VC head resigns over claims of sex harassment
Binary Capital co-founder Caldbeck just latest in Silicon Valley scandals
In the latest sexual harassment scandal to shake Silicon Valley, the co-founder of a venture capital firm resigned this week after six women accused him of making unwelcome advances ranging from late-night texts to groping.
Justin Caldbeck stepped down Sunday from San Francisco-based Binary Capital, the VC firm he helped launch and had managed since 2014, after posting a public apology.
Caldbeck’s resignation comes against a backdrop of increasing complaints about inappropriate workplace behavior in Silicon Valley’s testosterone-fueled tech culture. Uber CEO Travis Kalanick resigned last week, brought down in part by allegations of sexual harassment and sexism in the company that were
largely ignored by management. Venture capitalist Ellen Pao took her former employers at Kleiner Perkins Caufield Byers to court over gender bias accusations — leading to a salacious 2015 trial that revealed aspects of the firm’s “boys’ club” culture. Pao lost the case.
Caldbeck stepped down less than a week after six women — including Niniane Wang, co-founder of Google Desktop; Journy co-founders Susan Ho and Leiti Hsu; and three women who spoke anonymously — told online tech magazine The Information that Caldbeck had harassed them.
Wang said Caldbeck pressured her to let him stay the night in her apartment. She said he continued to pursue a relationship with her for weeks and offered her a senior leadership position at another company he was considering funding, but she rebuffed his advances. Another woman reported receiving explicit text messages from him and another said he grabbed her thigh under a table.
Caldbeck will have no future role at Binary, his co-founder Jonathan Teo, wrote in an email to the firm’s investors Sunday evening.
“The predatory behavior Justin has been accused of is deplorable,” Teo wrote, “and there will be zero tolerance at our firm of any conduct that is demeaning to women.”
Binary hired a team from law firm Gibson Dunn to investigate the allegations.
“It is important we understand how these circumstances could have been avoided and how we will prevent this kind of behavior from occurring in the future,” Teo wrote.
Binary’s portfolio
Binary is an early stage VC firm that manages more than $300 million, with investments in companies including Snap Inc.
A second Binary Capital partner, Matt Mazzeo, also has resigned.
“He was with Binary for a matter of weeks,” a source close to Mazzeo wrote in an email, “but the nature of the ongoing allegations surrounding the company and the facts that had come to light made it clear that he could no longer be associated with the firm.”
Caldbeck initially denied the sexual harassment allegations. At the time, his firm told The Information that while Caldbeck had occasionally “dated or flirted with women he met in a professional capacity,” there is no evidence he did anything illegal.
By the next day, Caldbeck had taken a leave of absence. “I’m incredibly sorry,” he tweeted, posting a link to an apology he provided Axios, a news website.
“It is outrageous and unethical for any person to leverage a position of power in exchange for sexual gain,” he wrote in the statement, “it is clear to me now that that is exactly what I’ve done.”
Delayed response
Teo also apologized for not forcing Caldbeck to resign immediately, saying his delayed response was the consequence of being “misled by a partner and a friend.”
Sexual harassment has haunted Silicon Valley for years. Sixty percent of women in tech reported receiving unwanted sexual advances in the workplace, according to one 2015 study spearheaded by Silicon Valley venture capitalist Trae Vassallo.
In the VC industry — where 89 percent of investing partners are men, according to a study by the National Venture Capital Association — sexual harassment can be especially troubling because of the power dynamics at play, said Kate Mitchell, cofounder of Scale Venture Partners and co-chair of the NVCA’s Diversity Task Force. There’s no recourse for a female entrepreneur who is harassed by the male VC she’s hoping will invest in her startup, Mitchell said.
“It’s just inexcusable,” Mitchell said.
And the allegations against Caldbeck are just “the terrifying tip of the iceberg” when it comes to harassment in Silicon Valley, Mitchell said.
What worries her most are the behaviors that haven’t yet come to light — such as the more subtle sexist comments, or the networking events where male VCs neglect to invite their female colleagues.
But the fact that three women felt comfortable going on the record with their claims is encouraging, Mitchell said.
“I’m hoping that we’re at a tipping point,” she said. “There’s more places for women to speak up and be well received.”