The last remaining partner of Binary Capital — the Silicon Valley VC firm that has been plunged into chaos recently following a sexual harassment scandal — is blaming a corrupt and sensationalist press, and leaks, for the near collapse of his firm.
In two angry emails sent Saturday, copies of which were obtained by SiliconBeat, Binary partner and co-founder Jonathan Teo also attacked a portfolio company that has attempted to cut ties with the firm, while also threatening others considering doing the same. And Teo, who has offered to resign, blasted what he deemed a “moronic” demand that his investors replace him with a female partner.
“The news we read and have access to is a problem,” Teo wrote. “Media has been corrupted. The voice of many have been diluted by the agendas of a few. My offer of resignation was made to quell a news cycle that we are almost positive was exacerbated by a leak from someone in our investor base that had an agenda not in the best interest of the entrepreneurs we work with.”
Axios first reported the contents of the emails.
The rant follows a firestorm that started late last month when six women came forward and accused Binary partner co-founder Justin Caldbeck of sexually harassing them. Caldbeck quickly apologized and resigned. Teo and a third partner followed suit, though they were not accused of harassing women.
Teo’s offer of resignation has not yet been formally accepted, but for now, a group of Binary investors, known as an LPAC, will determine the firm’s fate going forward. Meanwhile, Teo says he’s working on finding a new partner, whom he acknowledges could replace him.
In one of the emails, Teo wrote his offer of resignation “quelled the cycle by giving the blunt-tooled media activists what they wanted,” and assures that even though he’s willing to step down, “I do not have anything to hide.”
Then he turned his sights on some of his portfolio companies, particularly San Francisco-based automated messaging company Assist, which has stated that it wants to cut ties with Binary by buying back its equity from the firm. Without naming names, Teo attacked Assist and warned other companies against doing the same.
“It is dishonorable,” Teo wrote. “And it is opportunistic grandstanding. It will hurt the perception of your integrity and it will hurt your ability to raise capital down the line. No investor seeks out that risk.”
Teo wrote that just one entrepreneur has asked to cut ties in this way, and two others have asked to have discussions about the possibility.
Assist gave Binary an alternative option — the company said it would reconsider cutting ties if the investors hired a female investing partner to head the firm. Teo blasted that demand as “moronic.”
“As for those who are moronic enough to ask for a general partner replacement as long as it is a woman, please question their motives,” he wrote. “We must choose the best person, male or female. But that net must be cast wide.”
Teo also attempted to reassure investors that the Binary portfolio remains strong — despite the fact that new investments have been halted — a number of Binary companies are profitable and one recently filed for an IPO, he wrote. Furthermore, seven of the firm’s 18 portfolio companies are run by women, he added. And Teo wrote he is putting together a set of metrics to allow Binary to measure “equality of access” within the firm and its portfolio.
“I’m hopeful we all come out of this stronger than before,” he wrote. “I am angry about this situation. I am angry that women have felt hurt. I am angry that many have been hurt. That we have allowed this hurting to go on for so long is inexcusable, and it is now changing. Fast. This situation has ripped apart something I have built with an intention to bring good into the world. I let it get ruined because of poor choices in people. I regret that and won’t forget that lesson.”
Photo: Screen shot from Jonathan Teo’s LinkedIn profile.
Tags: Binary Capital, Jonathan Teo, Justin Caldbeck, sexual harassment