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A Silicon Valley VC firm is imploding after a partner was accused of sexual harassment

  • Binary Capital partner Justin Caldbeck resigned after The Information reported that Caldbeck had made inappropriate advances toward six businesswomen.
  • Caldbeck initially denied the allegations but later issued an apology in a statement to Axios.
  • Matt Mazzeo has also left the firm, leaving just one managing partner remaining, a letter said.

A venture capital firm lost two key partners after one partner was accused of sexual harassment.

Binary Capital partner Justin Caldbeck has resigned, according to a letter sent to limited partners from Jonathan Teo, Binary's co-founder. Caldbeck was thrust into the spotlight last week after The Information reported that Caldbeck had made inappropriate advances toward six businesswomen.

Caldbeck tried to sleep with one woman he was informally recruiting for a tech job, the woman told The Information. Another woman said Caldbeck sent explicit text messages during the course of an ongoing business relationship. Caldbeck denied the reports in a statement to The Information, saying he has "always enjoyed respectful relationships with female founders, business partners and investors."

But later, in a statement to Axios, Caldbeck directed an apology "to those women who I've made feel uncomfortable in any way, at any time."

Matt Mazzeo has also left the firm, leaving just one managing partner remaining, the letter said. The San Francisco-based firm invests in early-stage consumer-facing technologies like smartphone printer Prynt, and was set to close on upwards of $75 million in new capital this month, according to Axios.

Here's the full letter:

I trusted my partner and it is clear that I shouldn't have. The predatory behavior Justin has been accused of is deplorable, and there will be zero tolerance at our firm of any conduct that is demeaning to women.

Effective immediately, Justin has resigned from Binary Capital. He will have no further role at the firm and I will be the sole managing partner. Matt Mazzeo has also announced his resignation. We have retained Orin Snyder and Michele Maryott of Gibson Dunn to conduct an independent internal investigation of this matter. It is important we understand how these circumstances could have been avoided and how we will prevent this kind of behavior from occurring in the future. We look forward to reviewing and implementing the appropriate recommendations based on their findings.

We recognize that power dynamics in the business world can, and often do, place women in difficult or hostile situations. As I write this today, I regret that I did not insist on Justin's immediate exit after his behavior was revealed. I would also like to apologize for our initial response to these allegations. It is clear to me now that I was misled by a partner and friend.

In venture capital, we pride ourselves on being astute stewards of talent and resources. We all aim to support the ambitions of the entrepreneurs we support and invest alongside.

Many of our most important investors and entrepreneurs are women. I helped found Binary Capital with the mission of creating a more authentic connection and access for all. Moving forward, we will redouble our efforts to promote and ensure gender equality in all of our endeavors as we remain focused on our fund and investors.

While we are disappointed with this outcome, we are committed to handling this transition smoothly and properly. We couldn't have achieved our success without you and we are deeply grateful for your support. We have an outstanding team at Binary and we look forward to working together in the future as we continue to pursue our vision to enable people to more authentically connect with one another and the world around them.

Jonathan Teo

— With reporting by CNBC's Sally Shin

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