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Sexual Harassment Laws Leave Gap for VCs, Founders

A blind spot in sexual harassment law could leave venture capital firms exposed.

The same laws that protect employees from sexual harassment are murky when it comes to startup founders trying to raise money in the Valley, since founders are not employees. Most venture capital firms say their internal policies don’t specifically address the topic either.

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Ms. Harrison, however, thinks it might turn out differently. Some judges view sexual harassment cases differently than they did nearly a decade ago, she said, and might be more likely to allow a similar case make it to a jury. “I would take that case and I would go after them,” she said.

Eugene Kim contributed to this article.

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The bad news for entrepreneurs is that, while it might be considered unprofessional for male venture capitalists to hit on female entrepreneurs in the context of fundraising, the law may actually allow the behavior.