Binary Won't Be the Last Venture Discrimination StoryBy
Hi all, it's Eric.
The Binary Capital revelations over the past week have been disturbing.
The founder of the up-and-coming e-commerce company Stitch Fix, Katrina Lake, was allegedly harassed by the now disgraced venture capitalist Justin Caldbeck. And then Lightspeed Venture Partners, where Caldbeck worked at the time, had Lake sign a non-disparagement agreement. Lightspeed allowed Caldbeck to keep the allegations a secret. The firm wrote on Twitter, "In light of what we have learned since, we regret we did not take stronger action. It is clear now that we should have done more."
Bloomberg reported Wednesday evening that Former Binary Capital principal Ann Lai is suing Binary Capital for harassing and defaming her after she resigned. After Lai quit the firm, Caldbeck wrote that he wasn't going to "warn" her again. "Please stop and don’t add ill will. It didn’t work out. I have egg on my face for supporting you and I’m sure you are disappointed w your experience but don't put us in a situation where we need to be more aggressive," he wrote on the messaging app Confide, according to Lai's complaint.
You can be certain that offices up and down Sand Hill Road are discussing how accusations against Caldbeck were handled over the years. Partners have said to me that they're highly disturbed, if not altogether surprised. For one, non-disparagement agreements are the norm in the industry: it's no surprise that Lightspeed tried to put the allegations behind it. Given the blowback Lightspeed is getting to how it handled the situation, venture firms might think twice in the future about staying quiet about bad actors.
There's so much that's unsettling about the Caldbeck situation. For one, how long these rumors seemed to have been swirling before The Information published its story June 22. The racial element of this story: Caldbeck seems to have targeted Asian women. Lai isn’t the first to sue her former venture employer: Ellen Pao's gender-discrimination lawsuit against Kleiner Perkins Caufield Byers in 2014 was one of the first to draw closer scrutiny on misogyny in the valley.
The evolving statements out of Binary Capital have been incongruous. The Information initially received a denial from the firm, adding "there is no evidence that Justin did anything illegal and there is no evidence that any of his investing decisions were affected by his social interests."
Within hours of publishing the story, Caldbeck reversed himself with an apologetic statement: "I deeply regret ever causing anyone to feel uncomfortable." Apparently days before the story went live, Caldbeck reached out to one of the women quoted in the initial story to see if her company was looking to raise money.
So many women have spoken up to push for change in Silicon Valley, including Pao and Susan Fowler. Now Niniane Wang, Susan Ho, and Leiti Hsu join their ranks. There is still so much more that needs to change about how women are treated and included in Silicon Valley. Both fortunately and unfortunately, I think we're going to hear about many more stories like Caldbeck's for a while. But change is happening, albeit too slowly.
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