- Iterable's former CEO Justin Zhu said he was removed due to racial bias, not his use of LSD in 2019.
- The startup, now led by its other Asian-American co-founder, said it has "zero tolerance" for racism.
When Justin Zhu was fired last year from Iterable, the $2 billion VC-backed marketing startup he co-founded, headlines blared about his LSD use from about two years earlier.
Zhu, in a new lawsuit filed against Iterable in San Francisco, says that painting him as the "LSD CEO" only serves as a distraction and a way to discredit his allegations about experiencing anti-Asian bias by the startup's investors, who he claims wanted to replace him with a white CEO.
The ousted CEO writes in the lawsuit that while he did micro-dose LSD in 2019, it was an attempt to help him cope with some of the mental health difficulties he was experiencing at work at the time.
"The 'LSD CEO' label is deliberate, but it's a wrong characterization," Zhu told Insider. "It's an excuse that that they used as a pretext for covering up racial discrimination," he said, referring to his former employer.
Iterable's current CEO Andrew Boni, who co-founded the firm with Zhu, is also of Asian descent.
"Iterable upholds a zero tolerance policy for discrimination and racism in the workplace and continues to foster a diverse, equitable, and compassionate work environment," a representative for the startup said in a statement.
The statement said that Zhu was fired after "multiple instances of violating the company's employee handbook, policies, and values," and denied any discrimination was at play. The company did not elaborate on details of those purported violations.
Zhu said he is not currently in contact with his co-founder Boni.
"While Andrew is half Asian American, I don't think his experiences — better, worse and similar — change what I went through," Zhu told Insider. "Likewise, I don't know if my speaking publicly about anti-Asian racism prompted the board to elevate a half Asian American person."
In his lawsuit, Zhu related an account of facing persistent doubts from investors about his ability to helm the startup, despite what he described as his role guiding it through multiple fundraising rounds including a $200 million Series E in 2021.
One particularly tense encounter with investors took place in June 2020, Zhu told Insider, during an unusual meeting in person during the early months of the COVID-19 pandemic. Zhu said he was summoned to South Park, a famed San Francisco venture capital haunt, where he met with investors including Murat Bicer of CRV, who is also named as a defendant in the suit.
There, sitting six feet apart in benches, and all wearing masks, Zhu said he felt like he was facing an effort to depose him as he fought to stay on as CEO rather than accept a possible demotion to a chief technical officer role.
"Justin responded that to demote him, despite Iterable performing at high levels, sends a message to every Asian American that they're not good enough to be CEO; that Asians will top out as tech people," Zhu's complaint said.
Bicer did not respond to a LinkedIn message seeking comment, and a representative from CRV did not respond with a comment.
Board member Lee Whittlinger of 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 representative for Silver Lake declined to comment.
Zhu said his experience at Iterable reflects the broader Silicon Valley culture, where investors like venture capital firms tended to perpetuate existing disparities in subtle ways.
He told Insider that board members at Iterable, for instance, used "coded" critiques that he was not "forceful enough" and that he was "conflict averse." Zhu said he believed such feedback fed into stereotypes about Asian Americans being better suited for more technical roles rather than leadership.
Workplace discrimination lawsuits are not uncommon in the tech industry, where high-profile companies like Google have been accused of fostering inequalities. It's less common to see litigation by CEOs alleging discrimination, as such disputes often tend to be resolved through more private forums. Zhu's attorney, Charles Jung, told Insider that the goal of the lawsuit was to shed light on legal protections that allow workers to report their experiences of bias.
"This case is about telling the truth and that an employee, even a CEO, should not be punished for it and they shouldn't be silenced for it," Jung, a partner at Nassiri & Jung LLP, told Insider.
Zhu said he plans to use any eventual monetary recoveries from the lawsuit to build a defense fund for Stand with Asian Americans, a group he co-founded of Asian American business leaders speaking out against anti-Asian discrimination, as well as to donate to other nonprofits advocating for Asian American causes.