New Dallas venture capital firm Intelis Capital has a strong message for the Dallas startup community: Stop doing business with “bad actors.”
Intelis partners Jonathan Crowder, Kevin Stevens, and Kevin Crowder have co-authored a statement which calls for the community to raise the standard of doing startup deals in Dallas. That means, they told me, publicly standing up and speaking out against investors who have abused their power, whether via sexual harassment, business harassment, or by forcing entrepreneurs into decisions they’re uncomfortable with.
The investors said they learned about local abuse-of-power incidents during the year they spent researching the community as they prepared to launch Intelis, which was founded last June. Jonathan Crowder said that some of the instances are “common knowledge among members of the community.” Stevens said that the dynamic in the Dallas startup community is “backward,” because investors hold all the cards, in contrast to other successful startup communities, where the startups serve as the core. With the dynamics “reversed,” “negative” and “corrosive” behavior thrives, Jonathan Crowder said.
With Dallas Startup Week just days away from kickoff, the Intelis investors said they want their message to be heard.
“The Texas startup ecosystem is receiving increasing national attention, and it’s essential we seize this moment to catalyze growth,” Jonathan Crowder said. “With that increased attention comes increased scrutiny, and as some incidents about members of the local community received national media attention, we found ourselves inundated with conversations about the coverage. We wanted to ensure that those people feel their voices are heard, and to deliver both a local and national message that we as a community hold ourselves to the highest business and ethical standards.”
The firm did not release specifics about the “abhorrent behavior,” as they called it. But recently, a Dallas venture capitalist received local and national coverage after a drunken ski trip in Vail, Colorado, turned into criminal charges of attempted assault and attempted extortion.
The investors did, however, say that the impetus of the statement was a number of different instances they’ve been privy to during their time in the community. Although the investors have only made one investment thus far (the firm expects to make four by year’s end), they say they’re planning to hold their portfolio and business accountable for every person they choose to do business with.
Here are some key passages from the statement the three investors co-authored:
“It’s time for those of us who care about the technology community to grow up and stop being naive. Public companies have policies for these issues, and we need to bring the same maturity and sobriety to early-stage capital as well. Too often, especially in capital-starved tech ecosystems, the bar for acceptance becomes defined by a person’s ability to invest capital and all other standards are shoved aside in the hope that known patterns of abhorrent behavior in the past won’t surface again in the future.
This expectation has been repeatedly proven false, and as a result our community should pause for a moment to look in the mirror and ask challenging questions of ourselves. Why are these events happening with such disappointing regularity? What can we do to improve outcomes moving forward?
…
It has long been common for an individual or a firm to decry a bad actor, yet do business with them again at some point down the road. Our community of entrepreneurs and innovators cannot rise to its potential so long as that remains the case. It is only by creating disincentives to that behavior that we can, as a community, make it clear that some actions will no longer be tolerated.
For that reason, we want to step forward and state unequivocally that we will not invest alongside other investors when we are aware of the occurrence of significant or repeated wrongdoing. We will not partner with founders or executive teams where we have questions about their ethics or character.
We want the community to hold us to this standard, and we invite other voices to join ours in this commitment. When we remain silent and look the other way, we invite despicable actions and actors back into our community.”
For the full statement, click here.
The investors hope their statement will spur change. “I want entrepreneurs to feel like they have a voice, that they’re valued … and that their role in the ecosystem is paramount,” Jonathan Crowder told me.
“I hope this encourages people to have these conversations in a more public way and to hold people accountable, including us,” Stevens said. “We’re trying to hold ourselves to a higher standard, and we hope others do as well.”
