SAN FRANCISCO — Faced with a burgeoning sexual harassment crisis, leaders in Silicon Valley have come up with a very Silicon Valley solution: Use technology to create a blacklist.
One of the region’s most prominent firms recently emailed an online reporting form to 3,500 entrepreneurs, encouraging them to blow the whistle on sexual harassment by venture capitalists. Now it is spearheading an effort to create an app that could provide reviews of financiers, akin to Yelp or the workplace-review site Glassdoor.
“We don’t call it a blacklist, but that is essentially what is happening,” Kat Manalac, a partner at the influential start-up incubator Y Combinator, said of the blast email. “There has always been a whisper network, where investors and entrepreneurs know which other investors are bad actors.” Two other groups are also launching tech start-ups to help victims share their experiences.
The efforts by Y Combinator and others are part of the industry’s urgent search for answers in the wake of sexual harassment scandals that have cemented Silicon Valley’s reputation as hostile to women.
But for all the success the tech industry has had in building products based on ratings systems and online feedback, this is uncharted territory for Silicon Valley and may be fraught with risk, legal experts say.
Anonymous apps, blacklists and databases could backfire — on the makers of the apps, on people who felt unfairly accused or on women themselves — and exacerbate the problem of gender discrimination and harassment, said Debra Katz, a partner with Katz, Marshall and Banks, a Washington, D.C.-based firm specializing in employment law.
Silicon Valley’s long-standing problem with gender discrimination and harassment came to a head in recent weeks, as the Internet lit up with unprecedented outpourings of rage, soul-searching and stories from female start-up founders who publicly said they had been violated by prominent venture capitalists.
The testimonies highlighted the unusual amount of power that venture capitalists — almost all of whom are male — hold in Silicon Valley. Companies have human resources departments with defined sexual harassment policies, but no formal rules govern the relationship between entrepreneurs and financiers, whose whims can make or break a start-up idea.
Some women said they were harassed or touched inappropriately when they went to pitch their companies or sought advice. Others said they were pressured to have sex with promises that their business plans would be funded.
A report last month in the technology publication the Information included detailed descriptions by six women of unwanted advances by Justin Caldbeck, a well-known local investor. The women said Caldbeck sent unwanted explicit text messages in the middle of the night, groped one underneath a hotel bar, and tried to have sex with several when they sought funding. The news sent shock waves through the clubby tech world. Caldbeck resigned from his post, but the fallout continued when his partners quit and investors began to pull money from his firm, Binary Capital.
After similar stories appeared in mainstream media outlets, other venture capitalists apologized and resigned from their companies, including Dave McClure, founder of the start-up incubator 500 Startups.
“When you are in a mind-set when you need to raise money, you will bend over backwards, and a lot of investors take advantage of that,” said Elizabeth Yin, one of the 500 Startups partners who quit in disgust after news emerged that her firm had not acted quickly on news of McClure’s inappropriate behavior. “The power dynamic is appalling.”
Chris Sacca, an early-stage investor in Twitter, Uber and Instagram, who retired from investing this year, was also named in a report by the New York Times and issued a public apology online. “In social settings, under the guise of joking, being collegial, flirting, or having a good time, I undoubtedly caused some women to question themselves, retreat, feel alone, and worry they can’t be their authentic selves,” Sacca wrote on the blogging site Medium.
Their mea culpas highlighted the challenges women face and the stark gender inequality in the Valley. But solutions have not come easy.
One group of women has already founded a start-up, BetterBrave, that aims to be an online hub for female workers who felt they were sexually harassed at work. SheWorx, composed of female entrepreneurs, is planning an online database that would enable women and others to report unethical behavior by investors. Meanwhile, a $112 million venture fund serving female entreprenuers, ReThink Impact, plans to splash an open letter to female founders across the homepage of its website on Monday, inviting those who are frustrated with the current system to seek funding from other women.
LinkedIn founder Reid Hoffman called on all venture capital firms to sign a decency pledge, while a group of venture capitalists published template wording for a sexual harassment policy that firms could adopt.
A number of firms have tweeted support for the pledge, but several prominent women in the industry say that none of these efforts requires companies to make concrete commitments such as a binding agreement to hire more women, disclose harassment to funders or fire people who have broken pledges or policies.
“We’re seeing this movement in Silicon Valley toward pledges, mea culpas and quick fixes,” said Y-Vonne Hutchinson, a Silicon Valley recruiter who focuses on diversity. “I think that’s dangerous. That doesn’t get at the heart of what’s really driving our issues with sexual harassment.”
Y Combinator’s recent email blast to thousands of entrepreneurs asked them to fill out a form with the names of investors who may have engaged in “inappropriate sexual or romantic behavior” toward company founders. Accusers could choose to remain anonymous, the email stated. Those named could be cut off from Demo Day, Y Combinator’s highly anticipated biannual event when entrepreneurs pitch venture capitalists on some of the year’s hottest deals. Partners at Y Combinator are also discussing funding an app that would expose harassers.
Y Combinator said maintaining such a list could protect more women from being victimized and, perhaps for the first time, create real consequences for people who act inappropriately. For legal reasons, Y Combinator changed the reporting form last week to no longer be anonymous.
In addition, the incubator is using its clout to shame investors who behave badly. “Investor at demo day asked a female founder to babysit his kids,” Y Combinator partner Adora Cheung tweeted in March. “He’s been uninvited from future events. Can’t make this stuff up.”
She also tweeted that Y Combinator had disinvited an investor who was trying to replace a female chief executive with a white male.
Manalac said she was struck by reports from women saying they felt that they had no choice but to tolerate harassment, because they felt it was simply the cost of being a nonwhite female executive.
She has doubts about creating a public app such as Glassdoor. She was concerned about whether it could be manipulated by certain users — to act out vendettas against rivals, for example — and whether it would be tainted by conflicts of interests, because it would be funded by the very investors being rated.
“I still have reservations,” she said. “But I’m starting to think that maybe it’s time for a resource like that to exist.”
Researchers say gender dynamics in Silicon Valley are worse than in other industries because of a confluence of factors: the bleak male-to-female ratio in venture firms and at tech companies; the informal nature of venture fundraising and of start-up culture; and financial power imbalances between women and men.
Venture capital is more of a boys club than even Wall Street. Of the five top venture firms — Sequoia, Greylock, Accel, Andreessen Horowitz and Benchmark — three lack a female general partner. (Sequoia has a female investing partner. Benchmark, the largest investor in Uber, has one female partner, whom it poached from Greylock in May, amid the controversies at the ride-hailing giant.)
The tech industry has the biggest gender gap of any profession, with less than 15 percent of the most sought-after and highly compensated engineering roles in Silicon Valley companies filled by women, according to a database of 272 start-ups maintained by Tracy Chou, a Pinterest engineer and founding member of Project Include, a diversity program for chief executives.
Many insiders worry that the efforts could cause a backlash.
“We are hearing VCs saying that they won’t take women entrepreneurs out to dinner or get drinks — only meetings at the office,” said Hutchinson, the recruiter. “Then women will be at a further disadvantage.”
Correction: An earlier version of this story incorrectly stated that four out of the five top venture capital firms in Silicon Valley lack a female general partner. The number is actually three out of five. Sequoia Capital has one female investing partner in the United States.
Jena McGregor in Washington contributed to this report.