A founding father of Utah’s VC industry is stepping back as accusations of sexual harassment surface

As the cool night air settled over Utah’s Lake Powell, Elizabeth Moore feigned sleep. Eyes closed, she listened as the Mercato Partners cofounder Greg Warnock stepped into the living room of his houseboat.

She felt Warnock’s hand squeeze her arm as he whispered her name over and over, softening his voice so as not to wake the only other employee on the boat, who was sleeping on a nearby couch.

Moore pretended to wake. Her boss, a well-connected Utah venture capitalist with a mop of gray hair and rumpled shorts, asked her if she wanted to watch a movie. Her heart raced.

The two met almost two decades before when Moore’s husband worked with Warnock at a different firm, and they stayed friends through the years. Warnock hired her husband again at Mercato. Moore and Warnock would often give each other friendly hugs, and during the coronavirus outbreak, he invited her and other employees on the boat to work and rest. Though the trips weren’t mandatory, Moore didn’t feel as if she could say no to her boss.

They moved to a movie theater in the center of the boat. Warnock pushed an ottoman into a corner of the sectional, closed the blinds, and locked the door. He drew her close and ran his fingers across her thighs. Then he took her head in his hands and laid it on his barrel chest.

Moore sat rigid, fear locking her in place. Warnock lifted her shirt and brushed her stomach, his breath becoming fast and heavy. Panicked, Moore got up and said it was time for bed.

“You always know right when to leave,” Warnock said.

Mercato Partners sits in the Silicon Slopes corridor.( Left Photo) Utah’s tech hub is facing its own #MeToo reckoning. ( Right Photo)

Warnock, 64, isn’t a household name outside Utah’s tech outpost, but his firm has raised over $1 billion and has financed dozens of startups such as the data-analytics goliath Domo and the cloud-computing platform Lambda, which raised one of the largest funding rounds by an AI startup this year. Before starting Mercato, Warnock bought a large stake in a chemical-distribution business and made his first few millions in the acquisition. He went on to seed companies in his backyard such as Skullcandy and Stance, earning plaudits as one of the founding fathers of Utah’s venture scene alongside Jim Dreyfous and Paul Ahlstrom.

But a B-17 investigation has turned up accusations that Warnock has routinely made female employees feel uncomfortable. Half a dozen women told B-17 they faced unwanted touching from the investor while working at Mercato Partners, and three of them said Warnock clasped their thighs and stroked their arms or backs.

In 2021, Mercato agreed to pay Moore $70,000 as part of a severance agreement which included a release of Moore’s claims of workplace misconduct, including inappropriate touching from Warnock, according to records obtained by B-17. The firm paid another $162,500 to buy out her husband’s share of the firm’s future profits. The agreements silenced all parties with a mutual non-disparagement clause. The details in this story are drawn from declarations Moore provided to a lawyer in support of her claims, as well as other written correspondence and interviews with her colleagues.

Early last year, another former employee, Emma Jackson, who said she experienced sexual harassment and gender discrimination, brought her complaint to the Equal Employment Opportunity Commission, according to documents obtained by B-17. The federal agency said it found insufficient evidence to show discrimination based on sex and dismissed the charge following an investigation and interviews with multiple employees.

A spokesperson for Mercato said the firm’s employee handbook encourages employees to report unlawful discrimination or harassment immediately to a member of management. In addition, the firm had a law firm provide training for employees on sexual harassment early this year after employees raised concerns about workplace misconduct to management.

“Mercato Partners takes allegations of this nature very seriously and has a track record of taking action to investigate,” the spokesperson said.

The spokesperson disputed Elizabeth Moore’s account of the night on Warnock’s boat.

“Mr. Warnock’s recollection of the alleged interactions on the trip to Lake Powell differs dramatically from the former employee’s,” the spokesperson said. “Mr. Warnock regrets that certain of his interactions with the former employee have been misinterpreted, mischaracterized, and exaggerated in ways that he could not have anticipated. He wishes the former employee and her husband well.”

The spokesperson also provided statements from two people, Staci McCubbins, a tech entrepreneur and longtime friend of Warnock, and the chief executive of a Mercato portfolio company, who said they observed Warnock and the employee on multiple occasions be physically close and engage in what McCubbins described as “‘touchy feely’ behavior” initiated by the employee.

Salt Lake City’s tech scene — known locally as Silicon Slopes, after the snow-covered Wasatch mountain range ringing the city — is facing its own #MeToo reckoning. Silicon Slopes is an exceptionally male world, with a stark gender pay gap, and a long history of harassment and discrimination against women. Before the local tech giant Entrata ousted its chief executive David Bateman in 2022, he dated staffers and railed against a local politician who consulted with Bateman’s then-girlfriend about suing him over sexual-harassment claims. An Entrata spokesperson declined to comment for this story. That same year, Josh James stepped down at Domo after a former employee accused him of plying her with alcohol and then groping her breasts over her clothes on a business trip. The police investigated, but the local prosecutor determined there was “not sufficient probable cause to move forward.” James returned as chief executive of Domo one year later.

For many, Warnock is a soft-spoken business magnate whose investments have created thousands of tech jobs across the flyover states. But some in his orbit, particularly women, told us they felt as though his old-fashioned machismo put them in compromising positions.

B-17 spoke with more than two dozen people with direct experience with Mercato and Warnock, including 21 current and former employees who worked at the firm over the past decade. They all spoke on condition of anonymity, fearing retaliation for speaking out. This article uses pseudonyms chosen by B-17, which is aware of the women’s real identities.

During the reporting of this story, Mercato hired a crisis PR firm to engage with B-17 reporters. In May, Warnock acknowledged at a meeting of senior leaders that the company had paid out claims to two employees, including Moore, according to two people with knowledge of the meeting. Then in June, Warnock told Mercato staff that he would begin stepping back from day-to-day management of the company.

Tall and bearded, Warnock is regarded as the “Gandalf” of Silicon Slopes and a bit of a maverick among the local tech industry’s old guard. He considers himself an active Mormon who collects and restores muscle cars and guzzles White Monster energy drinks garnished with lime. On some weekends, Warnock likes to fly groups of employees and executives on his private plane to The Thermal Club, an ultraexclusive race track in the Coachella Valley. Other times, he’s drifting about Lake Powell on his luxury houseboat, named Portfolio.

Decades before the coastal private-equity firms began scouting investments along the Wasatch Front, Warnock was writing personal checks into nearby fledgling businesses. The story goes that after an established venture capitalist tried to squeeze Warnock out of a deal, calling him a “two-bit angel investor,” Warnock doubled down. In 2000, he helped raise about $120 million for a brand-new firm, vSpring Capital.

That firm collapsed within a decade as partners became distracted by side hustles, but not before they pushed Warnock out, according to two people familiar with the matter. Warnock got right back up. In 2007, he and Alan Hall founded a new firm with the goal of bringing local growth capital to the Beehive State. They named it Mercato, the Italian word for market.

For an aspiring investor in Silicon Slopes, Mercato Partners seemed the place to be.

In a job interview, Emma Jackson joined a video call with Warnock while he was bobbing on his houseboat, eating pretzels in a white tank top. Later on the call, he asked the young woman whether she was married or wanted children, and went on to warn that the demands of the job didn’t mix with motherhood, according to a source familiar with the incident. Jackson brushed it off and took the job.

Three other women shared similar experiences with B-17, and one person said when a female employee announced her divorce, Warnock told her to start looking for another job because she wouldn’t be able to keep up as a single mother. A spokesperson for the firm said Warnock and others did not recall the incident with the divorced employee and dispute that it occurred.

“Mercato Partners is a high performing organization that places a premium on the quality of an individual’s output and their level of commitment to our limited partners,” the spokesperson said. She also acknowledged, “Over the course of his long career, Mr. Warnock has received feedback on and become increasingly sensitive to how best to communicate during job interviews the expectations and demands customary of being successful in private equity.”

When Warnock looked to hire a contractor to assist with social events, he told staff in an internal message seen by B-17, “Since the guests and Mercato hosts are most likely male, females are preferred to add to the experience,” ideally candidates with “fewer kids.”

Though the position demanded someone who would be available on short notice and outside business hours, a spokesperson said about the posting, “In hindsight, Mercato acknowledges that the wording of the request could have been improved to make the intent clearer.”

Three months into the job, Jackson was flying in the cockpit of Warnock’s plane on the way to the race track, according to a source familiar with the incident, as well as a written declaration from Warnock. He asked about her holiday plans. Jackson became emotional as she told him that she and her boyfriend had broken up.

Warnock’s hand dropped to her thigh and held it, the source said. Jackson froze. She didn’t want to make a scene in front of her colleagues sitting in the back of the plane.

Jackson’s experiences with Warnock formed the basis of an EEOC complaint that she filed against Mercato in January 2023, after her employment ended, according to documents obtained by B-17. The EEOC did not pursue the case, and the firm did not reach a settlement with Jackson, who declined to speak with B-17 on the record.

Jackson’s complaint says she “was afraid to complain about the harassment” for fear of retaliation, though Jackson said she talked to her manager about her discomfort working with Warnock, which she attributed to inappropriate touching by him. This past March, the agency dismissed the charge on the basis that “a person subjected to harassment must notify their employer,” and informed Jackson of her right to sue on her behalf. No suit was filed.

A spokesperson for Mercato said Jackson “never reported harassment of any kind until after her employment was terminated,” and provided a statement from her manager saying the employee “expressed no concern.”

In a declaration that Warnock wrote and provided to the EEOC during its investigation and that B-17 obtained, he wrote, “I attempted to console her by speaking words of comfort, and I may have touched her with my fingertips on the outside of her thigh in an attempt to express my concern in her moment of distress. Other than that, I deny any other touching.”

On some weekends, Warnock likes to fly groups of employees and executives on his private plane to The Thermal Club, an ultraexclusive race track in the Coachella Valley. 

Warnock blurred other lines with his staff, a dozen former and current employees said. At the conference table, Warnock sat close enough to Moore to rest a hand on her armrest or sling an arm around her — sometimes in front of her husband, who was also an employee, according to four people who witnessed him doing so. Another colleague said Warnock gripped her thigh under the table during meetings. When she reported Warnock’s physical affection to a Mercato executive, the employee said, her complaints were dismissed.

“Mercato is committed to maintaining a work environment that is free from harassment, discrimination or retaliation,” a spokesperson said, adding that a review of the firm’s records and interviews with management found no evidence or recollection of this employee’s complaints.

But several employees regarded Warnock as a hugger. “He said to me early on, ‘I like to give hugs,'” one former employee said. He asked her whether she was comfortable being hugged. Though he gave her an out, “it felt expected,” she said. “Even if someone tells you something’s not expected, he’s the boss.” Another former employee shared a similar experience with B-17.

Half a dozen people also said Warnock liked to give bear hugs and massages to his personal assistant of 18 years, Melissa Walred, and two people saw them holding hands in meetings. Through a spokesperson, Walred disputed any claims of misconduct by Warnock.

“I believe the former employees who have alleged that Greg acted inappropriately are stretching and twisting the truth in retaliation or for financial gain, or both,” Walred said. “I have spent countless hours with Greg in office, at home, on trips, in groups, alone, in every conceivable situation and he has always been a gentleman.”

A spokesperson added that “any insinuation that Mr. Warnock and Ms. Walred’s relationship is anything other than professional is completely unfounded.”

B-17 also talked to four female former employees who said they neither experienced unwanted touching nor saw it happen around the office.

In an industry where women often find themselves on the sidelines, the tech landscape in Utah is further complicated by the state’s macho culture, according to sources familiar with the scene. They say the complaints from female Mercato employees are emblematic of religious and social norms that place women in the home. “Greg is not this character that stands apart,” said a female investor in Salt Lake City, who asked for anonymity so she could speak freely.

Still, stories about Warnock’s conduct in the workplace have sparked local attention.

For years, four of Utah’s largest venture firms shared an office park in Cottonwood Heights, where employees compared notes about the goings-on of one another’s firms. In June, Pelion Venture Partners, one of Utah’s oldest venture firms, held a meeting on sexual harassment — a general partner told staff that Warnock was why they had the meeting, two people familiar said.

There’s now a changing of the guard underway at Mercato.

Mercato Partners no longer promotes Savory Fund or Prelude on its website following an organizational shake-up.

On Monday, June 10, employees gathered in a conference room overlooking the mountain range for their weekly meeting. Warnock had just returned from Tibet, and an employee noted that he seemed more chipper than usual. He shared photos of his trip.

It hadn’t been an easy few weeks for the staff. The firm had been passed over to invest in a hot cybersecurity startup, and word had gotten around that journalists were investigating Mercato’s cofounder. Then, a gleeful Warnock dropped the news to his staff.

Three people familiar with the matter said Warnock announced he would be scaling back his responsibilities. He said he’d untangle himself from operations — passing the torch to a group of senior leaders including the managing directors Joe Kaiser and Ryan Sanders — and focus exclusively on growth investing and working with their portfolio companies. He also said he planned to work from home more. His transition has not been previously reported.

Mercato removed Warnock’s name from its website’s investor page in June, after the firm became aware of B-17’s reporting on the allegations against him. After B-17 inquired about the removal, Mercato reinstated him to the investor page in July.

“Regardless of where his bio appears on the Mercato website, as Co-Founder and a Managing Director of Mercato Partners, Greg Warnock is focused exclusively on Mercato’s investment, portfolio construction, and value-add strategies,” a spokesperson said.

Mercato is changing shape in the wake of Warnock’s succession.

The firm had previously raised funds across three investment strategies: growth, early stage, and food and beverage. In June, Mercato’s website scrapped mentions of a stand-alone fund called Savory Fund, which invests in restaurant concepts such as the “dirty soda” shop Swig and the Hawaiian-style eatery Mo’ Bettahs. However, a person with direct knowledge said Savory actually separated last spring, and a securities filing shows Warnock is not a managing director of the latest third fund.

Now, according to three people familiar with the matter, Warnock’s son Davis Warnock, a managing director, is spinning out the early-stage fund, Prelude, from his father’s firm. Davis will continue to manage the fund’s investments under a new name, Victor Charlie, a spokesperson said. She added that the rebrand came about after a “lengthy period of deliberation” and in connection with a trademark battle with a similarly named hedge fund.

“For most of his career, and more purposefully over the last three years, Mr. Warnock, who is 64 years old, has been working towards a smooth transition to the experienced team that will take Mercato into the next decades,” a spokesperson said. “As part of normal-course succession planning, Mr. Warnock and the team began informing investors at the end of May of his decision to step back from the firm’s day-to-day operations to focus exclusively on Mercato’s investment, portfolio construction, and value-add strategies.”

According to interviews with former employees and public records seen by B-17, Mercato’s investors, or limited partners, include The Larry H. Miller Company, Missouri State Employees’ Retirement System, Texas Municipal Retirement System, Nationwide Insurance, American Family Insurance, Los Angeles County Employees Retirement Association, and Saudi Aramco. A spokesperson for TMRS said the pension fund invested in one Mercato fund in 2016, and a spokesperson for The Larry H. Miller Company declined to comment for this article. The other investors did not respond to requests for comment.