Saturday, 1 July 2017

Silicon Valley Business Journa/Cromwell Schubarth: 500 Startups co-founder's role cut after 'inappropriate interactions with women'

Silicon Valley Business Journal


By   Cromwell Schubarth - TechFlash Editor at the Silicon Valley Business Journal.

 July 1, 2017, 9:32am PDT

More male investors in Silicon Valley have been accused of sexual harassment in a shocking New York Times story Friday that included an accusation against one of the region's most colorful and vocal startup promoters.

Dave McClure, co-founder of 500 Startups, was accused by a female founder in the story of propositioning her when she applied for a job at his prominent Mountain View accelerator.

That prompted a blog by Christine Tsai — McClure's co-founder at 500 Startups — to announce that his role there was reduced in recent months due to "inappropriate interactions with women in the tech community."

McClure is no longer listed on 500 Startups' website as a founding partner. He is now a general partner, according to Tsai, "limited to fulfilling his obligations to our investors." She is listed as managing partner.

The new accusations against McClure and others comes in the wake of the collapse of San Francisco-based Binary Capital. Its co-founder, Justin Caldbeck, was accused in a story by The Information of groping and making unwanted advances towards six women founders while he was at that firm and while investing previously at Lightspeed Venture Partners.

The news also comes in the wake of the resignation of Uber CEO Travis Kalanick after an investigation into accusations of a pattern of sexual harassment at the world's most valuable venture-backed business.

New on Friday of McClure's demotion came as a surprise. There were no announcements of any changes at 500 Startups before the New York Times story appeared.

As recently as a May 18 Demo Day in San Francisco, Tsai and McClure were still identified as founding partners. He was front and center, as usual, at the start of the day to tout the accelerator's investment record.

It is also a surprise because McClure and 500 Startups have been vocal promoters of the need for more diversity in Silicon Valley venture and tech.

McClure flew two weeks ago to launch a new 500 Startups accelerator program in Melbourne, Australia, and named a woman to lead it.

According to Tsai, the changes at 500 came a few months ago after an internal investigation. She further said that McClure has been attending counseling "to work on changing his perspectives and preventing his previous unacceptable behavior."

McClure isn't the only prominent startup investor and public supporter of women founders to be accused of misbehavior in the New York Times story.

Chris Sacca, the former Google executive and former Shark Tank start investor who was an early backer of Twitter and Uber, was accused in the New York Times story of touching a woman investor's face in 2009 "without her consent in a way that made her uncomfortable."

The same woman who made that accusation, entrepreneur and investor Susan Wu, told the Times she was also propositioned by Caldbeck while fund-raising in 2010.

Sacca posted a pre-emptive blog on Thursday, the day before the Times story was posted, titled, "I Have More Work To Do," in which he wrote generally about regretting some of his interactions with women early in his career as an investor.

The Times initially reported that Sacca didn't dispute the woman's account in its story but later changed it to say that he is disputing it.

The billionaire investor has been a vocal supporter of the need for more women founders, saying at this year's South by Southwest conference in Austin, Texas, that tech companies that don't invest in, hire and promote more women "must hate money."

Sacca announced a month after that conference that he was retiring from startup investing.

He wrote then that he and his wife, Crystal, "are also deeply committed to paying forward the luck and opportunities we have enjoyed in our space. So we’ve been quietly backing the next generation of investors, but specifically women and people of color who have been starting venture funds. A lot more to come across all of these fields."

New accusations of misbehavior were also made by women in the New York Times story against investor Jose De Dios and Macromedia founder Marc Canter. Both denied the allegations.

The developments at Uber and Binary Capital, brought about by women going on the record with allegations of sexual harassment, has apparently encouraged others to go public with their stories.

That has prompted many in the venture community to take a "decency pledge" proposed by Reid Hoffman, the LinkedIn cofounder who invests for Greylock Partners.

But this is clearly a story that isn't going away any time soon.

    Cromwell Schubarth is TechFlash Editor at the Silicon Valley Business Journal.

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