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Lerer Hippeau Ventures, the New York-based early-stage venture firm, is taking over the $125 million debut fund created by Binary Capital, a young San Francisco-based venture firm whose co-founder’s misdeeds became the talk of Silicon Valley last summer.
Axios reported the development earlier this morning. Lerer Hippeau tells us it’s not commenting on the news.
The portfolio includes 25 startups, including Bellhops, a five-year-old, Chattanooga, Tenn.-based local moving services startup, and Unikrn, a three-year-old, Bellevue, Wash.-based e-sports wagering service that raised $31.4 million via an initial coin offering last fall. (Billionaire Mark Cuban is also an investor.)
What happens to Binary’s second fund is apparently an open question. Jonathan Teo, a co-founder of Binary, didn’t respond to our requests for more information this morning, but Recode reports that firm has “bogged down in various legal matters, including an attempt by Teo to have his fate decided in arbitration.”
Teo’s co-founder, Justin Caldbeck, had brought the firm to the brink of ruin. Last summer, an in exposé published by The Information, Caldbeck, who’d previously been an investor with Lightspeed Venture Partners, was accused of making unwanted sexual advances toward six women who said they were groped and propositioned during their professional relationship with him.
Caldbeck initially denied the claims, telling The Information’s reporter, “Go f— yourself.” A day later, he was apologizing for his behavior and, within short order, was forced to resign under pressure.
Teo had apparently hoped to hang on to the firm, which he created with Caldbeck in early 2014. Judging by Recode’s report, he’s still fighting to stay involved.
Caldbeck meanwhile showed up at his alma mater, Duke University, last fall to discuss the male-dominated world of finance. “If we’re going to make change, men need to behave better,” Caldbeck told the school newspaper afterward. “Part of what needs to happen is more education around these issues.”
Caldbeck separately told Bloomberg that he planned to release a website dedicated to the topic of “bro culture” and how to address it.
To the relief of his many critics, he appears not to have moved forward with those plans.
Pictured above, left to right: Teo and Caldbeck.