Technology

Silicon Valley’s Bad Culture Starts With Venture Capitalists

It could end there, too.

Ellen Pao
Ellen Pao at San Francisco Superior Court Civic Center Courthouse with a member of her legal team on March 25, 2015.

Stephen Lam/Reuters

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Every time men in the tech industry attempt to paint gender disparities and sexism in Silicon Valley as an unreal problem—or even, as ex-Google engineer and new alt-right hero James Damore has put it, the result of biological differences between men and women—we seem get another real-life example of just how real it is.

In an excerpt from her new book in the Cut, Ellen Pao recounts her time at one of the tech industry’s most prestigious venture capital firms, offering a powerful, jarring look at exactly how the mechanics of Silicon Valley’s everyday sexism work. And as the tech-culture crisis over how companies like Google, Uber, and Facebook treat women and underrepresented minorities continues to shake the world’s most profitable industry, Pao’s account of her historic lawsuit against the investment firm points to one reason why this discriminatory culture, despite hundreds of millions of dollars spent to rectify it, hasn’t changed in the decade following her trial: The money men reflect it and fund it from the ground up.

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If you follow the money that has backed Silicon Valley’s biggest successes, the venture capitalists behind those investments often reek with just as much sexism—often more—as the companies they fund. Take Uber, for example. If Uber’s early investors told the company’s former CEO Travis Kalanick at the beginning that he needed to build a company that was diverse and a safe place for women, it’s unlikely the massively funded ride-hailing startup would be in the mess it’s in today, with allegations of attempting to discredit a rape victim, as well as a culture of widespread sexual harassment at the company.

Pao’s story, however, tells of an investment culture in Silicon Valley that would be unlikely to ever caution a CEO to respect, value, and hire female employees. She opens with a scene that may have felt familiar to many women in male-dominated industries. On a plane in which Pao was the only woman among her all-male colleagues and bosses, a CEO who was also travelling with them started talking about porn and asked the other men on the plane what type of sex workers they prefer. “Somehow, I got the distinct vibe that the group couldn’t wait to ditch me,” Pao writes, remembering how she left the group of men right after they deplaned. She describes in detail how men at the company would leave her out of meetings, take male-only trips, steal women’s ideas, and how one colleague became routinely hostile after she decided to stop dating him once she learned he had lied about his marriage.

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Venture capitalists advise the companies they invest in. They want to see them succeed and grow. And if a startup is acting stupidly—like by, say, writing a playful firmwide letter to employees advising them to only have sex on a company retreat if both people agree to it, as Uber’s former CEO Travis Kalanick did—an investor could object and even threaten future funding. If a company has abysmal diversity numbers, its VC backers could direct the company to fix them.

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But venture capitalists generally haven’t done that. Instead, they’ve peddled the same sexist behavior that’s becoming emblematic of Silicon Valley. Prominent venture capitalist Justin Caldbeck stepped down from his position at Binary Capital earlier this year after six women accused him of making sexual advances in the context of trying to make business deals, often leveraging his power to make or break their startups. Another startup founder, Sarah Kunst, reported to the New York Times that when she was considering a job at 500 Startups in 2014, the founder of the venture capital fund, Dave McClure, wrote her a Facebook message that read, “I was getting confused figuring out whether to hire you or hit on you.” Last year, women-led startups got just 2.19 percent of venture capital funding, according to PitchBook.

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Pao lost her sexual discrimination case, lacking the deep pockets of the venture capital firm she was suing, which was able to outspend her and invest in media outreach that worked to paint Pao as a greedy employee. Still, Pao says she’s hopeful that more women are going public, many of whom are inspired by her case. While it’s certainly less safe for men in tech to discriminate and harass women than it was even last year, the recent memo from Damore that went viral at Google and saturated the press shows that many men in tech who think women don’t deserve the same treatment feel emboldened to share those views.

More than ever, it’s up to the people in charge, the CEOs and the VCs, most of whom are men, to challenge the dominant culture of sexism in Silicon Valley, even if it that culture is in part to thank for their own success.

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