This is new. A young Silicon Valley tech founder appears to actually be suffering the repercussions of his alleged bad behavior. Of course, it took a lawsuit to make it happen, and the repercussions are pretty mild. But given how commonplace atrocious behavior seems to have become, it's amazing there have been any repercussions at all.

In this case, Sean Rad, one of Tinder's five co-founders, is stepping down from his position as CEO.

Rad's demotion appears to be related to the $1 million settlement of a lawsuit filed by fellow Tinder co-founder Whitney Wolfe. In the suit, Wolfe claimed she was sexually harassed by Rad and a third co-founder, Justin Mateen, with whom she'd had an on-again, off-again relationship.

Wolfe said her co-founder title was removed after she was told that Tinder had too many co-founders (five) and that it would be "slutty" for a woman to be a co-founder of a "hookup" app. (I wonder who the other co-founders thought their users were going to hook up with. Only other guys?) Wolfe said that Mateen's unacceptable post-relationship behavior forced her to resign from the company.

Rad is not falling as far as you might think, and he certainly is faring better than Mateen, who was ousted in September. Rad is staying on Tinder's board, and he's staying on as CEO until a new one is found. He'll be the company's president after that. He's not exactly getting shipped off to Siberia.

Compare his fate with that of Mark Hurd, the CEO of Hewlett-Packard who was caught spending a suspicious amount of time with a marketing consultant. There were no accusations of harassment in that case--it all just looked kind of bad. And Hurd wasn't merely demoted. He was out.

By the standards of venture-backed companies, though, Rad's demotion actually counts as punishment. For all the talk from venture capitalists about how they invest in people first and companies second, they've shown a phenomenal tolerance for bad behavior.

Think about it: In August 2013, Peter Shih, a founder of payments company Celery, posted a rant against homeless people and women who wouldn't give him the time of day on Medium; six months later, he raised $2 million. Rap Genius CEO Mahbod Moghadam engaged in all kinds of offensive behavior; he had to praise the misogynist manifesto of a mass murderer before he finally got fired. It's hard to believe the venture backers of Handy don't know anything about the sexist and racist attitudes there, especially after this article appeared. And by now, it's almost as if we expect some version of sexist bro-gate at each industry event. (Titstare, anyone?)

The difference, of course, is that relatively little bad behavior actually results in a lawsuit. Some companies, Uber in particular, have mastered the ninja move of actually embracing the lawsuits and the clichéd rationalizations that go with them. (It's all about asking forgiveness rather than permission, right? About moving fast and breaking things?)

But as Mateen and now Rad have learned, when lawsuits are based on a founder's alleged personal behavior, and not the tactics of the company, they're a bit harder to ignore. And it looks like there are plenty of those waiting to happen.

Published on: Nov 6, 2014