The powerful hold of Silicon Valley's venture capital priesthood

Nov 14, 2017

Yesterday one of the most prominent venture capital firms in Silicon Valley had a name partner, Steve Jurvetson, resign amid a sexual harassment investigation. Silicon Valley doesn't exactly have a stellar reputation when it comes to gender issues, and it joins the list of industries under scrutiny in the wake of sexual misconduct allegations against Harvey Weinstein. Marketplace host Kai Ryssdal spoke with Molly Wood, host of Marketplace Tech, about the importance of venture capital in the tech ecosystem and how that affects startups run by women.

Kai Ryssdal: The thing about Jurvetson and this news, is, if you think down a couple of layers, the power that venture capital has in shaping how Silicon Valley and its companies get formed right?

Molly Wood: Yeah, it's a very unusual ecosystem. And you've got this pretty small group out there almost like a priesthood. It's very secretive and they're very powerful and they control a lot of money.

Ryssdal: And very male, much like the priesthood.

Wood: And it's very male, exactly. And it's almost exclusively white men. They absolutely have a tendency to fund white men who look and act and think just like them. And so you start to get an entire ecosystem that starts with the guys at the top. And you know there are horror stories coming out every day about female founders talking about how many meetings they went to where they got told no. Even if they didn't get sexually harassed, most of the time they also got told no. And very often unfortunately they had both.

Ryssdal: You had Jurvetson on Tech, right?

Wood: We did. So we interviewed Steve Jurvetson, and what's so interesting is that, you know, as these conversations started to heat up in the Valley, you think a lot about the people who are not in the room. The people who never got that funding. And there's one thing that Jurvetson said that now is really sticking with me about who's not in the room.

Jurveston: What's not reported because they're invisible are the folks who get nothing. There is actually a bunch of really exciting business ideas that wither on the vine. Certainly a lot of Google competitors, I can tell you that for certain.

Ryssdal: The thesis here being that women are underrepresented in tech in part because they don't get VC money.

Wood: Yeah. And Steve Jurvetson essentially said to me in that interview, "Look, every venture capitalist comes in and spends their first five or seven or 10 years pulling from their Rolodex." And if you play that all the way forward, and you think about the impact of a sixth of the world's capital being invested out of Sand Hill Road, if you have rot there, you can see how profoundly systemic it is, and that just makes it really hard to root out.

Ryssdal: Sand Hill Road, of course, being the place in Menlo Park where all the big VC firms, most of them anyway, the big ones, are located. Let me ask you this though, and take this from VC to the larger bro culture in Silicon Valley: Here we have Weinstein, and we have issues in public radio and now we have them in politics. Where are the stories coming out of Silicon Valley about harassment and abuse?

Wood: Silicon Valley, in many ways in the last decade or so, became the new Wall Street. So a lot of people came here to get rich quick, and whenever you have a culture like that, you're going to get a skewed set of incentives. And then, you have this other factor, which is, you know, I actually, for Marketplace Tech tomorrow, talk to Ellen Pao, who was a partner at Kleiner Perkins, you know, was sort of the Eve in the origin story of unraveling sexual harassment in Silicon Valley. And one of the things she said is that you do have this extremely small set of people with a lot of power making a lot of the decisions about who gets funded and what companies are born.

Ryssdal: Without wanting to presage the news in any way, do you doubt that there will be stories coming out of Silicon Valley about harassment and abuse as this trend that we are now seeing in other industries continues?

Wood: Oh no, in fact it makes me nervous about anyone I interview, to be honest. Because I suspect there are unquestionably going to be more, because, you know, we've heard the words "open secret" bandied around. It is an open secret that there's a lot about the Valley that is very bad. 

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