Courtesy of DFJ
By Polina Marinova
December 5, 2018

If you’re in Silicon Valley, you probably already know Heidi Roizen’s name.

The entrepreneur-turned-investor spent 14 years running a software company called T/Maker that she co-founded with her brother. After it was acquired by Deluxe Corporation, she joined Apple as the VP of Worldwide Developer Relations. A year into her role, Steve Jobs returned to the tech giant. Roizen left the company six weeks later.

“While I believed that Steve would probably have a great impact on Apple, I wasn’t sure it was the right time in my life to throw myself at that,” Roizen told Term Sheet.

She returned to her entrepreneurial roots by “rolling up my sleeves, helping companies in any way I could, and getting paid in equity.” She eventually made her way into venture capital and landed at DFJ, one of the best-known VC firms in the Bay Area.

But it hasn’t exactly been an easy year for DFJ.

The firm had to deal with the aftermath of the sexual harassment allegations against founding partner Steve Jurvetson. In a wide-ranging conversation, Roizen discusses a number of topics including how DFJ dealt with the allegations and what the firm is doing differently today.

TERM SHEET: You were a managing director at SoftBank Venture Capital (later re-named Mobius Venture Capital), a $3 billion fund that focused on early-stage internet startups, for 8 years. Having worked there, what can you tell me about SoftBank’s investment strategy today with Masayoshi Son at its helm?

ROIZEN: I didn’t have a ton of overlap with Masa — even having been at SoftBank Venture, we ran as a very independent entity. But I have always been in awe of Masa ever since the early days of SoftBank back when they were actually a distributor of T/Maker products. I’m in awe of him as a person with a very long-term vision and a person who makes incredibly bold moves. Someone who does that will have their fortunes go up and down, but I think it’s a remarkable testament to him that he’s been able to weather those things and to come out so strong. The story has not yet been written on the Vision Fund and what the outcome will be. [Uber CEO] Dara Khosrowshahi said, “Rather than having [SoftBank’s] capital cannon facing me, I’d rather have their capital cannon behind me.” That, to me, summarizes the whole strategy.

You don’t think SoftBank’s ties to Saudi Arabia will affect its ability to close deals where founders reject its money on moral grounds?

ROIZEN: Look, who you take capital from is a choice — and it’s a very important choice. I think there are some entrepreneurs who don’t weigh that choice very heavily, and there are some who do. Some entrepreneurs will weigh it on what’s good for my company and what’s good for me. There aren’t 10 SoftBanks in the market, so many times, I would suspect SoftBank is the only bidder in the range of what they’re doing. Different entrepreneurs filter in different ways.

I teach an entrepreneurship class at Stanford, and I had a fascinating discussion with my students yesterday. I said, “Let’s take two extreme cases. One of them is you have a company that’s going to cure cancer. SoftBank is willing to invest in you, and they’re the only ones who have given you a term sheet. Do you take the money? Now, let’s take the flip side: You’re a VC and all of your money comes from pension funds and you realize you can invest in [e-cigarette startup] Juul and it will be a fabulous outcome.” I mean, which one of those is more ethical than the other?

It’s a very interesting question, and we are absolutely today in the era of people thinking through the ethical implications of their choices and the ethical implications of the unintended consequences of their inventions. I think we’re just in uncharted territory here.

I also think it’s fascinating that we’re focused on Saudi Arabia because of the unique circumstances around the murder of Jamal Khashoggi. And yet, if we’re really going to draw the line on all transgressions of human rights, there’s a long list of those.

Since the Khashoggi scandal, have portfolio founders asked you about DFJ’s limited partners?

ROIZEN: Yes, it has been a topic of conversation. One of the things I talk to our entrepreneurs about is that when they make a return for DFJ, they’re also supporting some college endowments and teacher retirement funds.

Founders need to pay attention to who they’re working with in part because you end up with a relationship that lasts roughly seven or eight years. And the average American marriage also lasts about eight years. It’s actually probably easier to get divorced than to get rid of an investor you don’t like, so people should really understand this before they strike a deal.

You’ve been vocal about sexual harassment, and you’ve written on your blog about a few very disturbing incidents that happened to you early in your career. Are things any different in the tech industry today?

ROIZEN: They are different, and they are moving in a positive direction. In that blog post, I wrote that no actual criminal thing happened in those instances, and someone wrote to me and pointed out that what that guy did was, in fact, an illegal act. I’ve talked to women my own age who have dealt with stuff like that and the idea that one could report it and send to someone to jail over it … I don’t even think it ever entered our minds. The mindset was so different. Today, there is an awareness and an understanding of what’s acceptable and what’s not, and there are avenues in addressing it that I didn’t have in my early days.

There are a number of things that drove that change. One is that there are more women entering the field, and you end up getting some strength. And secondly, one of the positive things of social media is that women are speaking out publicly. Unfortunately, we are in a situation where the vast majority of the power in investing is still in the hands of men. Now, the good news is that the vast majority of those men are good people. I think it is a bold move to call someone out when you’re in the position of raising money. The multitude of stories that came out last year were evidence that women didn’t think they could call it out because they didn’t feel they were in a position of power at the time.

That power dynamic is changing because social media has allowed messages to get amplified. Now, obviously, there are pros and cons to that — there are unintended consequences and there are some bad actors who are out there promoting messages for reasons other than speaking truth. We are in some hazy days, and we are in a place where there are some difficult situations, but I do think in general, we are moving in the right direction.

Your own venture firm was rocked by sexual misconduct allegations against DFJ founding partner Steve Jurvetson last year. (A female entrepreneur alleged in a Facebook post that “women approached by founding partners of Draper Fisher Jurvetson should be careful,” citing “predatory behavior.”) How did you react as a firm when those allegations first came out?

ROIZEN: I can’t really talk about that situation. As you know, we and Steve have parted ways. I can tell you that we all need to take all allegations seriously, and we did. We engaged in a thorough investigation with an independent investigator. That investigation was for our partners to determine what the situation was and how we wanted to act on it. Everyone wants to follow the drama of these situations, and everyone wants to know the details, and the reality is that’s not why we want to engage in an investigation. We want to engage in an investigation to find out as much as we can to help in decision-making.

Did you share the findings of the investigation with the public?

ROIZEN: No, and we won’t. Part of it is out of respect to everyone involved. One of the things I think people should be aware of is, what is the upside for a woman to come forward in an investigation? There is no financial gain in any of these situations, the person will be ostracized by certain groups, and they’ll be taunted on social media. In order for someone to speak up, my belief is that if you can provide a confidential environment and not expose that person to the public ramifications, you enable a situation where more people feel like they can be heard.

[Term Sheet Note: Jurvetson left the firm following the internal investigation.]

You wrote a blog post pushing back on claims that “predatory behavior is rampant” at DFJ. How do you respond to people who criticized you for defending Steve after the allegations came out?

ROIZEN: I stand by that blog post. People wrote to me after I published it, and I wondered whether I should take it down, but I didn’t because I actually stand by what I said. And what I said is that I defended DFJ. The single allegation in a Facebook post was that predatory behavior was rampant among the partners, and it was not. And one of the things that our investigation also evaluated that I’m very proud of is that, in fact, that type of behavior was not rampant among our partners. We have a good culture at DFJ, and we learned some things that are enabling us to improve our culture, but more than 50% of the employees at DFJ are women, and I’m very proud of that. It’s a wake-up call to any firm when you hear these types of allegations to say, “Do we have a bigger issue here?” It would be crazy to not try to figure that out.

Are you doing anything differently as a firm as a result of it?

ROIZEN: Anytime you go through something like we went through, you become more sensitive to understanding subtle messages and you understand that you need a better process for reporting things. On our website, we now have a methodology for reporting a violation of any kind. We are comfortable engaging an external resource who evaluates it independently. The short story is we have a process in place that does the utmost to protect the individual and try to seek the truth in any allegation that comes through now. You have to put energy and effort in making sure that you have systems that work. I am proud to go to work every day at DFJ, and I couldn’t be prouder of my partners.

You sit on the board of Zoox, a company developing a robot taxi. The CEO recently blamed the board for abruptly removing him from the chief executive role. Can you give me any insight as to what happened there?

ROIZEN: No, I can’t. Look, one of the things you do as a venture capitalist is that you have to make really hard decisions around governance. And that’s why you have boards and independent directors and sometimes you make tough decisions. [Ex-CEO] Tim [Kentley-Klay] is an amazing entrepreneur and did a great job with his co-founder Jesse Levinson. Tim helped build Zoox into a remarkable company with a bright future.

But no details as to what led to his sudden exit?

ROIZEN: Nope.

You’ve got Memphis Meats, Zoox and Planet. What will our lives look like in 20 years if all the companies in your portfolio are successful?

ROIZEN: I genuinely believe I have the best job in the world. What an amazing opportunity to be able to be in the trenches with entrepreneurs who are actually trying to create things that will have such a dramatic positive difference in the world. I’m not saying there won’t be unintended consequences with each of these things, but when I look at the work being done at any of these companies, it’s really exciting stuff. Imagine the opportunity to change the way animal protein is created, to change the way humanitarian efforts are informed by the fact that Planet images the world every day, to change urban mobility for people who cannot achieve mobility on their own. Our lives could look very different as a result of this work.

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