Silicon Valley pledged to break up the boys’ club of investing in 2018. How did it do?

One year ago this month, Shervin Pishevar, an early investor in Uber, was ousted from his venture capital firm, Sherpa Capital, over sexual harassment allegations. He appears to be quietly back as the CEO of a scooter startup called Bolt, records reveal.

Dave McClure was forced out of his own startup accelerator, 500 Startups, in ignominy a few months before that. He apologized for being a “creep.” Now he’s writing a book about how to excel as a venture capitalist.

Sexual harassment allegations against these two venture capitalists and others helped kickstart a movement to break up the boys’ club of Silicon Valley investing. Their impending returns, previously unreported, are reminders that #MeToo jail time can be short — and that the larger project of reforming Silicon Valley’s inequities hasn’t always gone according to plan.

A year ago, Silicon Valley investors looked around and saw their mostly-male world in free fall. Harvey Weinstein was no longer the Hollywood kingmaker — he was a rapist. Matt Lauer was not just a friendly morning television host — he was a serial predator. Some of the most powerful men in Silicon Valley were on edge. Unvetted accusations flowed, as did the schadenfreude: The hushed question at cocktail parties and coffees went, “Hey, do you know who is next?”

Silicon Valley was gripped by a sexual harassment crisis born out of a diversity crisis and rooted in a cultural crisis. 2018 was meant to be a year of cleansing and progress.

“What got us here is crisis,” says investor Jenny Lefcourt of Freestyle VC.

But what is “here” now? A year after tech investors surveyed the post-Weinstein reckoning and pledged to do better, there is some cautious optimism across Silicon Valley about how the industry has treated diversity issues, according to Recode interviews with two dozen people involved in the response.

Behind the scenes, though, there are simmering reasons to worry: Venture capitalists’ own investors fear they are still backing serial sexual harassers who have evaded the industry’s best attempts to catch them. Some male venture capitalists for some reason see the diversity push as more of a public relations challenge than a legitimate critique. And some activists worry that focusing on diversity for diversity’s sake is leading firms to “tokenize” female investors, with Freada Kapor Klein, an elder stateswoman in Silicon Valley, telling Recode that this strategy will “predictably fail.”

Diversity in venture capital matters perhaps more than any part of the tech industry because of just how much weight investors carry in Silicon Valley. The people who control the cash — mostly, for decades, small partnerships of white men — determine the types of entrepreneurs that are backed. This, in turn, shapes the types of products that we use in our daily lives. Plus, investors are some of tech’s biggest celebrities, with profiles and influence that outstrip even their hefty wallets.

So, what has happened? Firms removed high-profile alleged sexual harassers like McClure, Pishevar and investor Justin Caldbeck. Some have announced a rapid-fire spate of hires and promotions for women investors.

But one year after the height of the drama, the stats speak for themselves: Progress is only modest.

“There is no one-year-in high-five,” said Aileen Lee, the de facto leader of the movement and a partner at Cowboy Ventures.

The number of women in check-writing roles has seen a bump, but it’s not much. American venture capital firms have added 30 new female senior investing partners in the last ten months, according to All Raise, a nonprofit founded by Lee trying to diversify the industry, which analyzed publicly shared hiring news. (Specifically, the group looked predominately at tech-focused firms without a corporate parent and with more than $25 million in assets.) Firms hired more women in the second quarter of this year than any quarter in at least the previous five years.

That has felt like a lot to observers. But during the same time, the industry added 68 male partners, according to All Raise. So the percentage of women in leadership roles only rose to 9.5 percent from 8.9 percent, All Raise says.

About three-quarters of U.S. venture capital firms still have zero women partners. Among the 153 firms that do boast a woman partner, it’s often singular — not plural: Three-quarters of these firms only have one woman in a senior leadership position. Those are roughly the same figures as ten months ago, All Raise says.

Despite all the attention on how to better support female founders over the last few years, new data shows that the percentage of venture capital funding going to startups with at least one woman founder has not changed since 2016 as judged by a three-month rolling average.

From the first quarter of 2016 to the last quarter of 2018, the percentage of venture capital dollars going to at least partially female-founded companies has consistently hovered at around 10 percent, according to Pitchbook.

Put another way: About $9 out of every $10 in startup money is still going to companies run by men.

That cruel reality speaks to just how hard it is to change the ways of an often immutable venture capital industry, where turnover is slow if it happens at all. Yet over the past year, some venture capital firms have clearly made hiring women more of an immediate priority than have others.

Andreessen Horowitz, the top-tier firm founded in 2009 by web pioneer Marc Andreessen and long-time business partner Ben Horowitz, had only men in general partner roles — the types of people who can typically lead their own deals and take board seats — until just this past summer. After years of resisting industry entreaties to hire a female general partner, the firm added three women to its senior ranks — Angela Strange, Katie Haun and Connie Chan — in a series of moves that was greeted by women in the industry with a combination of elation and confusion, they say.

After years of moving laughably slowly, in the eyes of some observers, the firm was now moving suspiciously fast.

Andreessen Horowitz has steadfastly resisted talking about the gender of its new partners, preferring to keep the spotlight on the qualifications of each individual hire, such as Haun’s extensive background in cryptocurrencies and Chan’s expertise in China’s tech market. In separate interviews with Recode this summer, each of the three new female partners largely declined when asked to talk about the significance of their appointment for women in the industry.

“I’m right now focused on just being a really great investor,” said Strange, for example.

“It was 100 percent a coincidence,” said Alex Rampell, a veteran male partner at the firm, when asked in one of those interviews if there was any larger strategy to hiring three female partners this summer.

But earlier this year, according to multiple people with knowledge of the conversations, Andreessen Horowitz started to hear from some founders who told them that they would not accept money from the firm because of their all-male lineup. That criticism, which has long simmered in Silicon Valley but spiked this year, played at least a role in the firm’s recent additions, according to one person close to the firm.

Andreessen Horowitz partners internally debated a policy change that indirectly made these senior-level hires possible. The firm scrapped a rule earlier this year that required its general partners to be former CEOs. The policy helped market the firm when it was relatively new, but partner Jeff Jordan acknowledged it limited the pool of diverse talent and change was overdue.

So after years of chasing external superstars like former Google Cloud head Diane Greene, the firm now could promote its internal superstars — women who easily could have been hired as general partners elsewhere.

It is still rare to see leading venture firms admit publicly that they had a problem, with some notable exceptions. For instance, Union Square Ventures, the prominent New York institution founded by Fred Wilson, had only male general partners since its inception in 2003. But last December, it hired Rebecca Kaden, a well-regarded, young consumer-focused investor from a well-respected but less prestigious firm, Maveron.

“I would be remiss if I didn’t address the diversity issue,” Wilson said when announcing her hire. “We are not doing this for optics or for public pressure. We believe that different perspectives, life experiences, and orientations in a partnership will lead to better decisions.”

That’s the primary driver of a lot of change — and why some in Silicon Valley are done appealing to investors’ better angels. “Our industry cares about making success and making money,” says Lee, “and I think we’re going to help people make success and make money.”

Many of the leading venture capital firms have found an easy place to begin breaking up their own boys’ clubs: From within.

From Carmen Chang at NEA to Sarah Guo at Greylock Partners, several leading venture capital firms found it easier — much like Andreessen Horowitz did — to promote in 2018 from the talent they already knew.

But neither NEA’s nor Greylock’s promotional materials made mention of the fact that Chang and Guo became their only female general partners. The firms likely wanted to keep the focus on the women’s qualifications.

The reason Greylock had a stigma to expunge in the first place was because a rival venture capital firm — the all-male, elite Benchmark — poached Greylock’s only female partner, Sarah Tavel. Her hire at Benchmark had removed that firm’s own stigma back in 2017.

It was a reminder of another challenge in breaking up the boys’ club: If you’re eager to hire a woman with long, proven experience in the venture capital industry, there are relatively few people to choose from.

Other marquee venture capital firms have had quiet success in this regard: Alphabet’s early-stage investing arm, GV, added two more women investors to its ranks this year. So did FirstMark, the New York firm behind hits like Airbnb and Pinterest.

About a dozen of the new female general partners in the Bay Area get together every month or two to build a support system and camaraderie like male partners might historically on the golf course.

But, while celebrated, these additions may be more a reflection of the glacial pace of change in the industry. It’s still rare to find a top venture capital firm with more than one female general partner, even in 2018.

For instance, Accel Partners just recently hired its only female investors in the U.S. — not partners, to be clear — after having zero American female investors until this fall.

Kleiner Perkins Caufield & Byers will have no women general partners after one of its high-profile leaders, Mary Meeker, leaves in a broader fund split next year, though Kleiner has said publicly that it is searching for a new female general partner.

SoftBank’s Vision Fund — recently the most powerful investor in tech — has had until recently a senior deal team that was almost entirely male. The same is true at Tiger Global Management, the New York giant that is leading hot deal after hot deal in Silicon Valley.

Why are firms struggling to solve this problem? Two reasons emerge from conversations:

There is a worry in elite investing firms about “forcing” a hire quickly in order to ease the pressure from advocates and the media, as one male venture capitalist at a firm with a poor diversity record explained it.

Venture firms are aware of the intense scrutiny. For example, one firm that recently hired a female general partner told Recode that it wasn’t originally planning to hire another general partner this year, but it felt urgency to add a female partner in the wake of the harassment scandals. But rushing through a bad hire — male or female — could hurt the firm’s financial performance for a decade or more.

And secondly, when you throw in the fact that it is mostly men doing the recruiting — to join their clubby, tight-knit partnerships — you begin to see why the numbers are the way they are.

The core of the problem: Venture capital firms typically recruit from the C-suites of big tech companies (mostly men), from the entrepreneurs that they’ve previously backed (mostly men), or from other venture capital firms (mostly men). So recruiting more women often means changing the way firms recruit.

Investors have historically won new recruits over years of private dinners and exclusive retreats. But some venture capital firms searching for women are turning to an old hand — the search firm — even though investors generally consider that approach riskier than trying to land people they already know.

Teague Splaine, who leads a recruitment firm that works with several of Silicon Valley’s highest-profile venture capital firms, said he knows of some firms that are exclusively seeking out female investors. But Splaine says that’s the last thing they’ll tell recruitment targets.

“All of these firms are smart enough to know it turns a lot of women off if they’re only looking for a female,” Splaine says.

Women investors in Silicon Valley have been — rightly — frustrated for years. But now they are finally getting organized.

All Raise, a nonprofit trying to diversify venture capital that was started by 34 senior women in the industry, officially launched this spring. It’s trying to double the percentage of women in check-writing roles within a decade and grow the proportion of money going to women-run startups by 10 percentage points within five years.

All Raise is essentially an umbrella for feminist initiatives in the industry, broken down into working groups that focus on things ranging from involving male allies to routing checks from women VCs to women CEOs. Its first summit in November saw a crowd of about 400 women — mostly junior investors who eagerly networked over canapés — and was headlined by female leaders like former top Justice Department official Sally Yates.

One of All Raise’s underrated accomplishments has been its ability to bring together most senior investing women in the U.S. and avoid splinter groups. It has successfully merged with other programs, such as a founder-to-founder mentoring project that became part of All Raise’s Female Founders Office Hours — responsible for 750 meetings.

Other projects include quietly bringing together one to two dozen high-level female executives about once a month for intimate dinners at private homes and offices to talk about how to promote opportunities for women in venture capital. And the group also has built an email list with upward of 1,100 subscribers from diverse backgrounds that has publicized 127 job placements — in an industry where postings travel by word of mouth and are rarely advertised.

But despite its lofty goals, there is some disagreement within Silicon Valley about its tactics. Given how severe the problem is, All Raise has taken a surprisingly non-confrontational approach toward firms that are failing to diversify. It has not been explicitly focused on combating harassment, though some women would like it to. Women within the organization tell Recode that they have broadly resisted the temptation to “name and shame” certain firms, worrying that would cause supportive men to recoil.

“There are some firms that have looked the other way, that have harbored harassers or bad behavior,” Lee said. “Those sort of folks definitely give me pause.” The debate among activists is, in the words of Lee: “How long do you stay in the penalty box?”

Lee is sharp-elbowed but reluctant to throw punches. A well-liked Silicon Valley investor who spent more than a decade at Kleiner Perkins — and who coined the term “unicorn” to denote a billion-dollar startup — she is trying to wage an outsider’s battle with insider’s tactics.

“There are plenty of people who are good human beings who weren’t paying attention to these inequities,” said Lee, “and now we want to help.”

Still, some women want to see a harder edge from All Raise. The stiff-arms from founders to male-dominated firms like Andreessen Horowitz, for instance, reflect the approach that diversity advocates have increasingly rallied to in the last year: Firms will not reform voluntarily.

To force change, you have to be willing to play to firms’ greed.

But about as far as All Raise will go is to organize 1,000 founders to publicly commit to judging prospective investors based on their firm’s diversity. It’s fair to wonder whether the practice has any teeth, but there are some early examples of it being used.

When a venture capital firm this August reached out to Todd Berman, the CEO of a startup called EveryTeam, to gauge his interest in a meeting and a possible investment, Berman mentioned the All Raise effort. He told the all-male firm, which he declined to identify, that he wasn’t open to a deal unless it grew more diverse.

“Here at EveryTeam, we prioritize helping organizations build diverse and inclusive teams, and currently it appears that your investment team is entirely white men,” Berman wrote to the firm in an email that was obtained and reviewed by Recode.

The firm replied it was “cognizant of the need for more diversity on our end.”

Five months later, it is still an all-male firm.

Then there are sharp critics who think All Raise is focusing on the wrong thing entirely. Freada Kapor Klein, for decades a leading voice in the Silicon Valley diversity debate, is one of them.

If any woman has the gravitas to call out a movement that has quickly become fashionable and powerful, it is Klein.

She doesn’t hold back when asked about All Raise.

“It will predictably fail,” she said in an interview with Recode. “Adding a single white woman partner is not going to change the VC firm.”

Klein says organizations like All Raise focus too narrowly on improving a few numbers and not more holistically on the barriers that women entrepreneurs confront and how to “reinvent” the entire venture capital system. Klein is also unsparing toward the diversity of groups like All Raise — which are often racially and demographically homogeneous.

“Increasing the number of women that went to the same schools and think just like the men isn’t gonna get us so far,” she said. “The women are incredibly well-intended, and the same critique that they offer of top-tier all-male VC firms — they could hold up a mirror.”

Some women within All Raise share Klein’s concerns: Multiple members tell Recode that the group has had too limiting a focus on gender and not other types of diversity. All Raise has been trying to address that — hosting a panel on intersectionality at their recent summit, for instance.

Senior women investors also say they too worry about women being “tokenized” at firms, sharing Klein’s fear that women are being set up to fail if they are the sole diverse hire at a firm.

But Kirsten Green, who over the last few years has broken into the top tier of investing, said she is comfortable with male venture capitalists effectively doing the right thing for the wrong reasons.

Meet diversity, Green says, and you’ll love diversity.

“Entering a little bit of it into your life will demonstrate the value of it. If firms realized they were getting enough negative press or commentary about it — and felt like, ‘Oh gee, we’ve got to do something’ — and the best they could do is getting a token woman,” Green said, “even doing that is progress.”

But other voices argue that individual “wins” for women and people of color will be short-lived if leaders don’t actually believe in the mission. Klein’s husband, the Silicon Valley icon Mitch Kapor, called these token diversity hires “fake change.”

“Why is it that, when it comes to diversity, there’s vanity metrics left and right?” he said. “People are still A) ignorant and B) not entirely serious about this.”

Ann Miura-Ko, a partner at Floodgate who made her name by leading the seed round in Lyft, said she’s spoken with several women who’ve recently gone through interviews at male-run venture capital firms. “You need to make sure they’re not bringing you on because you have these great chromosomes,” she said.

There’s also debate looming about what exactly qualifies as a “check-writer” these days. Several female investors tell Recode that a creeping concern is title inflation for women “partners” who aren’t really partners. Firms have tried tricks like these for years, and still do — “We have non-investing staff who are women!” firms stress to reporters — but women say the semantics game is hitting new heights.

“The trickiest piece will actually be: How do you define a diverse firm?” Ko said. “There’s some tension in that you want to help all women become successful, but then you also don’t want to let the VC firm off the hook.”

One challenge for those trying to break up the boys’ club is that 2018 could end up being remembered as the movement’s high-water mark. Scrutiny of male-dominated firms could recede. Silicon Valley investors could grow preoccupied with some other debate. Maybe they already have. The half-life of a news cycle these days is pretty short.

A few men are already testing that very theory. The return of people like Pishevar and McClure will challenge the boys’ club. What kind of reception will they receive?

Pishevar, who was accused of sexual misconduct by five women in November 2017, is still fighting a fabricated police report obtained by some media outlets. A spokesperson confirmed that Pishevar has returned to investing out of his new family office.

Records also name Pishevar as the CEO of a new scooter company that has launched in the Miami area, where he recently moved. Florida state corporation records filed this July and reviewed by Recode list him as the sole officer and director of the company, Bolt Mobility Corporation. A person familiar with his work also said he was affiliated with the company, which is slowly bringing its electric scooters elsewhere in South Florida.

Recode has also learned that McClure is working on a book meant to serve as a how-to guide for people from less-privileged backgrounds, especially those outside Silicon Valley, who want to become venture capitalists, according to people familiar with the matter. McClure declined to comment on the record.

Whether Pishevar and McClure succeed in relaunching their careers will tell us a lot about Silicon Valley’s commitment to gender inclusion and diversity. The success of comeback stories like these — and there will be many, to be sure — will be at the leading edge in revealing whether the venture capital industry is actually changing. That story will unfold in 2019.

But despite some rosiness from the women of Silicon Valley about the progress in 2018, they speak in 10-year visions for a reason. The boys’ club might be breaking up — fitfully, unevenly and tentatively — but you’d be hard-pressed to find an activist who feels the work is done.

At least now, though, women in the Valley say they feel this debate is happening. Both investors who want to play the slow-and-steady game of conciliation and those who demand a more to-the-barricades approach agree on a basic fact that wasn’t true last year:

“We had a culture where, a year-and-a-half ago, you couldn’t have brought [diversity] up without being shot down in a meeting and made to feel like you couldn’t talk anymore,” said Lee. “It’s no longer a career-limiting move.”