×

Fired Sequoia partner will forfeit board seats: Source

Michael Goguen, the Sequoia Capital partner who was fired after a sexual abuse lawsuit was filed against him, will have his board seats transferred to other members of the firm, according to a source familiar with the matter.

A Sequoia spokesperson said the firm first learned of the claims on Thursday and promptly dismissed Goguen, who joined the Menlo Park, California-based firm in 1996.

Goguen sits on the boards of about 10 companies, including online lender Elevate Credit, which was on file to go public but postponed its offering in January as the stock market plunged. His only public board seat was at Infoblox, though he stepped down as a director there after the company's annual meeting in December, a spokesperson said.

A representative from Elevate did not immediately respond to a request for comment.

Read MoreVenture capital confidence rebounds in Q4

Sequoia holds the rights to disperse the seats to other partners, said the source, who asked not to be named because of the sensitivity of the case.

The suit against Goguen was brought to light in a story from TechCrunch on Friday night. It was filed on March 8, by Amber Laurel Baptiste at the California Superior Court in San Mateo.

Baptiste claims she was abused "sexually, physically and emotionally for over 13 years." As compensation, Goguen had agreed to pay Baptiste $40 million, but only paid the first $10 million, the suit says.

While Goguen has not been proven guilty and plans to fight the case, Sequoia fired him after learning of the $40 million settlement.

In a statement sent by his attorney Diane Doolittle, Goguen said he will file a cross complaint on Monday "alleging extortion," with evidence that the plaintiff "pursued me romantically and professed her love, respect and appreciation for my kind and compassionate treatment of her." (See full statement below.)

In the suit against Goguen, Baptiste says she was brought to the U.S. as a victim of sex trafficking at the age of 15, and met the investor in 2001. She claims that Goguen's control over her lasted 12 years, and that she was "relying on his promise that he would help her break free of the human traffickers who held her in perpetual debt."

Here's Goguen's response:

These horrific allegations against me come at the end of a 10+ year romantic relationship that ended badly. Not surprisingly, the complaint is filled with every horrible buzzword you could throw at someone in today's society to destroy their reputation.

At my direction, a cross compliant will be filed with the court first thing Monday morning alleging extortion. It will contain an enormous amount of evidence, including messages that span years and show that she pursued me romantically and professed her love, respect and appreciation for my kind and compassionate treatment of her.

This matter is purely personal and has no connection to Sequoia. My departure from there allows me to focus with full force on clearing my name and vigorously pursuing justice - starting on Monday morning with the filing of my cross complaint alleging extortion.

Regardless of the outcome, the case may reignite the issue of the treatment of women in technology — particularly in venture capital, where they're significantly outnumbered by men. According to a study from Babson College, only 6 percent of investing partners at VC firms are women.

Sequoia is a legendary firm in Silicon Valley, having backed Cisco, Apple, Google, Yahoo, LinkedIn and WhatsApp, among many other billion-dollar companies.

Sequoia doesn't have a single female partner. Chairman Michael Moritz made headlines in December when he told Bloomberg TV that while the firm is looking hard for women to hire, "what we're not prepared to do is to lower our standards."

Following a heavy dose of criticism, Moritz amended his comments by saying that there are many "remarkable women who would flourish in the venture business," and in terms of hiring, "we need to do better."

Last year, Kleiner Perkins Caufield & Byers wrapped up a multi-year sexual harrassment lawsuit from former employee Ellen Pao. The firm, which famously co-invested with Sequoia in Google, won the case but not before numerous embarrassing practices were made public.