What does it take to get funded?
If you’re an entrepreneur, the common answer is “whatever it takes.” Common schools of thought teach us that businesses are inherently risky, and if you aren’t willing to put more than 100 percent of yourself into your endeavor, it will fail.
Unfortunately, for some people, this can lead to behavior that is less than ideal. For those in positions of power, it can create an uncomfortable, even toxic environment around them that is difficult to navigate.
At Binary Capital in Silicon Valley, venture capitalist Justin Caldbeck was in such a position of power. By being the manager of a fund, his decisions gave people the ability to continue running their companies by writing the checks they needed to fund them.
Unfortunately, over the years at his firm, he abused this position. According to a June 22 article, multiple women including Niniane Wang, former CTO of Minted, said he “sent explicit text messages to women,” “sent messages in the middle of the night suggesting meeting up,” “suggested going to a hotel bedroom during a meeting,” “made a proposition about having an open relationship,” and “grabbed a woman’s thigh under the table of a bar during a meeting.” Within 24 hours, he’d announced an indefinite leave of absence and then ultimately resigned.
Imagine for a second that you’re a young, female, perhaps first-time startup founder, having sent out hundreds of messages, talked to as many or more people trying to raise capital for your startup, when you finally get a “Yes” email or text. You’re so excited, you dash off to meet this interested venture capitalist to the restaurant, or bar, or whatever location he’s added to your calendar invite.
When you arrive, you’re treated like the women above. What do you do?
This is the kind of behavior that would normally get someone kicked off of a Tinder date, much less out of a business meeting. What’s worse, Caldbeck is a married man, with a family.
Wang wrote, “I’ve been trying to expose Justin for 7 years.” Jonathan Teo, Caldbeck’s Partner at Binary, responded: “I chose to work with him to form Binary, I told him in no uncertain terms that no bad behavior was ever going to be tolerated at Binary.”
Perhaps the most interesting thing about this is that Ann Lai, former principal at Binary, has filed a lawsuit, alleging that she was also harassed by Caldbeck not to divulge information. Sources claim that her May 2016 resignation letter contained her moral repugnance at the goings-on at the firm, and specifically called out an inappropriate relationship between Caldbeck and another female colleague there.
While what happens at Binary sets the bar for reprehensible and predatory behavior, I should note that while writing this post, many women came forward to tell me stories they’ve experienced at the hands of other venture capitalists — but many are afraid to come on record for fear of losing their chances at future funding.
Since the story initially broke, another partner at Binary, Mike Mazzeoalso quit his position, and Teo himself has offered to quit the fund. Clearly, more information about Binary is yet to be uncovered.
In the future, when you ask yourself “What does it take to get funded?” your dignity shouldn’t be on the line.
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