In 2021, German startup Auto1 listed on the Frankfurt Stock Exchange at a €10.6bn valuation, making a 25x return for one of its earliest investors, European VC firm DN Capital. That deal catapulted DN founding partner Nenad Marovac onto the 2022 edition of the coveted Forbes Midas List Europe, a ranking of the continent’s most successful VC investors. The same year, DN was named VC House of the Year at the 2022 Private Equity Awards and Marovac was shortlisted for Investor of the Year at the 2022 Investor Allstars Awards.
DN’s investors love the 23-year-old firm for its strong returns. Marovac holds board seats at some of Europe’s biggest tech businesses, including edtech unicorn GoStudent and HR tech giant Jobandtalent, and alongside Auto1, DN has had a share in several of the continent’s biggest tech exits, including Shazam’s sale to Apple and Remitly’s $7bn IPO.
But, away from the glitzy awards shows and satisfied LPs, allegations from former employees paint a far darker picture of Marovac’s conduct in the workplace.
Sifted spoke to 18 people who worked with the firm over a period ranging from 2003 to 2022. Seven alleged workplace misconduct at the firm including bullying, sexualised comments and physical touching in the office from Marovac during the early 2010s. A dozen female ex-employees set up an informal support group to discuss their treatment at the firm, while two former employees told Sifted that their experiences of misogyny while working at DN made them quit the VC industry altogether.
“You had to talk to people to convince yourself that the problem wasn’t you,” says Mary, a former employee who worked at DN in the early 2010s and whose name has been changed, as have those of the other people quoted in this piece.
“We had a support group of people who’d left the company, about 12 of us who used to meet up. All of them were women, it was like counselling with the girls like: ‘Oh my god, what did we all go through.’”
Many of these women didn’t speak out for years, afraid of the consequences for their careers in an industry where professional connections and referrals are critical, and reputation is everything.
Four others who’d worked with DN shared experiences of workplace misconduct by Marovac with Sifted but did not want to be quoted in this piece for fear of being identified. Sifted also spoke with seven former employees who said they had not experienced workplace misconduct at the firm.
A spokesperson for DN Capital said: “These allegations do not reflect the culture at DN Capital and they have been categorically denied by our founder Nenad Marovac. In the 23 years that DN has been operating there have been no informal or formal complaints of inappropriate conduct from current or former staff.”
The firm said that it takes its responsibilities as an employer “extremely seriously” and has “therefore instigated a thorough and independent investigation, led by an experienced law firm, with which the business will cooperate fully”.
The spokesperson added that the investigation would report to DN’s non-executive chairman, and that Marovac had “proactively taken the decision to step back from internal day to day management” until the investigation was completed “to protect its integrity”.
The spokesperson said there “will be no further comment while the investigation is ongoing”.
A spokesperson for Marovac said he was “shocked, disappointed and saddened to learn of the allegations” and said they did not reflect him as a person nor the culture at DN Capital. “The allegations which have been made by Sifted are anonymous and often in vague and general terms,” the spokesperson said, adding that it wouldn’t be appropriate to comment while an investigation is underway.
Marovac was born in Croatia and grew up in San Diego. He started his career on Wall Street before moving to Berlin in 1991, where his job was to sell the assets of the former communist regime. “My nickname was the Schlossverkaufer [castle seller],” he told Forbes in 2021. “Castles are very hard to sell and I sold three of them.”
After a stint in Berlin, Marovac returned to the US for an MBA at Harvard Business School, before heading to work at leading private equity firm Advent International. He then founded DN Capital in 2000.
DN spotted the potential of European startups at a time when nearly all other eyes were on Silicon Valley, and many investors had written off the continent as a backwater. Marovac gained a reputation for hunting out regional superstars like car marketplace Auto1.
As well as securing Marovac a place on Forbes’s European Midas List, DN’s success also earned him a number of industry roles, including chairman of Invest Europe for 2018-19, a trade association representing the venture capital and private equity industries.
DN has, according to Dealroom, done nearly 300 deals since it was founded. In 2021, it raised its fifth fund, a $350m pot, which, like previous funds, included money from the European Investment Fund. The EIF is an arm of the European Investment Bank, which manages and invests European public money.
Away from the office, he’s a regular at work-related social events like balls and dinners with a reputation for “enjoying the high life”, according to one former employee.
Unwanted touching and misogyny
DN has offices in London, San Francisco and Berlin. Its London HQ is in a townhouse a few streets away from Buckingham Palace. Former employees said it had an informal feel — or, as one put it, it was “extremely messy” and in need of a clean.
Many of the women who worked there over the years, however, claimed it was an uncomfortable environment for other reasons.
Working at DN meant being “touched on the bum countless times” by Marovac, claims Olivia, a former employee of the firm. “You’d just laugh it off and walk away.”
Mary also alleged that Marovac would frequently touch women in the office.
“He would slap people on the bum and laugh as he walked past — this would only be with pretty women,” she claimed. “We’d tell people not to be on their own with Nenad; this was a kind of code among the women working there.”
Both of these women worked at DN in the early 2010s.
Another woman who worked for DN, Ruth, told Sifted that Marovac — like “many other men in finance” — treated women like “something rather than someone”.
“It's that attitude of if you have money and you invite someone for dinner, it's like you've been bought,” she said. “It's like: you buy the handbag. You have bought something, therefore you do what you want with the handbag.”
Marovac’s alleged inappropriate behaviour towards women would extend to founders too, according to Katie, a former employee. “Nenad would take pitches from attractive female founders even if the company was clearly out of DN's investment scope or offered a business model or product the fund would not invest in.”
Another former employee, Claire, also said that it appeared to her as though attractive female founders were more likely to get a meeting with Marovac.
Conduct with interns
Multiple former DN employees told Sifted that Marovac did not appear to be mindful of the power dynamics at play between himself — an experienced investor and fund manager — and people starting out in their careers.
“There was a revolving door of secretaries and assistants, and he’d call them at all times of the day. The way he spoke to them and the tone of voice — he treated them as dispensable. You needed a very thick skin to be there,” Gary, a former employee, said.
Gary added that Marovac had a “lack of respect for the opposite sex” and was always surrounded with “young, pretty women”.
A lot of interns passed through DN’s offices over the years, former employees told Sifted.
“I was always astounded that every intern had similar traits. They were all ‘easy on the eye',” Gary said.
Mary said that Marovac seemed to vet interns based on their looks: “He’d walk out of interviews and say ‘Oh my god, hasn’t she got a beautiful arse on her,’ or ‘Oh my god, not that fat elephant’.”
Another former employee, Kai, said that he felt that he had to prevent a promising female intern from meeting Marovac early in the hiring process. “I had to have an early conversation with our team that she couldn’t be put in front of Nenad until after the technical assessment, as he would just hire her based on her looks,” he told Sifted. “We literally had to manage around the issue.”
Mary said that it was common knowledge that Marovac was sleeping with one of his interns at the time she was working there. “He used to buy her lots of clothes in exchange for sex. Everyone knew he was having sex with this person,” she said.
Kai said he was aware of similar stories during his time at DN.
“There was stuff going on with the interns that should not have,” he said. “I spoke to someone on the team who’d told me she’d been sleeping with Nenad while she was an intern.”
Olivia told Sifted that Marovac, 56, had a number of office relationships with younger women while she was working at the fund.
While former employees say Marovac sought relationships with some employees, others were the target of bullying, Mary alleged.
“He would say, ‘Don't you think it’s time to lose weight, get out of my office,’ or ‘What are you smiling about? If I had a face like you I wouldn't smile,’ or ‘I don’t want any more ugly people in the office,’” she claimed. “The bullying and the way he spoke to me got worse the longer I was there.”
Mary said that she felt that Marovac revelled in making women feel emotionally insecure.
“He wanted to see every woman in there cry. He’d walk in and say ‘Great, another one’s cried’,” she said.
Mary added that, after leaving DN, her self-confidence was damaged and she sought out support from others who’d been through the same experience.
“He’d berate people in front of the whole office. He would say things like, ‘Don’t you think you need to start going to the gym? Don’t put her on our website as she would frighten the investors away.’ Or: ‘Are you just thick or don’t understand English?’”
Olivia also claimed that seeing Marovac berating employees in the office was commonplace.
Pushing women out of the industry
One former employee, Claire, who worked at DN recently, described working at the firm as “the most humiliating experience”. She said that some male staff would frequently ignore female colleagues, make jokes about putting women on mute during video calls and that there was a “complete bro culture”.
There are no female partners at DN Capital.
Claire — who no longer works in venture — said that her experience at DN and the way she was treated “turned her off the entire VC world”.
“If you're a woman and you go to work surrounded by a bunch of men who don't take you seriously and treat you badly, and are rude to you all day long, every day, then you just need to leave,” she said.
Mary also left the investment industry after her experience with DN.
“After leaving DN, where I was continuously threatened that Nenad would blacklist me or sue me, I felt that this was an ‘old boys’ club' and I would end up in the exact same environment,” she said. “I had lost my self-confidence by the time I left after Nenad belittled me in public. He set the acceptable behaviours,” she said, adding that some of the other younger men at the company tried to emulate him.
Kai agreed that Marovac’s alleged behaviour had created a wider problem with toxic culture at the firm: “Bad behaviour isn't called out. When I left, people told me ‘that’s no surprise’.”
Threats and carry
Those who did want to call out bad behaviour were allegedly strongly incentivised not to.
Mary claimed that Marovac would keep people quiet about their experiences at DN by playing “psychological games”.
“People needed the experience and he’d say things like ‘I will make sure you never work in this industry again’,” she told Sifted.
Katie said she felt that, for women, speaking out could be “career suicide”. “It would be much harder for women to get their next role, male partners at other firms would be worried they’d be accused of something,” she said. “Women warn each other about DN but it’s so hard to get a job in VC that some still would consider taking it just to break into the industry.”
Two former employees claimed that Marovac would withhold carry (the cut of fund performance that VCs get on top of base pay) to keep people from speaking out about misconduct at the firm.
“He made commitments about carry that weren’t honoured,” Kai claimed. “There's a no-disparagement clause, which means you can't really kick up a fuss.”
“He would promise the world and deliver coal, regarding how much carry they’d get,” Mary said. “He played with people’s lives.”
Olivia was distressed by her time working at DN because of “the misogyny, sexual harassment and work culture” at the firm, leaving her, she claimed, with PTSD.
The fund’s investors include a combination of family offices, high-net-worth individuals, pension funds and, notably, the EIF — an entity funded by EU taxpayer money. The EIF is the biggest backer of European VC; in 2022 alone, it backed 67 funds with €2bn in capital.
Sifted reached out to the EIF regarding the allegations against DN and Marovac and asked if it had ever been made aware of concerns around workplace culture at the firm.
A spokesperson said that the EIF applies “thorough due diligence and monitoring measures and adheres to the highest professional standards as per our respective policies. We firmly condemn any form of misconduct.”
They added that they would not comment on DN Capital, but that the EIF was “committed to safety, respect and integrity in the EIF and in our partnerships”.
Former DN employees who spoke to Sifted for this article claimed that Marovac’s behaviour towards staff was an open secret in the VC industry — one that had been swept under the rug in a world where money talks and people are afraid of speaking out.
They hope that sharing their experiences of their time at DN Capital will result in an investment landscape that’s more accountable, and one where people can go to work without fear of being sexualised, bullied — or worse.
If you would like to share your own experiences of workplace misconduct you can confidentially contact Tim and Freya at firstname.lastname@example.org and email@example.com. There are also other ways to confidentially contact Sifted's reporters, explained here.
*Sifted edited this story at 11:45 UK time 14/08/2023 to change a pseudonym.