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Longtime VC Michael Goguen was just hit with an explosive lawsuit

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Michael Goguen, a longtime partner at Sequoia Capital who joined the tony Sand Hill Road firm roughly 20 years ago, has been named in an extraordinary breach of contract lawsuit that accuses him of sexually mistreating a woman he met in 2001, then refusing to honor a financial arrangement they made in more recent years to keep her from suing him.

Filed in San Mateo County court earlier this week, Goguen is accused of having abused the plaintiff, named Amber Laurel Baptiste, “sexually, physically and emotionally for over 13 years.” More centrally, states the complaint: When Baptiste “could no longer tolerate his behavior,” Goguen signed a contract to pay her $40 million “as compensation for the horrors she suffered at his hands.” But “after paying her $10 million, Mr. Goguen refused to honor the rest of his agreement.”

Baptiste, who was born in 1980 according to legal documents, could not be reached for comment. Her attorney, Patricia Glaser of the L.A.-based litigation firm GlaserWeil, is traveling in Israel, according to her office; she has not responded to an emailed request for comment.

Goguen’s attorney, Diane Doolittle, the co-chair of the national trial practice at Quinn Emanuel Urquhart & Sullivan, meanwhile wrote us a statement tonight, saying: “On Monday, we will be filing a legal cross-complaint against [Baptiste] alleging extortion. The cross complaint will include an enormous amount of evidence, and cite contemporaneous emails and texts, that will help paint a full and complete picture of this entire matter. We will rely on all of this evidence to mount the most vigorous defense possible in court.”

Either way, Goguen looks to be out of a job suddenly. Reached earlier tonight for more information, a Sequoia spokesman wrote us that, “We first learned of these claims yesterday. We understand that these allegations of serious improprieties are unproven and unrelated to Sequoia. Nevertheless, we decided that Mike’s departure was the appropriate course of action.”

In Baptiste’s complaint, she is described as a “victim of human trafficking since she was 15.” It says that she was “brought to America in 2001,” “sold as a dancer to a strip club,” and that shortly after her arrival, she met Goguen at a Texas strip club and was soon submitting to his “constant sexual abuse” and “relying on his promise that he would help her break free of the human traffickers who held her in perpetual debt.”

Continues the complaint, “Unbeknownst to Ms. Baptiste, Mr. Goguen was a worse predator than the human traffickers who were keeping her in bondage.”

Some of the accusations against Goguen — with whom Baptiste had a sexual relationship for 12 years and across his three former marriages, says the complaint — are highly graphic.

Among them, the complaint states that in “late 2011, Ms. Baptiste discovered that Mr. Goguen had infected her with several high risk strains of the Human Papillomavirus (” HPV”), putting her at risk of various cancers, including cervical cancer, which could require a hysterectomy and prevent her from being able to bear children.”

Another alleged action left Baptiste “bleeding and alone on the floor of a hotel room in a foreign country,” says the complaint.

Eventually, it states, Baptiste and Goguen struck on a financial arrangement.

In 2012, when Baptiste “discovered she had contracted several high-risk strains of HPV,” she “confronted Mr. Goguen, her only sexual partner at the time.” Later, it states, Goguen “agreed to pay Ms. Baptiste’ s expenses as compensation for the sexual abuse and infection she contracted from him.”

The complaint states that Goguen “paid her expenses for roughly a year, until mid -2013 when he refused to continue the payments.”

Baptiste was then “forced to hire an attorney” and “prepared to sue Mr. Goguen for the years of physical abuse, emotional trauma, and damage to her health.” After receiving the draft complaint, it continues, Goguen instructed her to fire her attorney and used his attorneys instead to draft a settlement agreement that arranged for him to pay $40 million to Baptiste in four equal payments.

Which leads us to the crux of the lawsuit (and, we’d hazard to guess, Sequoia’s decision to part ways with Goguen).

The complaint states that Goguen paid the first of the four $10 million payments to Baptiste on May 30, 2014 — then he stopped. Rather than write another check, it states, “On or about 21 December 19, 2014, Mr. Goguen sent a letter to Ms. Baptiste refusing to make the second payment, purporting to rescind the contract, and claiming the Settlement Agreement was null and void as procured under extortion.”

Baptiste is seeking the enforcement of that settlement agreement, along with attorney’s fees and other compensatory damages.

What happens next is anyone’s guess, but Goguen had evidently done very well financially as a partner at Sequoia. A late 2012 story about a home of Goguen’s on Whitefish Lake in Montana applauded him for providing $10 million to local law enforcement crews so they could purchase two state-of-the-art helicopters. He reportedly spent another $10 million on a trail system in Whitefish.

Expect to hear much more about the case Monday morning when the countersuit of Goguen is filed. You can read the full suit here.

Update: In a statement sent to us late Saturday from Goguen’s legal team, Goguen writes: “These horrific allegations against me come at the end of a 10+ year romantic relationship that ended badly.  Not surprisingly, the complaint is filled with every horrible buzzword you could throw at someone in today’s society to destroy their reputation. 

“At my direction, a cross compliant will be filed with the court first thing Monday morning alleging extortion.  It will contain an enormous amount of evidence, including messages that span years and show that she pursued me romantically and professed her love, respect and appreciation for my kind and compassionate treatment of her.    

“This matter is purely personal and has no connection to Sequoia.  My departure from there allows me to focus with full force on clearing my name and vigorously pursuing justice – starting on Monday morning with the filing of my cross complaint alleging extortion.”

Goguen also published a post in his defense on LinkedIn a bit ago. More here.