Silicon Valley reinvents avoidable sexism scandals

Venture-capital doyen Reid Hoffman, who founded LinkedIn, wants an industry-wide "decency pledge"

Silicon Valley reinvents avoidable sexism scandals

By Robert Cyran

NEW YORK (Reuters Breakingviews) - Silicon Valley is reinventing sexism scandals – when it could simply have avoided them. Smallish venture-capital outfit Binary Capital is imploding amid claims of predatory behavior by one of its founders, according to news reports. Similar issues have tarnished others in the technology world, too. VC doyen Reid Hoffman, who founded LinkedIn, wants an industry-wide "decency pledge."

There has been a string of sexual-harassment incidents in tech firms. Currently, ride-hailing pioneer Uber is belatedly addressing its own problems. The fortunes made by male-dominated firms in a clubby, self-confident industry seem to create a culture where making sexual advances or discriminating against women is too often overlooked. Anyone who walked Wall Street's trading floors in the 1980s and 1990s will recognize the atmosphere.

The speed with which events at Binary Capital are unfolding could be a sign of progress. Last week, six women – three quoted by name – said partner Justin Caldbeck made inappropriate advances, as reported by The Information. After apologizing and initially taking leave, he left the firm over the weekend, according to a memo from remaining co-founder Jonathan Teo released by Axios. A new partner quit as well, not wanting to be associated with the firm.

In his response to these events, Hoffman rightly says the relationship between a venture capitalist and a young entrepreneur seeking capital demands rules similar to those governing professors and students or bosses and their underlings. Given the disparity in power, it’s simply not OK for the one to proposition the other in the course of their interaction.

Yet this is such a basic observation that it's remarkable that Hoffman needed to say it. Silicon Valley's iconoclasm – hugely valuable in other ways — means many of its denizens fail to see the need for any rules at all, much less bureaucratic creations like human-resources departments.

Sure, HR guidelines don't help if those at the top don’t care. But finance and other industries have decades of experience tackling this kind of behavior, and that could have saved Uber, Binary Capital and others from costly missteps. Techies like to look ahead. Just occasionally, though, they'd do well to heed wise words from earlier times. Nearly a century ago, G.K. Chesterton advised that no one should tear down a fence until they understand why it was put up.


• Binary Capital said on June 25 that partner Justin Caldbeck had resigned. Fellow partner Matt Mazzeo, who recently joined the venture-capital firm, has also resigned, according to a report by Axios. On June 22, The Information published a story in which six women said Caldbeck had made inappropriate advances during business dealings, several of which occurred when the women were seeking funding.

• Reid Hoffman, a co-founder of LinkedIn and a venture capitalist, said in a post that the story should have been greeted with more outrage, and noted that the power dynamic in the relationship between a venture capitalist and a young entrepreneur is similar to a professor with a student or a manager and his employee. Many VC firms, he said, lack human-resources departments. He called for industry participants to support a "decency pledge."

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