Cracking The Bro Code

Venture capital’s clubby culture has protected serial harassers. As VCs run for cover, some are starting to ask tougher questions.

- Sarah McBride and Lizette Chapman, with Spencer Soper

Silicon Valley has a communication problem, and the story of Justin Caldbeck shows why. He resigned as a managing partner at San Francisco venture firm Binary Capital LLC a month ago after a half-dozen women told the Information, a tech news site, that he pressured them for sex when they sought business advice or funding. The behavior they describe dates to his days at Bain Capital Ventures, which he joined in 2005; continued into his time at Lightspeed Venture Partners, where he started in 2011; and on to Binary, which he co-founded in 2014.

One Binary backer remembers making more than three dozen calls about Caldbeck and co-founder Jonathan Teo to friends, college roommates, company founders, and co-investors in the companies they’d backed, and says the reference checks were the most enthusiastic ever. Since Caldbeck’s behavior became public, Lightspeed has acknowledged it should have done more to prevent his leaving unpunished, given that at least one of the women complained to the firm about him. When the Binary investor asked Lightspeed why it didn’t mention this during reference calls, the firm said it had signed nondisclosure agreements (NDAs) and couldn’t discuss the situation, according to the investor. Lightspeed declined to comment. Caldbeck resigned from Binary and apologized in a statement for using “a position of power in exchange for sexual gain.”