In a rare move, venture capital firm Spark Capital has severed “all ties” with Dispo, the popular social photo-sharing platform co-founded by YouTuber David Dobrik, following the rise of rape allegations against a member of your team. Dobrik has since stepped down, according to a statement released on Sunday.
Experts say a venture capital culture that tolerates sexual harassment and male-dominated teams is partly to blame.
“The number of sexual harassment and allegations in the venture capital industry is a joke,” said Lakshmi Balachandra, associate professor of entrepreneurship at Babson College in Wellesley, Massachusetts.
“Money, power and all men lead to bad behavior – and women receive less than 2% of all funding,” said Balachandra.
After the allegations were first published in a Business Insider investigation last week, Spark Capital, a Boston-based venture capital firm, which just a month ago led a large $ 20 million investment round A series at the startup, announced that he was distancing himself from the company.
“In the light of the recent news about Vlog Squad and David Dobrik, the co-founder of Dispo, we made the decision to sever all ties with the company”, account of Spark Capital on Twitter posted Monday morning, just after midnight.
“We have resigned our position on the board and are in the process of taking steps to ensure that we will not profit from our recent investment in Dispo,” said the tweet.
But the company has a commitment 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 aggression or violence and believes that survivors should always be heard and supported. To stay true to our mission, we support David’s decision to separate from the company,” said the company tweeted Monday. Dobrik’s co-founder and childhood friend, Natalie Mariduena, did not make an announcement about her future at the company.
Mariduena said in a statement Tuesday on Twitter: “I spent a lot of time thinking about the recent allegations and, because of the seriousness, it took me a long time to process. Like many of you, I am upset and angry and cannot tolerate the behavior detailed in the article or any sexual misconduct / abuse for that matter. “
Other companies that participated in the financing round, including Seven Seven Six, by Reddit co-founder Alexis Ohanian, said they were distancing themselves from the startup and would donate any profit from the investment to organizations that help women victims of sexual violence.
Even without a material sign of failure, the statement from the leading venture company itself is uncommon among investors in startups.
“It is extremely unusual for a VC to sever all ties with a founder or company he invested in,” said David Robinson, professor of finance at Duke University, in an email.
“The reaction you are seeing is proof of the seriousness of the charges the founder is facing,” he wrote.
For years, brands have paid influencers to showcase their products in their posts, a practice that was criticized by the Federal Trade Commission when some influencers did not disclose the sponsorship. Others, like fashion blogger Arielle Charnas, makeup blogger Huda Kattan and personal trainer Kayla Itsines, started their own fashion, beauty and training lines, respectively. Starting a business with venture capital investors is the next iteration. VCs were just as quick to profit at the time as they are now to retreat.
The risks associated with partnering a brand with a celebrity are nothing new. Several brands cut ties with Tiger Woods after a car accident in 2009 destroyed his image as a thoroughly clean family man and exposed his infidelity in series.
But the reputation crisis of all the brands involved underscores the need to conduct proper background checks on the parties involved and not to allow a “rule-breaking” property to be an excuse to ignore the basic rules.
According to its website, Spark Capital’s initial risk team consists of six men and one woman. The gender imbalance probably contributed to the company neglecting or giving in to offensive materials and behavior in Dobrik’s online video empire, Balachandra said.
Women Who Tech founder Allyson Kapin, general partner of the W Fund, which invests in women and technology startups with diverse leaderships, said in an email: “Due diligence on the founders is one of the most critical parts of the process when you are investing in a startup. If the founder (s) have a known history of ‘fraternity’ culture where they film and profit from toxicity, this should have immediately raised red flags for any investor. “
Kapin said that Dispo as a company can still survive and thrive without its co-founder.
“The Dispo team has a great opportunity at this early stage in the company to create a nontoxic culture that is welcoming, inclusive and respectful, with zero tolerance for sexual harassment – and that should be in the DNA of the new leadership,” Kapin said. “If the new leadership invests in it and its user community, they will do well.”
According to the Business Insider report, Dobrik’s college friend, Dominykas Zeglaitis, who goes by “Durte Dom”, is accused of being the author of the rape allegations.
Zeglaitis invited several university students via Instagram to make a video filmed by Dobrik. One of the women, who says she was 20 at the time, said she passed out from the alcohol provided by Vlog Squad and did not consent to having sex. According to Business Insider, Dobrik uploaded a video of the incident, entitled “SHE SHOULD NOT HAVE PLAYED WITH FIRE !!” It was removed at the woman’s request.
Zeglaitis did not comment publicly on the charges.
In the second of two apology videos, Dobrik, who lives in Los Angeles, announced that he would take a break from social media, that he believed in the woman’s allegations and that he should never have posted the video, “although I had consent.”
“I want to apologize to her and her friends for putting them in an environment that I have made possible and that made them feel that their safety and values were compromised,” he said.
Dobrik started on the short-form video service Vine before moving to YouTube with his group of friends, who appeared in his videos as “characters”. The videos consisted of self-described games and improvised dialogues, carefully edited with a carefree and raw touch. Some videos were “really offensive” and interpreted as “bad jokes”, said Dobrik.
The “shock” tactic was worth it. His channels and those of his friends have accumulated millions of views and subscribers, powered by the YouTube algorithm, which rewards audience viewing time, regardless of whether viewers like the videos they’re glued to.
Brands, desperate for audience and authenticity in an increasingly fragmented world of vision, have filled it with endorsements and awards. Chipotle named a burrito in his honor. EA Sports gave him a $ 290,000 Lamborghini.
In 2019, Dobrik launched a photo app called Dispo, a digital version of a disposable analog camera. The photos were taken without filters and appeared on the timeline 24 hours later, an antidote to the aesthetic of perfection-seeking that permeates Instagram. Sown among other influencers, the app took off among its followers and attracted the interest of the venture.
The videos act like comedy at the first screening, in part because most of the participants are often shown laughing. In a sample of scenes from a video, “The Best Moments of Durte Dom in David’s Vlogs”, a rabbit is portrayed as being trampled to death during editing. A woman is called a “slut”. Two men wear wigs and dresses and try to enter fraternity parties. Women are recruited outside of Craigslist to jump outside an apartment. A woman who is reportedly drunk sits on a couch while the other participants play a game of questions and answers.
In a video posted on March 9, before the rape accusations surfaced, Zeglaitis apologized for other videos in which he appeared that involved comments “ashamed of bitches” and were “openly racist. He said another former member described the group of video producers as a “toxic cult”.
“At the time, we were making these videos, and they were funny, they were jokes and they were comical,” said Zeglaitis in the apology video. “You don’t realize that these certain jokes and certain pranks and these video clips have repercussions on people.”
Dobrik said that when he returns to making content, he hopes to do so with “infrastructure” and “checks and balances”.
For now, the moment may be a kind of reckoning in the rush to capitalize on influencers.
“Expect to see new guidelines emerge,” said Ronn Torossian, CEO of the public relations and crisis communication agency 5WPR, by email. “Smart brands will not allow this to happen twice.”