California-based early-stage seed fund 500 Startups is under the scanner. Co-founder Dave McClure has stepped back from operational functions as the Founding Partner, following allegations of sexual harassment.
Talking about the same, Christine Tsai, Managing Partner at 500 Startups in a blogpost said, “In recent months, we found out that my co-founder Dave McClure had inappropriate interactions with women in the tech community. His behavior was unacceptable and not reflective of 500’s culture and values. I sincerely apologize for the choices he made and the pain and stress they’ve caused people. But apologies aren’t enough without meaningful actions and change.”
Tsai also added that due to these findings the fund has decided 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.” Further adding, “Dave’s role has been limited to fulfilling his obligations to our investors as a General Partner. In addition, he’s been attending counselling to work on changing his perspectives and preventing his previous unacceptable behavior.”
This development was first reported by The New York Times. The report stated that McClure’s departure came after over two dozen women working in tech startups spoke to the publication. The report further added that the women talked ‘about being sexually harassed. 10 of them named the investors involved, often providing corroborating messages and emails, and pointed to high-profile venture capitalists such as Chris Sacca of Lowercase Capital and Dave McClure of 500 Startups.’
Talking to the publication about the same, 500 Startups confirmed that Dave McClure “was no longer in charge of day-to-day operations after an internal investigation.”
Further adding, “After being made aware of instances of Dave having inappropriate behavior with women in the tech community, we have been making changes internally.” 500 Startups also stated that “He (Dave McClure) recognizes he has made mistakes and has been going through counselling to work on addressing changes in his previous unacceptable behavior.”
500 Startups was founded in 2010 by PayPal & Google alums. The 500 Startups accelerator has accelerated over 1,500 startups across 30 countries with a series of micro-funds being launched. It has made more than 50 investments in India.
500 Startups has been active in India and invests in about 15 startups a year with the investment ranging from $50-500K. In India, it has invested in about 50 startups including MyChild, POPxo, Origa Leasing, Tripoto, Quickli, LafaLafa, OnlineTyari, Qustn, TradeBriefs, Instamojo, Sheroes.in, gazeMetrix, and ZipDial. It has also backed price comparison startup PriceBaba, through its India-based fund StartupWallah.
In January 2017, the fund had deferred its plans to raise a $25 Mn India-focussed fund, called 500 Kulfi. Taxation and regulatory concerns were given as the reasons for holding off the fund raise.