In the aftermath of Ellen Pao’s gender discrimination lawsuit against her former employer, VC firm Kleiner Perkins Caufield & Byers, some industry watchers fretted that, despite Kleiner’s victory, the suit might have a “chilling effect” on other venture firms when it comes to hiring more women.
Now, as another gender-related suit rocks Silicon Valley, it’s hard not to wonder about a different type of chilling effect—one felt by women in, or considering going into, venture capital.
Let’s be clear about one thing right off the bat: The complaint against former Sequoia Capital partner Michael Goguen is very, very different from the one brought by Pao.
Goguen is being sued by Amber Laurel Baptiste, who claims that he sexually, physically and emotionally abused her for 13 years, then agreed to pay her $40 million dollars in compensation for her suffering, only to stop the payments after the first $10 million. Goguen denies the abuse allegations in a counter-complaint, and further claims that Baptiste attempted to extort him and then violated the terms of their settlement.
Sequoia, which parted ways with Goguen after it became aware of the suit on Thursday, was quick to tweet that the allegations “are unrelated” to the firm.
That may very well be true. Baptiste is not an employee of Sequoia and it possible that no one at the firm knew anything about the situation. I have no doubt that we’ll learn more about that as the case unfolds.
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But that does not mean the VC firm will escape this ugly situation unscathed. At the very least, it is likely to remind observers that the Sequoia—one of the most prestigious firms in Silicon Valley—has no female investing partners. It may also refresh their memories about the statements chairman Michael Moritz made last December when asked about that fact. “We look very hard. What we’re not prepared to do is to lower our standards,” he told Bloomberg TV, implying that the firm would be happy to hire more qualified female candidates—if only they actually existed. (He later hedged the statement, saying, “We need to do better.”) Worse, the horrific allegations in Baptiste’s claim could prompt women to wonder about the culture of a firm could have employed such a man for nearly 20 years.
The suit also has the potential to hurt venture capital as a whole. We all know the depressing fact that women account for just 6% of partners at VC firms. And we know that there have been other distressing allegations, such as a sexual harassment suit filed by three former female employees of CMEA Capital, which the VC firm settled in 2014. With the Goguen case coming so soon after the Pao trial—which revealed a pervasive streak of sexism running through the industry—it’s tempting draw all these threads together and conclude that such a male-dominated field remains a friendly place for men who abuse their power.
