Embattled venture capitalist
Justin Caldbeck (pictured) is suing his former co-Binary Capital founder Jonathan Teo, alleging breach of contract, fraud and more.
Caldbeck, accused of
sexual harassment and unwanted sexual advances in 2017, took an
indefinite leave of absence from Binary Capital, leaving to Teo all the responsibilities of the $175 million fund. Shortly after, Teo offered to step down in a last-ditch effort to keep the firm afloat. Ultimately, Binary Capital
shut down and New York venture capital firm
Lerer Hippeau assumed responsibility for its $125 million debut investment vehicle, 70 percent of which has been deployed, per details shared in the lawsuit.
In the legal filing submitted to the Superior Court of The State of California, Caldbeck accuses Teo of mismanagement following his June 2017 departure. We’ve reached out to lawyers for both parties for comment.
“Mr. Teo completely abandoned the leadership responsibilities that were entrusted to him, neglecting to take the most basic steps required to run a venture capital firm,” the lawsuit states. “Mr. Teo was laughably bad at this job. As another Silicon Valley entrepreneur remarked publicly, ‘this guy has done everything possible wrong.’ ”
The filing cites 500 Startups and
Sherpa Capital as examples of funds that were able to survive following similar scandals wherein a partner was accused of sexual harassment and misconduct. Caldbeck, in essence, is upset Teo wasn’t able to successfully run Binary Capital following his own alleged wrongdoings.
Binary Capital co-founders Jonathan Teo and Justin Caldbeck
