When Chris Sacca took the stage at the South by Southwest conference in March, the “Shark Tank” judge kicked off his talk by doling out cans of beers to the women sitting in the front rows.
“We’re going to do this unlike Uber. The women get them first,” Sacca said to the crowd of fans that would mob him like a celebrity afterwards.
The beer stunt was a snipe at one of his early portfolio companies that had come under internal investigation for claims of sexism in the workplace. But now four months later, Sacca himself has issued a mea culpa, confessing that he “personally contributed” to making the tech industry “inhospitable for women” after being accused in a New York Times article of inappropriately touching a woman’s face without her consent. (He later “disputed” the accusation.)
The apology from one of Silicon Valley’s most visible and powerful venture capitalists comes at a time when the tech industry is confronting its shameful legacy of sexist behaviour. It hasn’t been a secret that women in technology face sexism, especially in venture capital where women only make up 7% of partners. But until now, the status quo went for the most part unchallenged and the offenders operated with impunity.
That’s why the events of the last few months are so remarkable. The stories of venture capitalists asking women entrepreneurs for sex or touching them underneath the table during pitch meetings have multiplied as more and more women come forward. And it’s already having a profound effect.
In the last month, Uber’s CEO was asked to resign after a detailed investigation into harassment and bad behaviour among employees and managers at the $US69 billion startup. Another investor was forced out of his firm after initially denying accusations of sexual harassment from multiple women.
Dave McClure, the leader of a famous Silicon Valley startup accelerator 500 Startups, was removed from the day-to-day operations after women came forward with allegations of misconduct. In one case detailed by the New York Times, McClure told a woman that he wasn’t sure if he should hire her or hit on her.
Despite Silicon Valley being a place that’s promoted itself as a bastion of progressive ideals and meritocracy, each domino being tipped shows that the sexism problem that had rooted itself in the boy’s club of venture is worse and worse — and the old school boy’s club of Silicon Valley is being toppled as a result.
The problem with power
To be sure, some of the worst offenders have become “open secrets” among women entrepreneurs. There’s wiki pages that list venture capitalists and tech leaders who have been accused of inappropriate behaviour. And one startup accelerator, Y Combinator, keeps track of venture capitalists that have behaved badly — harassment or deal-wise — and cuts them out from ever getting a chance to invest as the startups leave its program.
But it’s tough to overstate the precarious path that must be navigated by any woman who wants to pursue the tech dream and create the next Facebook or Snapchat.
Without having a deep network in Silicon Valley or getting into one of the accelerators, it’s hard for women entrepreneurs to know who to avoid or have a support network to turn to if they feel like someone has crossed the line. Even if they do report it, they’re often silenced or told to sign non-disclosure agreements so people never find out.
Meanwhile, the men of Silicon Valley have continued to hold the power. Of the venture capitalist deal makers that fund the next generation of Facebooks, only 7% of the partners at top VC firms are women, according to a Crunchbase study.
And the money follows the same gendered lines. Women received $US1.5 billion in funding last year versus $US58.2 billion for men, according to PitchBook data. Just think, what kind of world-changing apps and tech products would we have today if women had the same opportunities and influence in the industry as men?
Make no mistake: venture capitalists control the check books that can fund next America’s innovation engine and too often it’s been an old boys club that makes deals in hot tub jam sessions or all-male ski trips.
The Trump effect
Yet the recent wave of women stepping forward after years of trying to shine light on the issue is finally crashing the power structure.
Venture firms are scrambling to institute formal policies around harassment. LinkedIn founder and Greylock partner, Reid Hoffman, made a public plea for firms to sign the Decency Pledge to acknowledge that the relationship between venture capitalists and entrepreneurs is the same as a manager and employee. (Yes, Silicon Valley is at the point where its dealmakers are finally publicly promising to be decent to women.)
The public apology from Sacca shows that no venture capitalist can go untouched, no matter how famous or how many amazing deals they have done. In some ways, it’s the opposite of the Trump effect: the President was elected despite being on tape saying lecherous things. To this day, he continues to call out reporters and women for their looks.
Yet the general revulsion to those antics has made Silicon Valley somehow look at its own secret shame. It’s harder for an investor to say they are outraged by Trump’s treatment of women when they’re protecting their own peers who have asked for sex or rubbed a woman’s thigh when they’re supposed to be making a business deal.
And while some argue that Trump’s behaviour has normalized this kind of locker-room talk towards women, in Silicon Valley, its greatest offenders are now getting exposed one-by-one. Venture firms have collapsed. Uber, the most valuable private tech startup, is undergoing a cultural reformation to save its company. Individuals like Sacca are making public apologies for their role in making tech “inhospitable” toward women. The Silicon Valley people and companies in powerful positions aren’t immune like Trump has been — and that’s only been more clear as more women entrepreneurs speak out against what’s been up until now Silicon Valley’s darkest secret.
There will be more dominoes that fall, and more “disruption,” as the industry finally comes to terms with this problem. But when the dust settles, you can be sure that the startups, products, and innovation coming from Silicon Valley will be stronger than ever.