Ex-CEO says alleged anti-Asian prejudice led to layoffs, not LSD use

  • Former Iterable CEO Justin Zhu said he was removed because of racial prejudice, not his LSD use in 2019.
  • The startup, now led by its other Asian-American co-founder, said it had “Zero tolerance” for racism.
  • The dispute has escalated to court, where Zhu has sued the startup and two investors.

When Justin Zhu was fired from Iterable, the $2 billion VC-backed marketing startup he co-founded, last year, headlines made news about his LSD use from about two years earlier.

Zhu, in a new lawsuit against Iterable in San Francisco, says the portrayal as “LSD CEO” is only a distraction and is intended to discredit his claims that the startup’s investors have experienced anti-Asian prejudice, which he alleges that they wanted to replace him with a white CEO.

The ousted CEO writes in the lawsuit that while he microdosed LSD in 2019, it was in an attempt to help him cope with some of the mental health issues he was experiencing at work at the time.

“The label ‘LSD CEO’ is intentional, but it’s a mischaracterization,” Zhu told Insider. “It’s an excuse they used as an excuse to cover up racial discrimination,” he said, referring to his former employer.

Iterable’s current CEO, Andrew Boni, who co-founded the company with Zhu, is also of Asian descent.

“Iterable maintains a zero-tolerance policy for discrimination and racism in the workplace and continues to promote a diverse, just and compassionate work environment,” a representative for the startup said in a statement.

The statement said Zhu was fired after “repeated violations of the employee handbook, policies and company values” and denied that discrimination was involved. The company did not provide details of these alleged violations.

Zhu said he is currently out of touch with his co-founder Boni.

“Even though Andrew is half Asian American, I don’t think his experiences — better, worse, and similar — change what I’ve been through,” Zhu told Insider. “Similarly, I don’t know if my public speaking out about anti-Asian racism caused the board to uplift a half-Asian American.”

In his lawsuit, Zhu said investors continued to have doubts about his ability to steer the startup, although he described it as his role in leading it through multiple fundraising rounds, including a $200 million Series E in 2021.

A particularly tense encounter with investors took place in June 2020, Zhu told Insider, during an unusual face-to-face meeting in the early months of the COVID-19 pandemic. Zhu said he was called to South Park, a famous venture capital hub in San Francisco, where he met with investors including CRV’s Murat Bicer, who is also named as a defendant in the lawsuit.

There he sat on benches two meters apart and everyone wore masks. Zhu said he felt he was facing an effort to unseat him as he fought to remain as CEO rather than accept a possible demotion to chief technical officer.

“Justin responded that while Iterable scores high, his demotion sends a message to every Asian American that they are not good enough to be CEO; that Asians will come out on top as tech people,” Zhu’s complaint said.

Bicer did not respond to a LinkedIn message requesting comment, and a CRV representative did not respond with comment.

Board member Lee Whittlinger of the investment firm Silver Lake, who Zhu said was involved in a call about Zhu’s termination in 2021, was also named as a defendant in his lawsuit. A Silver Lake representative declined to comment.

Zhu said his experience at Iterable reflected the broader Silicon Valley culture, where investors like venture capital firms tended to subtly perpetuate existing differences.

He told Insiders that Iterable board members, for example, used “coded” criticism that he wasn’t “intrusive enough” and “averse to conflict.” Zhu said he believes such feedback has created stereotypes that Asian Americans are better suited for more technical roles than managerial positions.

Lawsuits of discrimination in the workplace are not uncommon in the tech industry, where high-profile companies like Google have been accused of promoting inequality. CEOs are less likely to bring claims of discrimination, as such disputes are often resolved in more private forums. Zhu’s attorney, Charles Jung, told Insider that the goal of the lawsuit was to shed light on the legal protections that allow workers to report their experiences of bias.

“This case is about speaking the truth and that an employee, even a CEO, should not be punished for it and should not be silenced,” Jung, a partner at Nassiri & Jung LLP, told Insider.

Zhu said he plans to use any money recovered from the lawsuit to build a defense fund for Stand with Asian Americans, a group of Asian American business leaders who speak out against anti-Asian discrimination, which he co-founded, as well as donations to other nonprofit organizations that support engage in Asian American causes.

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