Binary Capital Hands Over Fund to Lerer Hippeau After Sexual Misconduct Claims

(Bloomberg) -- Venture capital firm Lerer Hippeau will take over management of investments made by Binary Capital’s first $125 million fund after the firm was crushed by a series of sexual misconduct allegations, three people familiar with the matter said.

An email signed by Lerer Hippeau managing partner Eric Hippeau went out to Binary Capital companies on Monday, introducing them to the New York-based VC firm, said two company founders, who asked not to be identified because the message was private. The emails were sent after news website Axios reported plans for the handover earlier Monday.

Binary Capital crumbled last year after allegations of sexual harassment against co-founder Justin Caldbeck. He was ousted from the firm in June. Binary Capital has a second fund with $175 million, but most of it was unspent by the time Caldbeck resigned and investors voted to suspend operations.

Lerer Hippeau also oversees the investments of SoftBank Capital, a venture firm previously run by Japan’s SoftBank Group Corp.

To contact the author of this story: Sarah McBride in San Francisco at smcbride24@bloomberg.net.

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