McClure's actions were first exposed when entrepreneur Sarah Kunst said the 500 Startups co-founder told of the tech investor's inappropriate behaviour when discussing a potential job.
"I was getting confused figuring out whether to hire you or hit on you," he wrote in a Facebook message, reported the New York Times.
Kunst said when she mentioned the message to one of his colleagues, the company ceased conversations with her.
McClure responded to the allegations in a blog post entitled: "I'm a creep. I am sorry."
The co-founder said he didn't believe he was a bad or evil person, but admitted he probably deserved to be called a creep for his actions to several women.
"I made advances towards multiple women in work-related situations, where it was clearly inappropriate. I put people in compromising and inappropriate situations, and I selfishly took advantage of those situations where I should have known better. My behaviour was inexcusable and wrong," he wrote in the blog post.
He specifically addressed Kunst and, although suggesting he thought their encounters were in a social setting, he ultimately admitted he was in the wrong.
"It was my fault and I take full responsibility. She was correct in calling me out," he wrote.
"For these and other incidents where I have been at fault, I would like to apologise for being a clueless, selfish, unapologetic and defensive ass."
According to Tech Crunch, Tsai and the management team said in a letter sent to limited partners that they felt it was best McClure remove himself from all GP entities and the firm overall.
Tsia said the company had since been made aware of a further sexual harassment report it deemed was unacceptable behaviour and were not confident there wouldn't be any further cases.
The Victorian government has also distanced itself from 500 Startups co-founder after it hosted McClure at a number of Melbourne events to coincide with the local launch of his company.
With the internal investigations not disclosed to the government, an estimated A$2.3 million (NZ$2.4m) was spent from its LaunchVic grant program to bring the accelerator to Melbourne.
LaunchVic chief executive Kate Cornick said she was disappointed it was not "made aware of the matter relating to 500 Startups co-founder Dave McClure", and acknowledges the courage of the women who have spoken out about this issue", reported The Australian.
Tsai admitted both partners and the firm's Australia-based staff had been kept in the dark.
"I want to make it clear that neither LaunchVic, nor the Australia team, were aware of the issues that have recently come to light and learned about it just days ago when it was announced in the press," she wrote.
"We regret the decision to have Dave participate in the program launch and the impact it has had on everyone who so publicly supported us up until this point."
The incident has since sparked a group of prominent men and women in the Australian tech community to address problems with sexism in the global tech industry.
"Accounts of predatory behaviour by investors are not hard to find, even if acting on them fairly appears to have been far too hard for many organisations to respond to appropriately in the past. Not any more," the statement read, reports Business Insider.
"These disturbing accounts give us an opportunity to take a long hard look at the ecosystem and make it clear we do not condone sexual harassment in the Australian start-up community. We call on all founders, start-up executives, investors and journalists to not permit this behaviour, or promote individuals who they know have acted inappropriately towards colleagues or founders.
"The Australian technology community is a warm and welcoming one, which is increasingly diverse. We have a long way to go though, and having a zero-tolerance policy to gendered harassment is critical to our future. We all have a role to play in fixing this. We will hold one another to account."
