Well-known Silicon Valley investor, Dave McClure, has been demoted within the firm he co-founded, 500 Startups, in the latest fallout from revelations of mistreatment of women in the technology industry.
An internal investigation found McClure “had inappropriate interactions with women in the tech community,” according to a blog post published Friday by 500 Startups co-founder Christine Tsai who said the decision to demote him was made a few months ago.
“His behavior was unacceptable and not reflective of 500’s culture and values,” she said. “I sincerely apologize for the choices he made and the pain and stress they’ve caused people.”
McClure will assume a limited role at the firm and is attending counseling, Tsai said. McClure on Friday said in a text message to Reuters that he and Tsai “are still on good terms” and “she has my full support.”
The firm made the change public on Friday following a report by the New York Times that named McClure, along with well-known investor Chris Sacca, as perpetrators of sexual harassment toward women who were applying for jobs or seeking fundraising. The report said McClure was no longer in charge of day-to-day operations.
Sarah Kunst, founder and chief executive of fitness startup Proday, told the New York Times that McClure had sent her an inappropriate Facebook message after she discussed a potential job at 500 Startups.
“Before the New York Times article, Dave had already been demoted because of his harassment of women, however no one outside of 500 Startups had been made aware of this fact,” Kunst told Reuters on Friday “Women did not know to avoid him. The lack of disclosure is part of the problem. Women don’t know who is a bad actor when the funds cover it up.”
McClure referred a request for comment on Kunst’s statement and other questions to a spokeswoman, who declined to comment beyond the blog post.
500 Startups invests in early-stage startups around the world and offers an accelerator program for entrepreneurs. The firm has invested in more than 60 Indian startups since it began investing in the country in 2012. This includes Zipdial (acquired by Twitter), Instamojo, PriceBaba, Innovaccer, Sheroes.in and OnlineTyari among others. Its global investments include the ride-hailing company Grab and personal finance company Credit Karma.
McClure is well known throughout the tech industry because of his contrarian attitudes, which include criticizing venture capitalists, his political statements and his frequent public appearances. He is known to make many investments around the world and far beyond Silicon Valley, in places like Turkey and sub-Saharan Africa.
Sacca, who gained prominence with early investments in Twitter and Uber, on Thursday published a blog post apologizing for his behavior. “I now understand I personally contributed to the problem,” Sacca said. He had announced in April that he was retiring from his VC firm, Lowercase Capital.
Several women spoke to the New York Times after news site The Information published a report last week detailing inappropriate behavior toward women by investor Justin Caldbeck of Binary Capital. He has since resigned and apologized publicly.
In February, former Uber engineer Susan Fowler wrote a blog post detailing the company’s culture of sexual harassment, which prompted a months-long investigation that culminated with the resignation of chief executive Travis Kalanick.
The events have brought new focus to what many in the industry say is a long-standing culture of entrenched sexual harassment and discrimination that has made it difficult for women and racial minorities to raise funds and assume leadership positions.