Venture capitalist Dave McClure is done. This one’s important. VCs come and go all the time, but McClure is out at 500 Startups, the Mountain View, California-based venture fund and startup accelerator he helped cofound in 2010.
Seven someodd years later, and McClure’s finished there. There was no posh gig elsewhere. His ouster wasn’t a performance-based result, either. As reported by the New York Times, McClure’s on the skids because he allegedly sexually assaulted at least one woman and harassed multiple others, per testimonies from the women.
In the wake of the scandal’s public unveiling, McClure tried his hand at public self-flagellation: an apology, via a blog post on Medium titled “I’m a Creep. I’m Sorry.”
At best, it’s a trite, failed effort. Especially when you take into consideration what happened nextand the lack of transparency throughout the process of McClure’s ouster.
For example: You wouldn’t have learned about the allegations from reading McClure’s apology. But we know now, as TechCrunch reported, that he was investigated by his company back in Maywhere they found some validity to the accusations of sexual harassment against him, and consequently, stripped him of his title as CEO.
News only got out when entrepreneur Sarah Kunst shared a story about McClure with The New York Times, in which 500 Startups ended conversations about working with her after she declined a sexual advance from McClure. That was published in the Times on June 30.
Two days later, McClure posted his apology on Medium.
Two days after that, McClure resigned from the companya resignation that, apparently, wasn’t of his own volition.
And that’s a key takeaway: McClure remained in his position until things got so bad, it became patently untenable for the firm to protect him. For 500 Startups, a crisis threshold had to be reached for McClure to be out. Instead of, you know, the basic standard for human decency that had already been slithered under, long before the Times published anything.
For 500 Startups, a crisis threshold had to be reached for McClure to be finished there. Instead of, you know, the basic standard for human decency that had already been slithered under.
McClure wasn’t the only Silicon Valley venture capitalist outed for inappropriate behavior last week, nor was he the only one who tried their hand at public, sobby, bloggy redemption. The New York Times also pointed to venture capitalist and Shark Tank “star” Chris Sacca as another perpetrator of sexual harassment towards women in tech, via the testimonies of several sources who’d been on the receiving end of Sacca’s behavior.
So of course: Sacca took to Medium, and published an apology blog: “I Have More Work To Do.”
It read as though Sacca had become “woke” to sexism in the tech industry overnighta cringeworthy notion in itself. But the truth? He was trying to cover his ass for the accusations that the Times would publish shortly thereafter, by preempting them with his own PR spin.
What we don’t need is men writing unsympathetic apology notes.
It read as though Sacca had become “woke” to sexism in the tech industry overnighta cringeworthy notion in itself.
Sacca wrote “I’m sorry” five times. What’s more important than his (supposed) contrition is putting actions and resources towards help support women entrepreneurs. We need not Medium posts by men getting woke to their own creepiness (especially when they’re allegedly not just “creeps,” but assaulters, too).
Sallie Krawcheck, the CEO and cofounder of Ellevest, a digital investment platform for women, and formerly one of the most powerful woman on Wall Street, echoed similar disdain for the Medium posts in a poignant post of her own on LinkedIn.
When asked if Sacca and McClure should have written their posts a different way or perhaps not written them at all, Krawcheck was succinct: “What they should have done is not sexually harass people. Once youve done that youve run out of good choices.”
“Do you publish or not publish? It would have been nice if they [wrote] about being sorry before they got caught,” she continued.
While some companies continue to deny and hide problems, more and more are being forced to make these changes. A sparse few are voluntarily changing their ways, and maybe they’ll grow in their ranks. Because what was once whispers against founders and venture capitalists are now being exposedand the pressure will mount, and continue to mount. The choice now for these companies is to take part in this progress, or be bulldozed by it.
Yet a larger, more systemic issue remains: Is the venture capital industry broken? The people who provide the money to the VC industrylimited partners (LPs), which include university endowments and pensionsdon’t have direct control over how these companies operate. It’d be difficult (if not nearly impossible) for these LPs to police venture capitalists or the founders they fund. And the direct benefit to them may be slim, since contributions from these funds could be only a fraction of their overall investments, Krawcheck noted.
Krawcheck likened an issue in Silicon Valley with an identical problem on Wall Street, where she worked for decades including during the 2008 financial crisis.
“The thing that [Wall Street] has in common [with Silicon Valley] is lots of money, which means lots of power, and a homogenous community,” Krawcheck said. “We need diversity, cognitive diversity, diversity of background and educations, able-disable and orientations. It’s all kinds of diversity, gender being just one of them.”
Cindy Gallop, an advertising executive, consultant, and founder of MakeLoveNotPorn, agreed on the need to fund more women:
But who’s about to push this forward? What’s the incentive for the venture capitalist, or the entrepreneur? Try: Several studies pointing to diversity driving better results.
Krawcheck cited a report from First Round Capital that found investments in companies with women in senior leadership positions delivered 63 percent better returns than men-only companies.
Thankfully, we’re starting to see some change in that makeup, too. Several funds have emerged with women in positions of power. Take, for example, Arlan Hamilton, founder and managing partner of Backstage Capital. Hamilton is black, female, and gay. Her fund helps support more than 40 companies led by underrepresented founders.
Steve Case, founder of AOL, and his wife Jean Case, CEO of the Case Foundation, are both actively looking to fund underrepresented entrepreneurs. Case contributed to the Focus Fund, led by JumpStart Inc., an Ohio-based nonprofit focused on women and minority entrepreneurs.
Theres no regulatory body that can change Silicon Valley beyond basic labor employment laws, and there are even some tweaks that can be made there. Erica Baker, an engineer and diversity advocate, pointed to sexual harassment laws:
Current sexual harassment law does not cover the relationship between founder and VC. We need to change this.
EricaJoy (@EricaJoy) July 3, 2017
There also a few pledges being passed around the Valley: the Founders Pledge is about dedicating money to philanthropy and the Decency Pledge, proposed by LinkedIn cofounder Reid Hoffman, is focused on venture capitalists thinking about their morals.
That may not change anything. But at least it’s an acknowledgement that isn’t an “I’m sorry” or “I’m a creep” after so much damage has already been done.
Another important silver lining here? More people speaking out about the toxic culture of venture capitalism and the tech industry. It’s unfortunate that sexual harassment lawsuits against tech entrepreneurs continue to pile up in Silicon Valley for it to happen. But it also represents progressthe kind that’s as corrective as it is long, long overdue.
In the mean time, in the middle of writing this story, it happened again: Marc Canter, yet another VC accused of harassment, wrote a Medium post. And you already know where this is goingand what the first four words of that post were:
Silicon Valley is supposed to be the global capitol of ambition. They should want more than a chance to apologize after the fact. They should want to change. They should want to do better. And like it or not, they’re about to be forced to.