Year in Review: Sexual harassment allegations shake venture industry

Allegations of sexual harassment rocked the venture community in 2017, prompting resignations by some of the industry’s most recognizable names and calls for consequences in response to sexist and boorish behavior in Silicon Valley.

The scandals come amid a broader shift in public awareness of harassment and sexist behavior in media, politics, business and technology. Powerful figures from film, TV and politics have resigned or been fired over accusations of misconduct by multiple women.

“This year is a watershed year,” said Katrina Saleen, an attorney with the Palo Alto, California, law firm Broderick Saleen, which specializes in sexual harassment and employment law. “It’s a turning point for the public.”

And although many individuals have come forward publicly with allegations of sexual harassment, Saleen said, many more are coming forward privately as well.

In venture capital, many firms have been unprepared to handle the accusations, with both LPs and firm partners unsure how to address the allegations and manage funds when partners leave firms unexpectedly, VCJ has reported.

  • It began in June. That’s when a half-dozen women alleged they had received unwanted advances from Binary Capital Co-Founder and Managing Partner Justin Caldbeck, prompting his departure and the shutdown of the firm.
  • Among the prominent names, in November DFJ Co-Founder and Managing Director Steve Jurvetson left the firm after an internal investigation into alleged inappropriate behavior.
  • In December, Sherpa Capital Co-Founder Shervin Peshivar took a leave of absence from his firm in response to allegations of sexual misconduct. He characterized the allegations as a “smear campaign.”
  • Other venture industry figures who were accused of harassment or untoward behavior included Tom Frangione, who resigned as COO of Greylock Partners after an inappropriate relationship with a firm employee was revealed.
  • Dave McClure, co-founder of 500 Startups, resigned after a New York Times article reported allegations of inappropriate comments.
  • Chris Sacca, who announced his retirement from Lowercase Capital, was accused of inappropriately touching a female entrepreneur.
  • Frank Artale was forced to resign as managing director from Ignition Partners after a misconduct complaint.
  • AngelList employee Lee Jacobs was put on a paid leave of absence during an investigation into allegations of sexual misconduct.
  • And OrbiMed Advisors Managing Partner Sam Isaly stepped down from the healthcare firm days after reports of sexual harassment allegations from former OrbiMed employees.

The various allegations prompted a response from California lawmakers. State Sen. Hannah-Beth Jackson, a Democrat representing Santa Barbara and Ventura Counties, introduced a bill adding investors to the list of relationships that are subject to sexual-harassment protections in the state’s civil rights act.

And many venture firms have committed to a pledge of decency or held internal discussions in response to the allegations, VCJ previously reported.

At her firm, Saleen said she has seen an uptick in calls from people alleging they are victims of sexual harassment. Since the firm is located in Palo Alto, Saleen said she sees many cases involving venture capitalists. She declined to estimate the number of cases that her firm handled this year compared with previous years, saying that information is confidential.

“I’ve seen an increase in sexual-harassment victims coming forward across industry lines, [such as] waitresses, assistants, salespeople,” she said. “It hasn’t just been tech companies or venture capitalists. I’ve seen it across industry and socioeconomic lines.”

“With high-level people coming forward,” she added, “that does encourage everyone on all spectrums to come forward when they’re facing sexual harassment in their own lives and workplace.”

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