Over the past year, there have been a number of sexual harassment scandals in tech, especially involving venture capitalists. The power dynamic in our industry has enabled bad actors to harass founders seeking capital and junior employees trying to work their way up in a very competitive and historically male-dominated industry.

Some in the industry feel that Limited Partners (“LPs”) — the institutions, wealthy families, and wealthy individuals that fund VCs — are in a strong position to create change because they are the first source of capital in the investment chain. If bad-actor VCs are unable to raise capital, it diminishes their ability to leverage the power of that capital to harass others. As a result, LPs could be part of the solution by choosing not to fund VCs who commit sexual harassment.

A challenge is identifying bad actors before they have the power to prey on others. Victims of sexual harassment rarely report it for fear of retaliation or reputational damage. In addition, sexual harassment lawsuits are often settled out of court and involve non-disclosure and non-disparagement agreements. Likewise, many employers have non-disclosure provisions in employment agreements that prevent victims of sexual harassment from speaking out. Thus, allegations of sexual harassment are unlikely to show up in common due diligence methods such as background checks and reference calls.

So how can LPs find out if a fund manager has been accused of sexual harassment?

They can start by at least asking the question. A recent survey conducted by the Investment Management Due Diligence Association (IMDDA) revealed that 89% of the 78 participating institutional investors do not inquire about sexual harassment in the workplace (not to mention sexual harassment outside the workplace, such as that which is committed by VCs against founders seeking capital). It’s time for LPs to step up and start asking this question during diligence on a fund manager.

As an investor in smaller funds, we don’t apply a one-size-fits-all approach to fund managers. We do, however, conduct significant due diligence on every Partner Fund we invest with, even the ones we have known for years.

In addition to asking specifically about historical or current instances or allegations of sexual harassment, we’ve recently added a disclosure provision regarding sexual harassment to our standard side letter. We don’t view this as a legal mechanism, but as a tool to prompt a difficult conversation that needs to happen.

These are two specific ways LPs can inquire about sexual harassment issues with VCs they are considering funding. The IMDDA survey mentioned above provides additional recommendations for institutions looking to conduct diligence about sexual harassment. In addition, the Institutional Limited Partner Association (ILPA) is working on developing guidelines for addressing sexual harassment during and after the due diligence process.

As both an LP and a GP in the entrepreneurial ecosystem, we want to find ways to combat sexual harassment and the cultures that allow it to persist. Asking uncomfortable and direct questions is a start and we hope more LPs will feel empowered to join us in having the difficult conversations.  

We are pleased to announce that Foundry Group has made a Series A investment in Section.io. Based in Boulder, CO and Sydney, Australia, Section.io is building a modular, API-driven reverse-proxy layer to provide web engineers with greater flexibility, transparency, and control over advanced edge compute for delivery of their web applications.

Section.io was founded in Sydney, Australia by Daniel Bartholomew and Stewart McGrath, who became frustrated with the rigid “black box” approach of legacy Content Delivery Networks (CDNs), and the misalignment of those CDNs with modern DevOps principles. Stewart and Daniel recognized CDNs were not able to adapt to quickly enough to keep pace with modern software development practices.

Section.io believes there is no “one size fits all” approach when it comes to what software an engineer should choose for their application edge, or indeed on how many endpoints or where that application edge should exist. Section.io also believes that as more compute is taking place at the edge, software should be more reflective of an engineer’s application stack: fully-programmable, flexible, and easily adaptable.

Section.io’s container-based approach to HTTP traffic delivery includes highly available and highly performant HTTP traffic control modules which can be run in a distributed fashion as a CDN and/or behind the firewall as an Application Delivery Controller.

Modules currently available on Section.io include Varnish CacheTM, OpenResty, Image Optimization modules, Web Application Firewall modules, server-side multivariate testing, virtual waiting room, Google’s PageSpeed, and other front end optimization options. As a container-based platform, new modules are being added frequently. Providing a truly DevOps-centric platform, all modules have consistent configuration-as-code and diagnostics capabilities.

Section.io fits into our Glue and Protocol themes as their PaaS connects compute infrastructure from multiple service providers for improved HTTP traffic delivery from a true federation of compute providers.

We met Daniel and Stewart as they were applying to the 2016 Boulder Techstars class, and have followed their progress since they graduated from the program. We are excited to have an opportunity to work even more closely with them through our investment in the company.

 

As we build out our Partner Fund portfolio, we look for opportunities to strengthen existing relationships in our ecosystem. We’ve known the Arthur Ventures team for several years and were thrilled to welcome them to the Foundry Group family earlier this year.

Based in Minneapolis, Minnesota, Arthur Ventures invests in fast-growing, scalable, enterprise software companies outside of Silicon Valley. They’re often the first institutional investor for portfolio companies, writing a substantial initial check at Seed or Series A.

We initially met the Arthur Ventures team through our co-investment in Leadpages. As we spent time getting to know them, we were impressed by their passion for partnering with incredible “Outside the Valley” founders and by their overall hustle. They are not afraid to fly all over North America to connect with great founders and their responsiveness is absolutely incredible They’re thoughtful about portfolio construction and are disciplined and data-driven in their approach to investing. We like that they know what they’re looking for and focus their time accordingly.

In addition to strategy and hustle, we were drawn to the team’s midwest values and commitment to putting founders first. As we spoke with founders that have partnered with Arthur Ventures, we validated our instinct that this team fits the Foundry Group ethos. They move quickly and don’t waste founders’ time. They roll up their sleeves and dig in but know how to balance helping with giving management teams space to thrive.

As with several of our Partner Funds, we started talking to Arthur Ventures about their new fund in a friendly, informal manner. Given our years of GP and LP experience, we like to spend time with friends as they think about launching a new fund and develop their fundraising strategy. We coached Arthur Ventures through several iterations of their pitch deck, helped them think through their partnership structure, and introduced them to some of our favorite LPs. As we helped them through this process, we found them to be coachable while also maintaining conviction in their strategy and approach. We saw that they have great love and respect for each other, which is key to any long-term partnership.

As part of our diligence process, we spent time reviewing and talking through the Arthur Ventures 2013 fund portfolio. We grew confident that their style of portfolio and founder overlapped with ours and were excited by the potential for direct co-investments. We liked the portfolio so much that we expanded our commitment during their fundraise and the team helped us put together a secondary purchase, so we’re now fully aligned as an LP in both the 2013 and 2017 funds.

We’re excited to have partnered with the Arthur Ventures team to get more exposure to companies outside Silicon Valley as we are big believers that incredible companies can be built anywhere. We also look forward to co-investment opportunities in our Protocol, Glue, and Adhesive themes.

Today, Foundry Group was recognized for creating the most positive impact for our workers based on an independent, comprehensive assessment administered by the nonprofit B Lab. Honorees are featured on B the Change, the digital Medium publication produced by B Lab, at bthechange.com/bestfortheworld.

Foundry Group announced its’ certification as a B Corp over two years ago – B Corps are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency measured by the B Impact Assessment (BIA). We joined a growing community of more than 2,400+ Certified B Corps from 50+ countries and over 130+ industries working together toward one unifying goal: to redefine success in business

The Best For Workers list includes businesses that earned a Workers score in the top 10 percent of more than 2,400 Certified B Corporations on the B Impact Assessment. The assessment measures a company’s impact on its workers, community, customers and the environment.

On an operational level, we have always sought to treat our team members, community, and the planet with respect and thoughtfulness. Engaging in the B Corp certification process provides us with the opportunity to quantify these things through the B Impact Assessment. Our team members are a big part of this and integral to our success as a firm. We were thrilled to learn we were being honored by B Lab for how we treat our team members.

The 185 Best For Workers companies come from 58 different industries and 20 countries. B Lab simultaneously released separate lists recognizing B Corporations as Best For The World Overall impact, Best For Environment, Best For Customers, Best For Governance and Best For Community, which can be found at bthechange.com/bestfortheworld. In the fall, B Lab will release the Best For The World: Changemakers and the Best For The World: Funds lists.

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B Lab is a nonprofit organization that serves a global movement of people using business as a force for good.  Its vision is that one day all companies compete not only to be the best in the world, but the best for the world and society will enjoy prosperity for all for the long term.  

B Lab drives this systemic change by: 1) building a community of Certified B Corporations to make it easier for all of us to tell the difference between “good companies” and good marketing; 2) passing benefit corporation legislation to give business leaders the freedom to create value for society as well as shareholders; 3) helping businesses measure, compare and improve their social and environmental performance with the free B Impact Assessment; 4) driving capital to impact investments through use of its B Analytics and GIIRS Ratings platform.

For more information, visit http://www.bcorporation.net.

B the Change is a Medium publication, produced by B Lab in collaboration with the community of Certified B Corps and the movement of people using business as a force for good.

B the Change exists to inform and inspire people who have a passion for using business as a force for good in the world. Because we believe that storytelling is an essential element in the transformation of business and society, we commit ourselves to telling the most compelling stories possible to the largest audiences possible to propel the movement of business toward its destiny as a powerful force for good. We want to dramatically broaden and deepen engagement with entrepreneurs, managers, employees, investors and citizens in one of the most important discussions of our time.

Read all B the Change stories at http://www.bthechange.com.

Today, Splunk announced they are acquiring VictorOps. We invested in VictorOps’ Seed round back in 2012 and it has been our privilege to work with co-founders Todd Vernon, Bryce Ambraziunas, Dan Jones, and the rest of the excellent VictorOps team over the past five years.

We’ve invested in Todd as a co-founder/CTO/CEO three times now: back in the late 90s where he was the CTO of Raindance Communications, as the CEO/founder of Sovrn (formerly Lijit), and as the CEO/founder of VictorOps. Obviously, we are big fans of Todd and his tenacity and persistence in building companies over the years.

VictorOps was built on the vision of empowering DevOps teams by integrating on-call management with centralized system monitoring information, automated escalation, and  real-time communication. This would massively enhance the situational awareness of the operations and development teams within an organization, and therefore drastically reduce system downtime and time-to-resolution of incidents. Their product has realized this vision, as thousands of VictorOps’ customers will attest.

VictorOps announced their initial integration with Splunk back in 2014, as it was one of their most user-requested integrations. In May 2017, VictorOps delivered an even richer integration with Splunk, making it available in the Splunkbase as a custom “Alert Action” in Splunk.

The integration of VictorOps’ and Splunk’s products is a powerful one and enables Splunk to extend the power, reach, and actionability of their platform’s dominance in aggregating and analyzing machine-generated data for their customers.

We think this combination is a powerful and strategic match, and we are excited to see the two companies come together. We’re also happy to welcome another big tech company to the Boulder ecosystem, and proud that VictorOps will be Splunk’s beachhead in Boulder.