I don’t often write immediate reactions to recent news. However, after reading an article published by The Information regarding sexual harassment allegations against venture capitalist Justin Caldbeck of Binary Capital, I feel that the subject is so important that I must write immediately.
In the article, journalist Reed Albergotti compiles first-hand accounts from six women, including three willing to be cited by name, who say that Caldbeck behaved inappropriately toward them in the course of business dealings.
One who was seeking funding says that during a dinner meeting Caldbeck "offered to take her to a nearby hotel room." Another said that Caldbeck "groped her under a table at a Manhattan hotel bar," then texted her at 3AM and asked her to call him back.
As Sarah Lacy has already noted at Pando, this is a story that "should have been greeted with far more outrage than it has been." She is absolutely right. This reported behavior is completely outrageous and unacceptable. Three other women also brave enough to come forward have three more similarly unacceptable stories. And, who knows how many other women are out there with other stories.
I know Reed Albergotti as a thorough reporter who carefully researches his stories. In this instance, he’s interviewed at least six women who gave him first-hand accounts of their experiences with Caldbeck, and three who were willing to go on record with their names, despite the potential blowback that often comes to those with the courage to speak out in such situations.
So, why do we have a lack of outrage and commentary? This is important, because the question for women entrepreneurs is whether people just don’t care. Here’s why writing quickly is important: YES, MANY OF US DO CARE. This is entirely immoral and outrageous behavior. And it falls to us to stand with you, to speak out, and to act.
So, again, why the lack of outrage and commentary? On the charitable interpretation, people are fearful of stepping into a he-said/she-said dispute where they have no information. Here, of course, it’s a he-said/they-said situation – which brings a very high standard of evidence to the table.
Other folks may think: well, that’s bad behavior but not my problem. If you think that, and work here in venture, think again. We all need to solve this problem. If you stay silent, if you don’t act, then you allow this problem to perpetuate. And you send the public signal, “we don’t care.”
This year, Silicon Valley technology companies have been receiving some very good criticism on fairness and decency on gender. The criticism ranges from employment and compensation to cultures that harbor sexual predators, necessitating outside intervention such as Eric Holder’s investigation at Uber.
This criticism is important. I welcome it. We should all welcome it, and of course, remedy it. One unfortunate side effect is that people think that many Silicon Valley technology companies have gender-hostile environments.
However, fortunately, most companies in Silicon Valley operate without such institutional dysfunction. Most companies in Silicon Valley build cultures of dignity and collaboration in gender – and they have competent HR functions in place that ensure healthy and respectful behavior within a company. When complaints arise, well-run companies take action in a prompt, clearly denoted, and consequential manner.
But many corporate sexual harassment policies are oriented to what happens between employees of the company. As entrepreneur Gina Bianchini mentioned to me recently, the issue that the venture capital industry faces is that it lacks a good HR function that covers what happens between venture capitalists and entrepreneurs.
Thus, on a structural level, venture capitalists unfortunately have no HR department to prevent predatory and inappropriate behavior, and so try to characterize (falsely) their actions as innocent flirtatiousness or banter.
If a professor propositions his adult university student, and defends his behavior by suggesting it’s just “two consenting adults,” what do we think? Outrageous and immoral behavior that ignores the power relationship.
If a manager propositions his employee and defends his behavior by suggesting it’s just “two consenting adults,” what do we think? Outrageous and immoral behavior that ignores the power relationship.
If an interviewing manager at a corporation propositions an applicant and defends his behavior by suggesting it’s just “two consenting adults,” what do we think? Outrageous and immoral behavior that ignores the power relationship.
So, if a venture capitalist propositions a woman entrepreneur who is seeking funding? SAME ANSWER!
How do we correct this?
I think the industry should actively work on building a kind of industry-wide HR function, so that venture capitalists who engage in such behavior face the same sort of consequences that they would if their overtures were directed at an employee.
In the meantime, anyone who wants to improve our industry’s working conditions and overall ethical climate should be clear with each other that the kinds of behaviors cited in The Information article are unacceptable.
This means a few different things:
1. VCs should understand that they have the same moral position to the entrepreneurs they interact with that a manager has to an employee, or a college professor to a student.
That is to say, as soon as you start discussing potential business deals of any kind with an entrepreneur, there is no such thing as an innocent or appropriate sexual proposition or remark. If you are interested in pursuing a business relationship of some kind, you forfeit the prospect of pursuing a romantic or sexual relationship. If you want to mutually pursue a romantic or sexual relationship, then forfeit the prospect of a business relationship.
2. If anyone sees a venture capitalist behaving differently from this standard, they should disclose this information to their colleagues as appropriate – just as one would if one saw a manager interacting inappropriately with an employee, or a college professor with a student.
3. Any VC who agrees that this is a serious issue that deserves zero tolerance – and I certainly hope most do think this way – should stop doing business with VCs who engage in this behavior. LPs should stop investing. Entrepreneurs of all genders should stop considering those VCs. This behavior occurs in our industry not just because some believe it’s no big deal, but also because those who do find it unacceptable don’t do enough to actively discourage it.
I applaud the actions of Niniane Wang, Susan Ho, and Leiti Hsu, who’ve shown great courage in publicizing the inappropriate behavior they experienced when dealing with Justin Caldbeck. I hope their bravery will encourage others to get off the sidelines and take more proactive measures in addressing – and correcting – instances of bad behavior that occur within our industry.
And, if you’d like to speak up simply, to highlight your support in this issue, then post in your favorite medium: #DecencyPledge.
Two additional notes:
First, various friends and I have discussed the challenges for women entrepreneurs over the years. I am unfortunately not surprised that there is a problem here; I am impressed with the bravery of the women stepping forward and so the time becomes now to speak and act.
Second, it’s not relevant, but given that I’m making a case for ethics, I should note that Greylock Discovery Fund is an investor in Niniane’s company.