Sexual Harassment Is Backfiring in Silicon Valley, Finally
Two and a half years ago, before sexual harassment started backfiring against Silicon Valley venture capitalists, a woman named Trae Vassallo testified in a gender discrimination case that had been brought against the storied firm of Kleiner Perkins Caulfield and Byers.
The plaintiff in the trial, Ellen Pao, a former Kleiner partner, had had an affair with another Kleiner partner, Ajit Nazre; one of her claims was that he had retaliated against her after it ended. 1 Vasallo, who left Kleiner in 2011, had also found herself on the receiving end of Nazre's sexual advances during her time at the firm, according to her testimony.
In 2009, she told the court, she had agreed to have drinks with him, believing they were going to discuss work; instead he "started touching me with his leg under the table." Another time, during a business trip, he showed up at her hotel room door in a bathrobe. She had to close the door in his face.
When Vassallo complained to Ray Lane, the former Oracle president who was probably the best-known Kleiner partner aside from John Doerr, he told her she should feel "flattered." Eventually she wrote a letter to a number of key partners, including Doerr, which prompted an investigation.
By the time Pao filed her lawsuit, Nazre had left the firm, though it is unclear whether the investigation was the reason why. His alleged behavior did not become public knowledge, and in May 2012, he joined another venture capital firm, Wellington Partners. He's still there. 2
Compare the consequences to Nazre for his alleged bad behavior -- basically, not much -- to the more recent exposes of sexual harassment by venture capitalists. It began two weeks ago when Reed Albergotti at The Information published a story about Justin Caldbeck of Binary Capital, a firm he had co-founded with a buddy. Caldbeck had a reputation for hitting on female founders, and Albergotti spoke to three of them, on the record, each of whom described an incident of sexual harassment involving Caldbeck.
Caldbeck responded with an apologia, declaring, "I am deeply ashamed of my lack of self-awareness." Within days, Dan Primack of Axios, who had also been chasing the story, was reporting that Caldbeck had left the firm, that a new partner who had been expected to join Binary had changed his mind, and that several female founders had demanded that Binary "terminate their board relationship." Bloomberg reported that a former employee was suing the firm for sexual harassment. Also, other women emerged with stories about Caldbeck's penchant for sexual harassment at his previous venture firms. By the end of the week, Binary Capital had become so toxic the firm appeared to have no choice but to wind down.
Days after the Justin Caldbeck story broke, Katie Benner at the New York Times published a story about sexual harassment in "the tech start-up ecosystem." Her story also named names, including that of Dave McClure, the high-profile founder of 500 Startups, a tech incubator. One woman showed Benner an email she'd received from McClure after she had spoken to him about a job. "I was getting confused about whether to hire you or hit on you," it read in part.
Like Caldbeck, McClure responded with an apologia -- his was entitled "I'm a Creep, I'm Sorry" -- but it didn't help. Despite being one of the bigger names in the start-up world, McClure was soon gone from 500 Startups, even as a second woman came forward with a detailed account of being propositioned and forcibly kissed. A female executive at 500 Startups resigned in disgust.
As Benner noted in the Times, sexual harassment in Silicon Valley is "pervasive and ingrained," and the allegations against Caldbeck and McClure have a tip-of-the-iceberg feel.
The critical component here is that after years of accepting sexual harassment as a fact of life -- not to mention discrimination in pay and access to capital and board seats and so on -- "women in Silicon Valley have just had it," Patty McCord, the former head of human resources at Netflix told me.
When Susan Fowler, the former Uber engineer, wrote her famous blog post in February laying out the rampant sexism at the company -- sexual harassment very much included -- she unleashed something. Her detailed, impossible-to-refute post was the trigger that led to the resignation of Uber's founder and chief executive, Travis Kalanick -- and showed, maybe for the first time in Silicon Valley, that publicly exposing sexual harassment could bring results.
The women who spoke to Albergotti and Primack and Benner no longer seemed to fear retaliation, which had long held back female executives and founders in Silicon Valley. Men still had most of the power and money, but something had changed -- you could see it, for instance, in Caldbeck's apology, in which he actually thanked the women who had spoken to The Information "for providing me with a sobering look into my own character and behavior that I can no longer ignore."
McClure's apology also had its share of self-abnegation; he called his actions "offenses" and "my personal failures" and "wrong." Although there have been a handful men in Silicon Valley defending the admitted harassers, the overwhelming sentiment there is that they know this behavior is wrong.
In the wake of the recent revelations, the venture capitalists and philanthropists Mitch Kapor 3 and Freada Kapor Klein called on the tech community to "pioneer safe, effective, confidential complaint mechanisms to surface issues early." Reid Hoffman took to LinkedIn, the company he founded, to pen an angry post about this "entirely immoral and outrageous behavior." He called on the venture community to sign a "decency pledge."
All well and good, I suppose. But while there will always be sexual predators -- that's true in any industry -- I think the sheer pervasiveness of sexual harassment in Silicon Valley may soon be a thing of the past. In most other industries, sexual harassment can cost you your job. Now, finally, thanks to the women who have started to speak up, it's happening to venture capitalists.
It's not a complaint mechanism or decency pledge that will end sexual harassment in the Valley. When venture capitalists lose their jobs because they've done things they know are wrong, when their reputations are shredded, when their firms are suddenly in jeopardy of closing -- when they can no longer continue to flourish as easily as Ajit Nazre appears to have done a half-dozen years ago -- that's what will solve the problem.
All that's needed now is a few more shoes to drop.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
In late March, a jury resolved the case in favor of Kleiner Perkins.
Wellington Partners did not respond to several emails asking whether they had known about the harassment allegations against Nazre.
If you're as old as I am, you may remember Kapor as the founder of Lotus Development Corp., which made one of the first important software products, Lotus 1-2-3.
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Jonathan Landman at email@example.com