Steven Sinofsky isn’t a household name outside tech circles, but he once ran the operating system on more than 90% of the world’s PCs, and now quietly sits as a board partner at one of Silicon Valley’s most powerful venture firms, Andreessen Horowitz. He’s also, as Fortune’s new investigation digs into, a former Microsoft insider who turned to Jeffrey Epstein as a seven‑figure fixer on his way out of the company.
Sinofsky joined Microsoft straight out of grad school in 1989 and climbed from software engineer to president of the Windows division, overseeing Windows 7 and Windows 8. He was once even seen as a possible successor to Steve Ballmer. When he abruptly left in 2012, his departure temporarily knocked billions off Microsoft’s market cap.
Today, he’s a board partner at Andreessen Horowitz, representing the firm on select portfolio company boards and advising founders on product, strategy, and scaling.
What that résumé doesn’t show, however, is Sinofsky’s entanglement in the murkier corners of the business world. Department of Justice documents detail how, after leaving Microsoft, Sinofsky brought on Jeffrey Epstein—an already convicted sex offender—as a paid negotiator on his exit deal. Emails, reviewed by Fortune, show Epstein critiquing drafts of Sinofsky’s resignation agreement, especially non‑disparagement language in the draft, and ultimately collecting a $1 million fee when Sinofsky secured a $14 million package.
Those same records place Sinofsky in the tight orbit through which Epstein sought influence over Bill Gates, aided by Sinofsky’s longtime partner Melanie Walker, a Gates Foundation alum who fed Epstein internal Microsoft gossip years before Sinofsky’s exit, files published by the DOJ reveal. Through a series of other interactions (Epstein document search tool JMail cites over 1,400 emails and mentions of Sinofsky in the communications), Sinofsky remained in contact with Epstein in a personal capacity until at least late 2017, and appeared to help Epstein keep tabs on various other tech figures and startups, including details on WeWork as its business model came into question, and feedback on various startup investment opportunities. Sinofsky also appeared to use Epstein as a professional sounding board, keeping him informed on the Andreessen Horowitz opportunity and an exploratory conversation he apparently had with another tech bigwig.
Sinofsky hasn’t been charged with any crime, nor accused of any wrongdoing. Sinofsky did not provide a comment to Fortune, and a16z did not immediately respond to Fortune’s request for comment. Microsoft declined to comment. Venture capitalists are known for doing their due diligence. But the question this episode raises is how much do founders know about the investors, their LPs, and the sometimes murky dealings swirling in the corridors of money and power? You can read the full story in Fortune here.
See you tomorrow,
Lily Mae Lazarus
X: @LilyMaeLazarus
Email: lily.lazarus@fortune.com
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VENTURE CAPITAL
- Quince, a San Francisco-based direct-to-consumer retail brand, raised $500 million in Series E funding. ICONIQ led the round and was joined by Baillie Gifford, Basis Set Ventures, DST Global, Marcy Venture Partners, Notable Capital, Wellington Management, and WndrCo.
- Rhoda, a Palo Alto, Calif.-based developer of intelligence models for industrial and commercial robots, raised $450 million in Series A funding from Capricorn Investment Group, Khosla Ventures, Leitmotif, Matter Venture Partners, Mayfield, Premji Invest, and others.
- Xscape Photonics, a Santa Clara, Calif.-based developer of silicon photonics designed to improve AI bandwidth, raised $37 million in Series A funding. Addition led the round and was joined by IAG Capital Partners, NVIDIA, and others.
- Swarm Aero, an Oxnard, Calif.-based designer of software for large uncrewed aerial swarms, raised $35 million in Series A funding. Two Sigma Ventures led the round and was joined by Khosla Ventures, Scribble Ventures, Friends & Family Capital, Construct Capital, Coatue, Founders Fund, Alumni Ventures, and MaC Venture Capital.
- Standard Kernel, a Palo Alto, Calif.-based developer of AI systems designed to automatically generate ultra-optimized GPU software, raised $20 million in seed funding. Jump Capital led the round and was joined by General Catalyst, Felicis, Cowboy Ventures, Link Ventures, and others.
- Zymtrace, a Wilmington, Del.-based AI infrastructure optimization platform, raised $12.2 million across seed and pre-seed rounds. Venture Guides led the $8.5 million seed round, joined by Mango Capital, Fly Ventures, 6 Degrees Capital, and angel investors. Fly Ventures and Mango Capital led the $3.7 million pre-seed round, joined by Entropy Industrial Capital.
- Mantis Space, an Albuquerque, N.M.-based space and advanced energy startup, raised $10 million in seed funding from Rule 1 Ventures and Montauk Capital.
- Taya, a San Francisco-based developer of a wearable AI necklace, raised $5 million in seed funding. MaC Venture Capital and Female Founders Fund led the round and was joined by a16z speedrun.
- Option Circle, a San Jose, Calif.-based developer of an AI-powered platform designed to automate stock and options trading, raised $3 million in funding from Savoie Capital, Wagon Wheel Capital, and others.
PRIVATE EQUITY
- AIM MRO, a portfolio company of AE Industrial, acquired AA Bushings, a Jupiter, Fla.-based manufacturer of parts for landing gear applications. Financial terms were not disclosed.
- Chimney Rock Equity Partners acquired Gas Clip Technologies, a Cedar Hill, Texas-based gas detection products provider. Financial terms were not disclosed.
- Trident Solutions, a portfolio company of ATL Partners, acquired Ibeos, a Sterling, Va.-based space electronics company. Financial terms were not disclosed.
EXITS
- Greenbelt Capital Management agreed to acquire Peak Utility Services Group, a Broomfield, Colo.-based maintenance, repair, and upgrade services company for the utility sector, from ORIX Capital Partners. Financial terms were not disclosed.
- KPS Capital Partners agreed to acquire a majority stake in Jenmar, a Pittsburgh, Pa.-based infrastructure products and services company. A portion of that stake comes from FalconPoint Partners, which will remain a minority shareholder in the company.
FUNDS + FUNDS OF FUNDS
- Coefficient Capital, a New York City-based growth equity firm, raised $290 million for its second fund and $240 million for its Apex fund focused on consumer brands.
- Elaia, a Paris, France-based venture capital firm, raised €134 million ($155 million) for its third deep tech seed fund.
