New bill could stop sexual harassment by venture capitalists

Imagine wanting to build up your business. You need to gain investors, but some of the investors only want to invest in your company if you’re willing to give them a little something on the side.

As a founder of a company, you’ll have to talk to a number of people to gain the funding you require. Venture capitalists often provide funding to start ups, but there is one concern that has never been addressed before: Sexual harassment between the investors and founders.

Maybe an investor wants to go on a date, or perhaps one wants you to send naked photos. Whatever the issue is, it’s unacceptable. In the past, there were few steps you could take to stop this harassment because venture capitalists weren’t held to the same standards as other industry professionals. That may not be the case for much longer in California.

Today, California’s legislators want to address that shortcoming by creating a bill that prohibits investors from sexually harassing founders. All the bill has to do is add “investors” to a list of professionals who are able to be held liable for harassment. The state already holds a number of professionals to that standard, some of which include teachers, landlords and medical providers.

Venture investors are primarily male, and female founders make up around seven percent of venture-backed companies. Dozens of women have talked about mistreatment in the industry as they sought funding. The new law would force venture capitalists to act professionally or face the risk of being sued for financial compensation by founding business owners.

Source: Bloomberg Technology, “California Looks to Outlaw Sexual Harassment by VCs,” Lizette Chapman, Aug. 28, 2017