After McClure revelations, 500 Startups LP Mitch Kapor says he'll ask for his money back
On Friday, the New York Times published a bombshell story naming several prominent venture capitalists accused of harassing women. Amongst those named were Chris Sacca, who days earlier had published a widely-praised blogpost about coming to realize his own failings (but that failed to mention that his realization was prompted by a call from the Times), and 500 Startups’ Dave McClure.
In response to the revelations about McClure, his partner at 500 startups Christine Tsai announced she had taken over as CEO of the firm…
Because of this, we made the decision a few months ago to change the leadership structure at 500. I took on the role of CEO, which involves directing the Management Team and overall day-to-day operations of 500.
Dave’s role has been limited to fulfilling his obligations to our investors as a General Partner. In addition, he’s been attending counseling to work on changing his perspectives and preventing his previous unacceptable behavior.
By her own admission, Tsai knew of McClure’s behavior months ago. By her own admission, McClure hasn’t been in charge of 500 Startups for months and is seeking “counseling”.
All of which was apparently news to the firm’s LPs. Hunter Walk of Homebrew confirmed that he only heard of McClure’s new role after the Times report was published.
So many of those first LPs were individuals making commitments based on relationships. I find out in a NYTimes article? Fuck that.— ✈️ to the ⛰ (@hunterwalk) July 1, 2017
LP Mitch Kapor confirmed he and Freada Kapor - two of the earliest LPs in the fund - were also not informed of the change in leadership at 500 Startups. To that end, and prompted by a tweet from Sarah Kunst who spoke on the record about McClure to the Times, Kapor said he plans to try to get their money back from 500 Startups.
A firm whose partners knew for months of a harasser in their midst but apparently told nobody. An admission of guilt and regret, but only after a humiliating press report. Angry LPs demanding their money back. The echoes of the Binary Capital scandal couldn’t be clearer.
The question is, what happens now? Will more LPs follow the Kapors’ lead and demand their money back? Will McClure step down as a GP? If so, will that trigger a key man clause which will allow more LPs to withdraw funds?
We’ve asked Tsai for comment and will update if and when we hear more.