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Binary Capital Has Suspended Operations Following Sexual Harassment Allegations
Venture capital firm Binary Capital has suspended operations of its two funds after allegations of sexual harassment were made against its co-founder by numerous female startup executives in Silicon Valley, Bloomberg reports.
A source tells Bloomberg that Binary’s limited partners voted this week “to effectively shutter the firm’s most recent fund,” which had yet to invest any of the $175 million it had raised last year. The partners then decided to suspend its $125-million first fund as well, according to Bloomberg.
Binary co-founder Justin Caldbeck took an indefinite leave of absence last week after a half-dozen women accused him of sexual harassment and making unwanted advances. After at first saying that he “strongly” denied the allegations, Caldbeck later sent a letter to TechCrunch in which he apologized for his behavior.
The allegations against Caldbeck were first reported by The Information.
Among the women alleging sexual harassment by Caldbeck, include Susan Ho and Leiti Hsu, co-founders of Journy, a travel planning and booking service; and Niniane Wang, co-creator of Google Desktop and former CTO of Minted, according to TechCrunch. Three other women declined to give their names “for fear of retaliation from the VC — and because of wider concerns they might suffer a backlash from men in the industry who don’t see inappropriate advances as a problem,” TechCrunch reports.
Meanwhile, Bloomberg reports that Jonathan Teo, Binary’s other co-founder, has offered the firm’s investors his resignation. In a letter obtained by Bloomberg, Teo says that if “investor groups believe that my removal serves the best interests of the investors, I will respectfully resign.”
Teo also wrote a note on Facebook asking for forgiveness after acknowledging that he had “heard rumors about [Caldbeck] from the past” before partnering with him. Teo adds that Caldbeck “was getting married that summer and I had full belief that he was turning over a new leaf.”
I made a big mistake in that from a professional context. The corporate world is unforgiving for judgment errors such as this. And I truly understand it. In the second year of our partnership, I had learned of some bad behavior from my partner, but it was evidenced to me that it happened prior to his time at Binary. And I kept my word that his past is the past and I would put it behind me. Even if he had kept it from me.
The law firm Gibson Dunn & Crutcher LLP is investigating the allegations against Caldbeck.