In a rare move, venture capital firm Spark Capital severed “all ties” with Dispo, the popular photo-sharing social platform co-founded by YouTuber David Dobrik, after rape allegations were raised against a member of its team. . Dobrik has since resigned, according to a statement issued Sunday.
Experts say a venture capital culture that tolerates sexual harassment and male-dominated teams is partly to blame.
“The sheer number of sexual harassers and accusations in the venture capital industry is a joke,” said Lakshmi Balachandra, associate professor of entrepreneurship at Babson College in Wellesley, Massachusetts.
“Money and power and all men lead to bad behavior, and women get less than 2 percent of all funds,” Balachandra said.
After the allegations were first publicized in a Business Insider investigation last week, Spark Capital, a Boston-based venture capital firm, which just a month ago led a large $ 20 Series A investment round. million at startup, announced that it was distancing itself. Of the company.
“In light of the recent news about Vlog Squad and David Dobrik, the co-founder of Dispo, we have made the decision to sever all ties with the company,” says Spark Capital’s Twitter account. aware early Monday morning, shortly after midnight.
“We have resigned our position on the board and are in the process of making arrangements to ensure that we do not benefit from our recent investment in Dispo,” the tweet read.
But the company has a term sheet and a binding contract with Dispo, and the statement does not specify how the investment itself would be affected. Spark Capital did not respond to a request for comment.
“Dispo unequivocally condemns any form of assault or violence and believes that survivors must always be heard and supported. To remain true to our mission, we support David’s decision to separate from the company,” the company said. tweeted Monday. Dobrik’s co-founder and childhood friend Natalie Mariduena has not made an announcement about her future at the company.
Mariduena he said in a statement Tuesday on Twitter.: “I have spent a lot of time thinking about the recent allegations and due to the severity it took me time to process. Like many of you I am upset and angry and do not approve of the behavior detailed in the article or any sexual misconduct / abuse for him. case “.
Other companies that participated in the funding round, including Seven Seven Six, Reddit co-founder Alexis Ohanian, said they were distancing themselves from the startup and would donate any investment proceeds to organizations that help women who are victims of sexual assault.
Even without a material breakout signal, the statement from the lead company itself is unusual among start-up investors.
“It is extremely rare for a VC to cut all ties with a founder or a company in which they have invested,” David Robinson, a finance professor at Duke University, said in an email.
“The reaction you are seeing is a testament to the seriousness of the allegations facing the founder,” he wrote.
For years, brands have paid influencers to feature their products in their posts, a practice that was criticized by the Federal Trade Commission when some influencers did not disclose endorsement. Others, like fashion blogger Arielle Charnas, makeup blogger Huda Kattan, and personal trainer Kayla Itsines, have started their own fashion, beauty, and workout lines, respectively. Starting a company with venture capital investors is the next iteration. Venture capitalists were quick to charge back then as they are now to back down.
The risks associated with associating a brand with a celebrity are nothing new. Several brands cut ties with Tiger Woods after a 2009 car accident shattered his image as a spotlessly clean family man and exposed his serial infidelity.
But the reputational crisis for all the brands involved underscores the need for proper background checks on the parties involved and not allowing a “rule-breaking” property to be an excuse to ignore the ground rules.
According to its website, Spark Capital’s startup team consists of six men and one woman. The gender imbalance likely contributed to the company overlooking or endorsing offensive material and behavior on Dobrik’s online video empire, Balachandra said.
Women Who Tech founder Allyson Kapin, general partner of the W Fund, which invests in women and tech startups led by various companies, said in an email: “Founder due diligence is one of the most critical parts of the business. process when they are investing in a startup. If the founders have a known history of ‘frat boy’ culture in which they film and profit from toxicity, that should have immediately raised red flags for any investor. “
Kapin said that Dispo, as a company, can still survive and prosper without its co-founder.
“The Dispo team has a great opportunity at this early stage of the company to create a non-toxic culture that is welcoming, inclusive and respectful, with zero tolerance for sexual harassment, and this should be in the DNA of the new leadership,” Kapin said. saying. “If the new leaders invest in this and in their community of users, they can do it well.”
According to the Business Insider report, Dobrik’s high school friend Dominykas Zeglaitis, who goes by “Durte Dom,” is allegedly the author of the rape allegations.
Zeglaitis invited several university women through Instagram to make a video recorded by Dobrik. One of the women, who says she was in her 20s at the time, said she fainted from the alcohol provided by the Vlog Squad and did not consent to having sex. According to Business Insider, Dobrik uploaded a video of the incident, titled “SHE SHOULD NOT HAVE PLAYED WITH FIRE !!” It has been removed at the woman’s request.
Zeglaitis has not publicly commented on the allegations.
In the second of the two apology videos, Dobrik, who lives in Los Angeles, announced that he would be taking a break from social media, that he believed the woman’s accusations, and that he should never have posted the video, “despite that he had. consent. “
“I want to apologize to her and her friends for putting them in an environment that I enabled and that made them feel that their safety and values were compromised,” he said.
Dobrik started out on the short-form video service Vine before turning to YouTube with his gang of friends, who appeared in his videos as “characters.” The videos consisted of self-describing jokes and impromptu dialogue, carefully edited in a carefree and raw style. Some of the videos were “really offensive” and were interpreted as “bad jokes,” Dobrik said.
The “shock” tactics paid off. His and his friends’ channels racked up millions of views and subscribers, powered by YouTube’s algorithm, which rewards audience watch time, regardless of whether viewers like the videos they’re stuck to.
Brands, desperate for audiences and authenticity in an increasingly fragmented visual world, showered him with endorsements and awards. Chipotle named a burrito after him. EA Sports gave him a $ 290,000 Lamborghini.
In 2019, Dobrik started a photography app called Dispo, a digital version of an analog disposable camera. The photos were taken without filters and appeared on the timelines 24 hours later, an antidote to the pursuit of perfection aesthetic that permeates Instagram. Sown among other influencers, the application took off among its followers and attracted the interest of companies.
The videos play like a comedy on initial viewing, in part because most of their participants are frequently shown laughing. A sample of scenes from a video, “Durte Dom’s Best Moments in David’s Vlogs,” depicts a rabbit beaten to death during editing. A woman is called a “whore.” Two men dress up in wigs and dresses and try to get into frat parties. Women are recruited off Craigslist to jump up and down outside of an apartment. A woman said to be drunk sits on a couch while the other participants play a question and answer game.
In a video posted on March 9, before the rape allegations surfaced, Zeglaitis apologized for other videos in which he appeared that involved “embarrassing whore” comments and were “blatantly racist.” He said another former member described the group of video creators as a “toxic cult.”
“At the time we were making these videos, and it was funny, and it was joking, and it was comical,” Zeglaitis said in the video’s apology. “You don’t realize that certain jokes and certain jokes and these video clips have repercussions on people.”
Dobrik said that when he does content again, he hopes to do it with “infrastructure” and “checks and balances.”
For now, the timing could be a reckoning in the rush to capitalize on influencers.
“Expect to see new guidelines in the works,” Ronn Torossian, executive director of crisis communications and public relations agency 5WPR, said in an email. “Smart brands will not allow this to happen twice.”