According to the newsletter put out this morning by Axios’s Dan Primack, 500 Startups didn’t bother telling its limited partners or employees about the sexual harassment allegations against founder Dave McClure. They found out the way the rest of us did—through the recent New York Times article that revealed McClure had allegedly made advances toward Proday founder Sarah Kunst.
Axios obtained the recording of a call between current 500 Startups CEO Christine Tsai and the firm’s limited partners, which took place a few days after the Times story was published. Turns out the company was aware of allegations against McClure—presumably those brought forward by Kunst—as early as last year:
In late 2016, the management team was made aware of inappropriate comments that Dave had made to a potential investment team candidate, prior to her entering a formal interview process back in 2014. At the time we believed we addressed it appropriately with Dave. In April of this year we were informed of an incident involving Dave and an employee. Upon investigation we felt we needed to take significant action.
Tsai claimed that “the only person who had the legal authority to make Dave resign was Dave himself,” which is why the firm only requested that he scale back his responsibilities. When McClure did so in May, 500 Startups conveyed the news to its employees—albeit not to its partners—but didn’t reveal what had prompted it. “We did not disclose the reason for this transition to respect privacy,” Tsai said. (McClure eventually fessed to being a “creep” and resigned altogether, but only after the Times article.)
Here’s something companies should probably keep in mind going forward: Employees have a right to know if their boss is making unwanted advances toward fellow employees.PM