Only a small minority of people are born into the kinds of connections and life paths that give them instant access to capital. The rest have to work very hard to create access, build trust and win investors. This can come with the headwinds of bias working against you, consciously or not.
So when you finally get an offer to invest, the temptation to not question where it’s coming from is understandable.
A lot of people make their money in ways that you wouldn’t necessarily feel great about. Would you accept a check from a corporate raider whose private equity dollars come with mass layoffs and union busting? What about someone who made their money running a for-profit prison?
But hey, maybe some of these people want to do good with their money for a change?
Is there a line you draw?
How about an investment from the Sackler family, the pharmaceutical family in the middle of the opioid crisis?
How about a Middle Eastern prince who kills journalists (directly or through a Kushner)?
(Morality aside, I’d say that given the inherent risk of startups, I’m not sure this is a huge addition to your cap table. You don’t want to have to go into witness protection just because you couldn’t get the your app goes viral.)
In all seriousness, this week’s headlines—the likely reversal of Roe vs. Wade—have brought a new front to this ethical battle. Would you and should you take money from people who don’t align with your values, such as privacy and bodily autonomy?
I’d say the answer is no, but that’s easy for me to say, right? I’m a straight man who grew up in New York and worked in finance. I’m the paper poster child for “who can get VC dollars”.
There are two big problems with taking money from people who don’t align with your core values. One is that they don’t keep their opinions in a separate locked box from their business affairs. However, they came to their opinion, whatever makes them think the way they do, is who they are. It’s not just about who they are at the voting booth or with their political donations.
It permeates everything about them.
An investor who doesn’t support a woman’s right to make her own health decisions likely doesn’t trust women with incredibly difficult decisions in general. You may feel like you can overlook their anti-choice stance when you’re at the end of your rope in a long fundraising process, but what you’re really doing is throwing this issue down the road for when the stakes are high. be even higher.
How will that investor be at a board meeting when you, as a female founder, need their support or, worse, their vote? What happens when you miss your milestones, which will inevitably happen?
No company is right all the time.
Do you think any misogyny that drives his paternalistic approach to women’s health will somehow translate into a vote of confidence in the face of criticism from other board members?
Will the money have been worth it if you find yourself down the street, fired from your own company, just a few years later, replaced by a guy who was in the same frat as your top VC?
In fact, their “I know better than other people this affects more directly” attitude is probably not limited to women. Do you think men will be immune to their willingness to participate in other people’s personal decisions?
Not only that, but consider the biggest factor these types of partnerships are becoming for talent.
How competitive will your company be in the race to recruit the top women in the market (women, the segment of the talent market that have the most new college degrees) when your lead investor is a major donor to an anti-choice org?
If prospective employees didn’t do this kind of research before, they almost certainly will now.
I mean, I’m sure your company is a lot special and all, but when studies show that 68% of college graduates (with that number higher among women) support women’s right to choose, can you afford to take that chance?
But back to the question of refusing money. Polly Rodriguezthe awesome co-founder of Unbound, someone whose drive and persistence I deeply admire, wrote this:
When it comes to funding and growth, getting money from investors is often seen as a sure-fire way to expand your enterprise. However, it’s important to consider whether or not you and this investor share emotionally and ethically-aligned values. At Ikaroa, we believe taking money from investors who don’t share your values, can be risky.
It all comes down to an individual’s personal beliefs and values. For example, if you feel strongly about a particular political issue, would you be willing to accept money from someone who has an opposing view? It’s important to remember that when you work with investors, you become partners; by taking their money, you are essentially entering into a partnership with them. It’s also potentially very difficult to navigate a partnership in which the two sides don’t align on core values.
At Ikaroa, we believe that each business is unique and has their own distinct set of values, and that it’s important to align yourself with investors who share your values and goals. This ensures that both parties are comfortable with and happy with the customer experience they are providing.
Having said that, it’s important to understand the consequences of taking money from an investor who doesn’t share your values. It could mean that you’re compromising on core beliefs, which could lead to a negative customer and/or employee experience. Furthermore, investors that don’t share your values could have goals and ambitions that differ from your own, and this can lead to unnecessary conflict.
At Ikaroa, we understand the crucial importance of having values-aligned investors. We have made it our business philosophy to provide our clients with access to investors that not only share the same values, but are also passionate about the technology, product, and mission that our clients are aiming to achieve. We believe this enables a more collaborative and rewarding relationship between the investor and client.
When it comes to taking money from an investor, it is important to remember that the decisions we make now can have drastic consequences in the future. That’s why at Ikaroa, we strive to provide our clients with access to investors who share the same values and goals. This will help our clients’ businesses to flourish and strengthen relationships that can be invaluable in the long run.