It's the latest twist in the ugly story of rampant sexual harassment and discrimination in Silicon Valley: A powerful VC firm reportedly used coercion to silence a founder who had been harassed by one of its partners.

The tech websites Axios and Recode report that in 2013, Stitch Fix founder Katrina Lake complained to the VC firm Lightspeed Venture Partners, saying that then-partner Justin Caldbeck had sexually harassed her and asking for him to be removed as an observer on the Stitch Fix board of directors. The firm did remove him but also presented her with a non-disparagement agreement in which she had to promise not to say anything negative about the firm or its partners. At the time, she was working to raise a round of needed funding for Stitch Fix and was well aware that Lightspeed could prevent that deal from taking place. She signed the agreement.

Neither Lake nor Lightspeed have publicly commented on these accounts--and indeed, their non-disparagement agreement bars them from doing so. But the reports (and the document itself, which Axios has published in somewhat blurry form) seem to make clear that the firm forced her to choose between speaking out about what happened and the welfare of her company. Because she chose her company and employees over her right to tell the truth (as most founders likely would), Lightspeed enabled years of continued bad behavior from Caldbeck. Before Lightspeed, Caldbeck was a partner at Bain Capital, and about a year after the incident with Stitch Fix, he left Lightspeed to co-found the early-stage VC firm Binary Partners. There have been reports of him committing sexual harassment at all three companies.

One female founder says he texted her at odd hours of the night and asked why she preferred her boyfriend to him. Another said he groped her under a table. A third said that, while at Bain Capital, he wanted to "finish the conversation" about funding her startup in his hotel room. And Ann Lai, a former Binary employee, is suing both Caldbeck and the firm, citing an atmosphere of sexism and harassment and quoting a long list of messages and threats she says he sent her via text and email after she left the company. She also describes (and the messages make clear) the extraordinary lengths he went to to blacken her name throughout Silicon Valley and beyond.

Though neither party has claimed that Lai and Caldbedk were ever more than colleagues, his messages quoted in her filing have the tone of an angry, rejected boyfriend, alternately pleading with her to talk to him even for just ten minutes and threatening to destroy her if she continued to ignore him. If genuine, they speak volumes about Caldbeck's attitudes and how he treats the women he works with. Faced with multiple accusations, Caldbeck has publicly apologized and resigned from Binary Capital. So have its other two partners, leaving the firm's future in serious doubt.

Lightspeed, Caldbeck's previous employer, tweeted this statement:

Justin's behavior as described in recent reporting is completely unacceptable. We received a complaint regarding Justin from a portfolio company [presumably Stitch Fix] during his time at Lightspeed. In response, we removed him as a board observer at the request of that company. In light of what we have learned since, we regret we did not take stronger action. It is clear now that we should have done more.

They're not the only ones. This past week, Silicon Valley has been rocked by the revelations of 24 female startup founders who reported rampant sexual harassment, naming industry stars such as Chris Sacca and Dave McClure in addition to Caldbeck. The whole public discussion began with former Uber engineer Susan Fowler, who posted a detailed blog post about her year working at the ride-share unicorn and the sexual harassment she and other female engineers routinely faced there. When she complained about sexual advances from her manager, HR claimed it was his first offense and that therefore he would not be disciplined.

Her experience took on Orwellian qualities as Fowler met other female engineers who'd been harassed by that same manager over the years and had reported it to HR, only to be told in each case that it was his first offense and no one else had ever complained about him. At one point, she and several other women decided together to all go to HR in a series of meetings to the manager and insist something be done. Nevertheless, Fowler was told that the manager had only committed one offense (against her), and that of all the other women who'd met with HR, none had anything bad to say about him. "It was such a blatant lie that there was really nothing I could do," she writes.

Fowler's account, Lai's lawsuit, and now the revelation of the letter Lake was forced to sign all paint the same ugly picture of a startup industry filled with company leaders and investors who don't care who gets hurt or how badly so long as their own reputations remain intact. And an industry that lets them do whatever they want, not only because it's populated mostly by men, but also because it's in thrall to those like Travis Kalanick and Caldbeck who seem able to turn startup dreams into billion-dollar valuations. That's not good enough. Silicon Valley needs to do better.

Although news of the non-disparagement agreement Lake had to sign is now public, its terms still prevent her from commenting on it, on Lightspeed, or on Caldbeck. But she did issue this general statement:

Female entrepreneurs are a critical part of the fabric of Silicon Valley. It's important to expose the type of behavior that's been reported in the last few weeks, so the community can recognize and address these problems. I'm encouraged by the discussions that have been taking place and I intend to play a part in making positive changes in our industry.

Let's hope that industry is willing to change.

(Here's my open letter to Silicon Valley, suggesting some concrete steps to fix the sexual harassment mess--including doing away with agreements like this one, which may be illegal in California anyhow.)

Published on: Jul 2, 2017
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