The pattern is familiar: A powerful man in the technology industry is accused of using his position to harass women trying to establish themselves in Silicon Valley. And it’s up to the women who are the victims of this behavior to risk their careers exposing the wrongdoing.
The latest controversy centers on Binary Capital, a small San Francisco venture firm whose co-founder, Justin Caldbeck, resigned Sunday following a published report detailing accusations of sexual harassment from multiple female tech entrepreneurs.
The scandal comes four months after a female engineer at Uber, Susan Fowler, came forward and wrote about a sexist environment at the ride-hailing giant that set in motion investigations that led to last week’s resignation of the company’s co-founder and chief executive, Travis Kalanick.
Fowler said Uber’s human resources department and management did nothing after she reported being propositioned for sex by a male manager.
Fowler’s courage in coming forward offered Caldbeck’s accusers hope that their words could make a difference.
“Susan inspired us,” said Leiti Hsu, co-founder of travel booking service Journy, who accused Caldbeck of groping her under a table at a bar. “It made us wonder whether, if we’d said something, say, five years ago, the public sentiment would have been skeptical or lukewarm at best — and at worst, we feared we’d be ostracized personally and professionally.”
Whether the resignations signal a sea change in Silicon Valley’s male dominated culture remains to be seen. There’s ample reason for skepticism considering that past revelations of sexist behavior haven’t brought about such large-scale change. But at the very least, the departures are being viewed as signs of progress in an industry where women can suffer severe consequences for speaking out.
It was only two years ago that one of Silicon Valley’s most powerful venture firms, Kleiner Perkins Caufield & Byers, famously fended off a gender discrimination lawsuit brought by one of its former partners, Ellen Pao, leaving her with a $1-million legal bill and as the target of vicious misogynistic attacks.
“The bravery of a few has had a positive impact,” said Eve Wagner, founding partner of the law firm Sauer & Wagner, which represents employers in sexual harassment and discrimination claims.
“Any complaint made has to be investigated under the law and there are antidiscrimination protections for those who come forward, but that doesn’t mean there won’t be subtle discrimination in the workplace,” Wagner added. “It can be hard for a woman to stand up and say something without fear of dynamics in the workplace changing. It can be as simple as other male co-workers not wanting to go out after work with a woman after she makes a claim.”
Other experts pointed to public opinion playing a major role in pressuring companies and investors to address instances of abuse and harassment.
“We might be at a tipping point here. If a woman comes forward and nothing is done about it, there is disgrace and that’s a big change,” said Bernice Ledbetter, director of Pepperdine University’s Center for Women in Leadership.
The controversy at Binary Capital underscores the potentially dangerous power dynamic between male venture capitalists and female entrepreneurs.
Three of Caldbeck’s six accusers spoke to tech industry publication the Information on the record.
In addition to Hsu, there was Susan Ho, another Journy co-founder, who said Caldbeck sent unwanted, explicit late-night text messages as Binary considered investing in her company; and Niniane Wang, chief executive of 3-D animation company Evertoon, who alleged that Caldbeck tried to sleep with her while recruiting her for a job.
Since they were seeking potential funding from Binary, and therefore not employees, the women did not have the benefit of a human resources department to which they could file a complaint.
“There’s no governing body to hold these companies accountable,” said Wayne Sutton, co-founder of Change Catalyst, a group that promotes diversity in tech.
In a blog post Monday, Ho described the agonizing decision to go public with the accusation against Caldbeck.
“[W]e can’t normalize this behavior anymore,” Ho wrote. “It’s not normal and it should not be standard operating procedure for women in tech to have to deal with this. After hearing from other women about Caldbeck’s behavior towards them, instances that were much more egregious than what we experienced, we decided we had to say something.”
Jonathan Teo, who co-founded Binary with Caldbeck in 2014, announced his partner’s resignation in an email to the firm late Sunday evening.
“I trusted my partner and it is clear that I shouldn’t have,” Teo wrote. “The predatory behavior Justin has been accused of is deplorable, and there will be zero tolerance at our firm of any conduct that is demeaning to women.”
Caldbeck, who could not be reached for an interview, initially contested the report published Thursday, telling the Information he strongly denied its “attacks on my character. The fact is, I have always enjoyed respectful relationships with female founders, business partners, and investors.”
On Friday, he changed his tune.
“The past 24 hours have been the darkest of my life. I have made many mistakes over the course of my career, some of which were brought to light this week,” Caldbeck said. “To say I’m sorry about my behavior is a categorical understatement. Still, I need to say it: I am so, so sorry.”
His apology was met with deep skepticism by at least one of his accusers, Wang, who said she had been trying to expose Caldbeck’s harassment for years.
“I do not believe that someone can harass women for 10 years, tell the people who exposed him to go [expletive] themselves, and then 24 hours later, thank them for bringing him self-awareness,” Wang wrote in a blog post Saturday.
The accusers have found supporters in high places. Reid Hoffman, the billionaire tech entrepreneur, used the Binary scandal to condemn sexism and abuse in the tech industry. Using the hashtag #DecencyPledge, he called on venture capital firms to separate business relationships from personal relationships, report misbehavior and to stop doing business with abusers. Failing to act, he said, would only bolster criticism that Silicon Valley is designed for women to fail.
“This criticism is important. I welcome it,” Hoffman wrote. “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,.”
While far from household names, the two Binary co-founders earned some notoriety by investing early in Snapchat and Instagram with previous firms.
Binary currently manages $125 million in its first fund.
Venture capitalist Matt Mazzeo recently joined the firm as its third partner, but he announced his departure as well Sunday, saying he could no longer be associated with Binary because of its affiliation with Caldbeck.
Binary delayed closing on roughly $75 million in new capital Friday, which was supposed to be timed with Mazzeo’s hiring. The new capital would have added to the $175 million Binary had already raised for its second fund.
Given Silicon Valley’s poor track record of punishing sexual harassers, some in the industry are deeply skeptical that Caldbeck will pay a heavy price for his behavior in the long run.
“It’s kind of like Whack-A-Mole,” said Allyson Kapin, founder of Women Who Tech. “These stories come out, someone gets fired or resigns and everything is OK for a bit, but then new things keep popping up. He’ll [Caldbeck] be fine, he’ll be back in six months doing it again. He’ll be investing and people will take his money and he’ll probably excel. We’ve seen this before.”
June 27, 10 a.m.: This article was updated to include more context about the inspiration Susan Fowler’s blog post provided Justin Caldbeck’s accusers.
4:45 p.m.: This article was updated to include comment from Leiti Hsu, one of the women who spoke out against tech investor Justin Caldbeck.
This article was originally published at 11:35 a.m. June 26.