State Accuses Silicon Valley Venture Capitalist of Sexually Harassing, Groping Staffer and Taking Un

The co-founder of a Silicon Valley venture capital firm sexually harassed a female employee, giving her unwanted massages and engaging in other groping, secretly taking photos of her and sharing them with other men, and offering her to another man, a state agency alleged in court documents filed Friday.

Lee William McNutt, of Dallas, Texas, made regular, unwelcome sexual advances and solicitations of the employee from about July 2017 through March 2018. She worked for Silicon Valley Growth Syndicate, a firm McNutt co-founded in 2012 that was then based in Menlo Park, the state Department of Fair Employment and Housing (DFEH) said in a civil rights complaint filed in U.S. District Court in Northern California.

McNutt denied all of the allegations in the complaint through a spokesman. DFEH alleged that McNutt had previously engaged in similar conduct in Texas.

The woman, identified as Jane Doe in the complaint, attended McNutt’s alma mater — Southern Methodist University in Dallas, Texas — from 2013 to 2017. She worked as a babysitter for several families in the area, and McNutt approached her at children’s soccer games, offering her work including modeling and dog sitting, DFEH said.

McNutt gave Doe an internship at the Syndicate. She began working there in January, 2017, and went full-time in June. Around September of that year, she was promoted to vice president, operations & communications.

DFEH alleges that Doe was subjected to several instances of sexual harassment that year:

In August, McNutt gave Doe an iPad to use for work. On it, she later found several close-up photos taken of her in a bathing suit during a work trip in July to Florida without her consent. During her employment, several photos of other young women — either in underwear or naked and taken from angles that suggested they weren’t taken with permission — appeared on an iCloud stream on the device. In an undated screenshot of a text message exchange, McNutt forwarded a video and photo of Doe in a bikini to another man, who responded “She is hot. Need to work it with her. Is it OK if I fly her back out here for Labor Day weekend?” McNutt replies: “Yes … offer to fly her out to CA.” During a late August work trip to La Jolla, McNutt took Doe to a nude beach without first telling her it was a nude beach. He removed his bathing suit and walked within her field of vision. He also took her back to the Airbnb where they were staying, asked her to change into shorts and then to lie down so he could give her a massage. He placed his hands under her shorts and massaged her bottom, placing his fingers close to her genitals. When he said it was his turn for a massage, she went to her room, locked the door and pushed a night table in front of it.

Doe took steps to protect herself after the La Jolla trip, and in January 2018 refused to travel with McNutt to Florida when he said she could stay with him in a one-bedroom condo or not come at all, DFEH said in the complaint. She later sought legal help, and in June 2018, McNutt told her that her contract would not be renewed.

A spokesman for McNutt said the allegations were “baseless.”

“The case is now properly being overseen by a federal judge, who we believe will correctly determine that the agency’s case has no valid basis for moving forward,” David Oates said in a statement.

Oates also described McNutt as a “dedicated family man who, through his charitable actions, is a strong supporter of veterans.”

McNutt is a co-founder and chairman of the nonprofit group State Funeral for World War II Veterans.

“Despite the negative impact on his family and friends, Mr. McNutt will vigorously work to have this case dismissed or resolved per the available civil law process,” he said.

DFEH says this isn’t the first time, alleging that McNutt has engaged in sexually harassing conduct against female interns and employees for over a decade.

The state agency included a July 2007 email in the complaint from a Texas-based investment group, Transition Capital Partners, where McNutt had been a partner. Under a subject line reading “Problems must stop,” the firm’s president wrote: “I am concerned about your involvement with our interns.”

The president said one intern had complained about being uncomfortable at McNutt’s house, and “now I have heard a similar report.”

“… You are to have no further involvement with any TCPIP employees at your house or anywhere else without permission from me or Harold,” the email continued. “I have made it very clear to [REDACTED] that the interns are to work at the TCPIP offices and nowhere else.”

In 2010, the Dallas Morning News reported that in 2008, Southern Methodist University barred McNutt from campus after several students complained about him. On February 15, 2010, university campus police arrested McNutt for trespassing.

Oates, McNutt’s spokesman, said “past allegations from nearly a decade ago are irrelevant to the current civil lawsuit.”

McNutt, who notes on his LinkedIn profile that he was a political appointee under the George H.W. Bush administration and part of his 1988 presidential campaign, said he has written a book on Silicon Valley and attended an executive program for venture capitalists at Stanford University in 2016.

As of 2017, Silicon Valley Growth Syndicate had invested tens of millions of dollars in local start-up businesses in California, with nearly 60% of those companies headquartered in Silicon Valley, DFEH said.

“We invest in Early Stage Companies with revenue,” McNutt wrote on LinkedIn. “Then, we ‘Coach Them Up’ to prepare for future growth and additional rounds of funding.”

On at least two occasions in 2017, McNutt visited local start-up accelerators Y Combinator and 500 Startups, looking for co-investors in San Francisco, DFEH said.

DFEH is also suing the company and other partners for not stopping the alleged harassment and abuse. Lawyers representing them did not respond to a request for comment.

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