Silicon Valley venture capitalist Chris Schaepe is out at Lightspeed Venture Partners, after telling his partners about having hired Rick Singer, the Newport Beach, Calif., businessman in the middle of the college bribery scandal.
According to Axios, which broke the news of Schaepe’s departure, Schaepe insists he didn’t knowingly participate in any bribery schemes, but that he had hired Singer to help with his son’s college admissions process, paying a hefty $630,000 via cash and stock donations to an alleged nonprofit that Singer ran.
Specifically, Schaepe’s son, who’d been the manager for his high school’s basketball and football teams, aspired to attend the University of Texas. In an effort to guarantee a slot, Singer made an introduction to the school’s men’s tennis coach, Michael Center, who then helped secure a letter of intent for Schaepe’s son to attend the school.
The idea, suggests Axios, was to make it look like Schaepe’s son would manage the tennis team, though later, as a student, he managed the university’s college basketball team.
Sources say that soon after the admissions scandal broke, Schaepe hired a lawyer, then told Lightspeed, which soon after made the decision to part ways with him. But seemingly, a sports blogger named Brooks Melchior also played a role in the news and why it burst into public view today.
As Melchior noted in a post on Monday, Center, the tennis coach, was heard on an FBI wiretap confirming to Singer that he had received nearly $100,000 “in exchange for which [he] would designate a student as a recruit to the (UT) tennis team, thereby facilitating his admission to (UT).”
Center has since been fired, but Melchior noted that the parent in the case involving Center was neither named nor indicted, so Melchior did some digging. What he found: a screenshot of Singer’s now-deleted website that happened to feature a picture of Schaepe’s son, front and center, alongside NBA star Kevin Durant and a testimonial, reading:
I wanted to thank you personally for all your help in getting me into the University of Texas in Austin, and for helping me secure a managers position with the UT basketball team. And, can you believe it, here is a picture of me with basketball star, Kevin Durrant at the UT Summer Basketball Camp.
A source says the testimonial was manufactured from whole cloth by Singer after Schaepe’s wife sent him the photo. Nevertheless, it very publicly ties Schaepe to Singer.
Schaepe’s son, who began attending the school in 2015, is set to graduate next year, according to his LinkedIn profile. It further states that he is currently working at an automotive marketing company in Austin, where the school is based.
Asked for comment, Lightspeed sent us the following statement:
Lightspeed Partner Chris Schaepe recently made the firm aware of a personal matter. We determined to separate from Chris to ensure this matter does not interfere with firm operations. The matter does not involve the firm, its personnel or its portfolio companies.
Courtesy of Axios, Schaepe’s spokesperson has also released a statement, though some will presumably question it given the sum of money paid by Schaepe to Singer:
We are deeply disturbed that the person we had trusted to guide us through the college application process was engaged in inappropriate acts. Like countless other families, we believed that his services and his foundation were all above board, and we are shocked by his deception.
Schaepe, who co-founded Lightspeed 19 years ago, has already been removed from the firm’s website.
He’d spent the previous nine years as an investor with Weiss, Peck & Greer Venture Partners, leaving with colleagues Barry Eggers, Ravi Mhatre and Peter Nieh to form Lightspeed.
Eggers and Mhatre talked about the firm’s earliest days during a small industry event hosted in 2017 by this editor. Schaepe has meanwhile long operated in the background, orchestrating major wins for Lightspeed and, in the process, winning accolades, including from peer and sometimes rival Bill Gurley. As Gurley told Bloomberg in a 2017 story about Lightspeed’s rise, “Schaepe has been crushing it for years—without recognition.”
Given the scope of Singer’s network, Schaepe may not be the last investor caught up in the admissions scandal. According to an earlier Bloomberg report, Singer ran an apparently legitimate college counseling firm, the Edge College & Career Network, before about 2011. Some of his other past clients include John Doerr and Ted Schlein of Kleiner Perkins.
As with Schaepe, investor Bill McGlashan also lost a plum role, one at the top of the investment firm TPG, after it was revealed two weeks ago that he participated in schemes orchestrated by Singer on behalf of his own son.
Update: This post originally posited that Melchior’s post, which TC discovered earlier and independently today, may have played a role in these developments at Lightspeed; sources however insist that Schaepe and Lightspeed talked initially weeks ago about his involvement with Singer and next steps. Lightspeed has not responded to questions regarding an exact timeline of events.