Altman says they started sending out the questionnaire in 2014, when a startup founder reported that she had been sexually harassed. “And we just said, ‘We don’t want this, we have no tolerance for this. But we need people’s help — we obviously don’t see every interaction, so tell us,’ ” he says.
When Y Combinator receives a claim of sexual harassment, the organization evaluates its credibility, starting with interviews of both parties. If Y Combinator determines the claim to be credible, it keeps that information confidential but does not invite the accused VC back to its prestigious showcase event called Demo Day. This is where Y Combinator-backed companies present to a roomful of investors. Airbnb, Reddit and Dropbox are three examples of Demo Day success stories.
Being in the room is “something most investors would like to have access to,” Altman says.
Critics have argued that in addition to facing the usual issues of fairness and verification when investigating such sensitive claims, Y Combinator’s blacklisting approach risks creating a climate where male VCs simply won’t meet with women entrepreneurs. The argument is that investors will be afraid of being falsely accused.
“Burying your head in the sand by not asking is the worst possible thing investors could be doing,” says Joelle Emerson, a former women’s right’s attorney who now runs Paradigm, a diversity consulting firm in San Francisco.
Emerson says Y Combinator is trying to hack a solution to a particularly challenging problem. Entrepreneurs and VCs have a significant power dynamic like that between managers and employees: Startups need money from VCs to succeed. But unlike the manager-employee relationship, the investor and the startup founder are not technically co-workers.
“If you’re an employee (and) you’re harassed at your workplace by a manager, there are very clear steps to follow,” Emerson says. “To be clear HR doesn’t always handle these things well but there’s a clear system in place in most organizations.” No such system exists for reports about VCs.
More importantly, Emerson says state and federal laws are pretty clear when it comes to addressing sexual harassment in the workplace, but “when you’re outside the employer-employee context, it’s a gray area from a legal standpoint because there are no laws directly governing the relationship.”
Altman says it’s this gray area that Y Combinator is trying to navigate.
“In the same way companies have HR departments and have a place to report inappropriate behavior,” Altman says, “the people in our program need a place to report inappropriate behavior, and I don’t think that should be a controversial thing.”