , , , , .