Silicon Valley says it’s committed to improving diversity, but high-profile male executives accused of sexual misconduct are getting second chances. Some advocates are wondering why.

BuzzFeed News; Getty Images

In September 2015, Uber brought thousands of employees to Las Vegas for a global all-hands retreat that had all the hallmarks of its infamous hard-charging culture: drug-fueled parties, a private performance from Beyoncé, and speeches from CEO Travis Kalanick and other executives. One evening during a group outing to a nightclub attended by a handful of employees from Uber's Los Angeles office, the company's LA general manager, Eyal Gutentag, allegedly assaulted a female subordinate. According to three people who saw the incident, a visibly intoxicated Gutentag approached the woman from behind, pulled her hair, and groped one of her breasts and buttocks. She screamed and quickly separated herself, leading multiple employees to report the incident to Uber’s human resources department. The company put Gutentag on leave and terminated him within a week. Four months later he had a new job. In January 2016, HopSkipDrive, a ride-hailing service for kids, hired Gutentag as its chief operations officer, touting his “significant operational expertise” and cultural fit. Later that year, according to his LinkedIn, Gutentag left to join ZipRecruiter, a burgeoning employment job site that’s valued at more than a billion dollars, where he is now chief marketing officer. That Gutentag was able to level up across multiple companies in the aftermath of sexual misconduct allegations for which he was terminated astounded at least one former Uber coworker. That person, who witnessed the incident and spoke to BuzzFeed News on the condition of anonymity, said it was “disheartening” that the alleged sexual battery, which was reported in the New York Times in February 2017 without Gutentag’s name, was quickly forgotten and had seemingly few consequences. “It’s appalling that’s not enough to end his career as a leader,” the person said. Gutentag and Uber declined to comment for this story. HopSkipDrive and ZipRecruiter both declined to comment on an individual employee’s background. By exposing men accused of sexual misconduct, the #MeToo movement has derailed careers in entertainment, higher education, and politics, but its impact in the technology industry has been less pronounced. A number of men who have been accused of and admitted to sexual misconduct have reemerged on the scene — sometimes within months of allegations surfacing in the public. Many have returned with new startups or venture funds backed by investors well-aware of their past behavior.

“We have not repaired the damage ... and just as importantly, we haven't figured out how to prevent it from happening again.”

In tech, the reentry of alleged perpetrators of sexual misconduct raises questions about the real consequences of bad behavior and a culture willing to look the other way when there's money to be made on a proven winner. These comebacks also shed light on the practices in the highly competitive tech industry — from the use of nondisparagement agreements to the repeat backing of so-called flawed geniuses — that protect those accused of past sexual misconduct. “I don't think any of us has done the work to welcome accused harassers back into our community,” said Ellen Pao, who lost a high-profile gender discrimination case against venture firm Kleiner Perkins Caufield & Byers in 2015 and has since become an advocate for diversity in tech. “We have not repaired the damage, many of them have not acknowledged the harm that they've done, and just as importantly, we haven't figured out how to prevent it from happening again.” Though some men including Binary Capital’s Justin Caldbeck, whose alleged harassment of women entrepreneurs kicked off a wave of reporting on sexual misconduct in tech in 2017, remain cut off from the industry, there have been multiple comebacks of high-profile tech executives this year. Mike Cagney, the former CEO of Social Finance (SoFi) who left in September 2017 after engaging in multiple inappropriate relationships with employees and allegedly overseeing a company culture of rampant sexual misconduct, announced in February that his new home equity startup has secured a total of $120 million in funding. One former Google executive, whose advances on a job candidate at Burning Man were reported late last year, is now the chief technology officer at a startup less than four months after leaving the search and advertising giant.

While worrying for some in the industry, these comebacks are hardly surprising, said Brittany Laughlin, a partner at Lattice Ventures who’s written about improving women's representation in tech. The movement to expose predatory behavior was never focused on punishment, she added, and you can’t stop someone from working again. For all the talk of tech being a meritocracy, Silicon Valley has a long and storied history of protecting its own, bad behavior be damned. “Bad actors who've had success in the past, even at the expense of breaking the rules, would better fit the tech [way of] thinking than someone who's never built a company before or run a fund,” said Laughlin.

“I don’t think these men have repented or made any amends.”

Six women leaders in the tech industry who spoke to BuzzFeed News acknowledged that perpetrators of sexual misconduct should be given a chance to rebuild their careers once they’ve faced the consequences and made amends. Defining those consequences, however, is difficult, they said, especially when transgressions can vary so widely. “There are echoes on the criminal justice side that people are better than the worst thing they’ve ever done,” said Tracy Chou, the CEO of Block Party, a company trying to solve abuse and harassment online. “But what’s frustrating is that I don’t think these men have repented or made any amends.” That frustration was shared by many of the women, who felt that some of the tech leaders now making comebacks don’t seem genuinely repentant and lack self-recognition for what they’ve done or who they’ve hurt. Chou suggested some of the accused men making comebacks are paying lip service to diversity and inclusion because of the optics and to “brandwash” their names. In one instance, a man with public allegations of sexual misconduct offered to donate $5 million to a nonprofit focused on improving diversity that one of the women was advising, but only on the condition that his gift be made public. “It’s tricky there, because I don’t know what the right test would be,” Chou said. Jess Ladd, the CEO of Callisto, a nonprofit creating technology to detect repeat perpetrators of professional sexual coercion and sexual assault, said accountability should take into account three considerations: how long it took for a wronged party to feel a sense of resolution, whether there was adequate punishment for an offender to affect a change in their behavior, and if a punishment signals a deterrent to other would-be offenders. “Does a comeback after two years or less after a public outing seem like an effective deterrent to stop other people in the community from engaging in this behavior?” she said. “Absolutely not.”

Bloomberg / Getty Images Former Social Finance CEO Mike Cagney

“Tolerant of Brilliant Jerks” At LendIt, a financial technology conference in San Francisco earlier this month, Sallie Krawcheck, a Wall Street veteran and the CEO of Ellevest, took hundreds of people in the audience to task for not doing enough to achieve gender equality. She implored the leaders in the crowd to give more women a chance. “Whatever we’re doing now — whatever you’re doing for your company, like your gender diversity group or your Rooney Rule or having powerful women come in to speak to them — has not worked,” she said, before concluding her talk to rounds of hearty applause. Two minutes later, Mike Cagney took the stage. After founding SoFi, an online personal finance company now valued at around $4.5 billion, Cagney departed in late 2017 following two relationships with subordinates — one of which he lied about to his board — and multiple sexual harassment lawsuits in which he was accused of “empowering other managers to engage in sexual conduct in the workplace.” (SoFi previously denied some of the allegations.) Cagney spent his 20-minute keynote speech pitching Figure, his new blockchain startup. He too left the stage to applause. “Our industry has become tolerant of a ‘brilliant jerks’ culture,” said Cowboy Ventures partner Aileen Lee, who attributed the comebacks in part to tech’s idolization of flawed but brilliant executives. “Imagine if there was a woman who repeatedly treated men with disrespect ... Would people say, ‘She’s just like that — but she’s so smart and we love her, is it really that big a deal?’ Probably not.”

Steve Jennings Aileen Lee of Cowboy Ventures

Peter Renton, one of the organizers of the LendIt conference said that his team spoke with Cagney before the event and "were comfortable" that he "had learned his lessons." LendIt felt his new company was "groundbreaking," Renton added, noting that the speech "has been the most downloaded video so far out of all 14 keynote sessions." Cagney declined to speak for this story, but said in other interviews that he’s learned from his past and changed how he runs his new company. "We have a very clear adherence to a ‘no-asshole’ policy," Cagney said of Figure to Bloomberg. Figure, which Cagney founded four months after leaving SoFi, now has more than 100 employees and four women cofounders as highlighted by Bloomberg. More telling, however, is the $120 million it's raised in its short existence, signaling that investors, including ones who previously backed SoFi, were comfortable supporting Cagney. Baseline Ventures' Steve Anderson and DCM Ventures partner David Chao, who both invested in SoFi and now back Figure, did not respond to requests for comment. “The tech industry also doesn't wait for anyone to ask for permission,” said Laughlin. “Can't get hired by a big company because of your reputation? Start your own.”

“Can't get hired by a big company because of your reputation? Start your own.”

Cagney’s reappearance is by no means unique. In 2015, Google invested in Android creator Andy Rubin’s company, Playground Global, even though it had pushed him out amid sexual misconduct allegations. As part of his departure, Rubin — who was reportedly accused by another Google employee of coercing her to perform a sex act on him — received a $90 million exit package. Rubin later called the allegations against him “false” and “part of a smear campaign.” Last December, Recode reported that Shervin Pishevar, a venture capitalist whom multiple women entrepreneurs accused of using his position of power to pursue nonconsensual physical encounters in late 2017, was back as an executive of Bolt Mobility, an electric scooter startup. While his representatives denied the 2017 stories at the time and said they were “confident that these anecdotes will be shown to be untrue,” Pishevar retreated from public view, while his business partner quietly wound down their venture firm, Sherpa Capital without him. A July 2018 Florida business filing for the Miami Beach-based Bolt, however, listed Pishevar as the startup’s sole officer and director. A spokesperson for Bolt disputed the document and said that Pishevar was an investor in the company but not an officer. The startup, the spokesperson added, is "led by several female executives" including co-CEO Bita Sarah Haynes, Pishevar's sister. Pishevar did not respond to requests for comment. For Lee, venture capitalists who invest in startups are at least partially responsible for holding the entrepreneurs they fund accountable for their behavior. “I believe people can change and should be given second chances,” said Lee. “But it’s frustrating to watch investors go out of their way to give men who’ve done bad things in tech huge second chances, while they seem to have made much less effort to give other people first chances.”

Steve Jennings Former Draper Fisher Jurvetson Partner Steve Jurvetson

From a Misconduct Investigation to a $200 Million Fund In November 2017 Steve Jurvetson left his role at venture capital outfit Draper Fisher Jurvetson after the firm conducted an internal investigation into stories of inappropriate relationships with women entrepreneurs. Jurvetson said in a February interview with the Wall Street Journal that he was never told of the findings of the investigation, which reportedly found that he did not tell the truth when confronted with the allegations, and argued that the allegations had come about because he was bad at dating and “insecure” with women. Two months ago, he debuted a new firm, Future Ventures, with former DFJ colleague Maryanna Saenko and some $200 million in backing. Jurvetson did not respond to a request for comment. A spokesperson for DFJ declined to comment beyond saying that none of the partners at the firm became investors in their former partner's new fund. Keri Kukral, one of the women who had a relationship with Jurvetson and who wrote an October 2017 Facebook post about “predatory behavior,” told BuzzFeed News that she wished the article by the Journal had been “more respectful” to the women with whom the investor had had extramarital affairs. In the interview with the Journal, Jurvetson said, “I managed to really hurt myself and hurt others it appears, by not I guess, communicating clearly when I didn’t love someone and was moving on.” “I wish that in the process, Steve would not have made it look like we were just disgruntled ex-lovers,” Kukral said, noting that she believed he had partly escaped public scrutiny for some of the allegations against him. “I wish that he would take some more true responsibility for what happened.” Kukral said the industry "shouldn't be giving people passes based on their talent." At the same time, she said, there should be some room for people like Jurvetson to be redeemed. “It would be a loss for him to not be able to contribute the way that he had in the past,” she said. Want us to report on more stories like this? Join us as a BuzzFeed News member. Dave McClure, cofounder of early-stage venture firm 500 Startups, is also starting a new fund after numerous women entrepreneurs accused him of unwanted advances. According to a source familiar with the matter, the new fund, named Practical Venture Capital, will focus on “micro venture capital” or small checks to early-stage startups and potentially invest in other global venture firms as reported by Bloomberg News. McClure, who penned a July 2017 blog post titled “I’m A Creep. I’m Sorry.” to apologize for his actions, declined to comment for this story. But as he looks to reenter the world of tech investing, he seems to be performing triage on his image. A review of Internet Archive records by BuzzFeed News show that McClure deleted his apology blog post around December of last year. Women who have worked as investors and spoke to BuzzFeed News say the community’s efforts to change how it treats women have mostly rung hollow. There have been diversity pledges and hashtag movements, said Chou, but “the interest has been in looking good, and not turning that into accountability.” Among the women entrepreneurs who spoke with BuzzFeed News, there was an agreement that little will change in venture capital until there is pressure from limited partners, organizations including university endowments and public pension funds that invest in venture firms. But when fund managers of limited partners are tasked with generating the largest possible returns for their institutions, there is often little financial incentive to call out funds for inequality or misconduct, Pao and others said. Fred Destin, a one-time partner at VC firm Accel and Atlas Venture, disagreed. Having come back from allegations in 2017 in which a startup founder alleged inappropriate touching and advances toward her in 2013 while he was at Atlas, he now runs a $50 million fund at Stride.VC with partner Harry Stebbings and said his backers took the matter “very seriously.” “There is amongst the [limited partner] community a certain level of anxiety about anything that may damage their reputation,” Destin said, noting that every limited partner in his fund quizzed him about the incident and that some potential investors did not put money in because of it. Destin told BuzzFeed News that he suspects his investors gave him a second chance because of his honesty and attempts to learn and improve himself. He said he apologized to the woman entrepreneur, acknowledged he “lacked awareness,” and attended therapy. “There’s no other way than to be ruthlessly honest about what you did and what you’re trying to do to fix it, then people will feel if you’re genuine or not,” he said. Three limited partners in Destin’s Stride.VC did not return requests for comment. For Pao, the head of tech diversity initiative Project Include, the lack of clear accountability has created an ecosystem that permits bad behavior without consequence. “Limited partners fund venture capitalists and don't seem to be calling them out for their harassment, policy failures, and poor management,” she said. “VCs then fund founders and don't call them out for their bad behavior. And founders and VCs then do whatever they want driven by greed not good.”

MIT Media Lab / Via media.mit.edu Former Google X Director Rich DeVaul