Some investors are thinking twice about backing VC firms with female partners

Ellen paoAP ImagesFormer Kleiner partner John Denniston, partner John Doerr, and former partner Ellen Pao.

As Ellen Pao’s gender discrimination suitagainst her former employer–venture capital firmKleiner Perkins Caulfield & Byers — gets underway, investors are thinking twice about backing VC firms with female partners, according to Fortune’s Dan Primack.

“Over the past couple of months, I have heard three male limited partners say (on background, natch) that the case has caused them to view gender-mixed firms as more of a negative than a positive because of extra litigation risk (none said they wouldn’t invest, just that it was a data point that they consider),” Primack said in an email newsletter on Wednesday.

Limited partners invest in VC firms, who then invest the money in startups.

It seems some of the partners Primack talked to are wary about backing firms with female partners because any possible conflict — like a discrimination lawsuit — could impact their bottom line.

Primack said these partners’ hesitance was a “distressing development” but also suggested that opposition to hiring female partners could be a minority opinion, not the industry consensus.

To be sure, the three people Primack talked to don’t represent all investors. But it’s a good example of how sexism persists and can be perpetuated by wealthy people with influence.

NOW WATCH: 14 things you didn’t know your iPhone headphones could do

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.