The ethics of Venture Capital — Why does it matter (#1)

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I am Dr Johannes Lenhard and I am an anthropologist at the Max Planck Cambridge Centre for the study of Ethics, the Economy and Social Change. Recently, my research has taken me to Silicon Valley to interview venture capitalists.

In over 120 interviews in Berlin, Munich, London, San Francisco and New York, I asked these investors: what kinds of ethics do you have? This bi-monthly blog is a first, half-academic attempt to capture some of my observations.

You can use Twitter to get in touch and also to receive updates about my journalistic writing here.

The ethics of venture investing — why does it matter? (#1)

This morning, my iPhone’s mellow tunes wake me up early; I have been thinking about getting a new ringtone for a while — does Spotify help with that, too? My first thoughts, still in bed, often go to my sleep now — my Oura ring tracks everything but only the mattress I got from Caspar has really had a positive effect so far.

Alexa takes over my music as soon as I am making my Blue Bottle coffee (I really don’t want Starbucks in my home). Today, I am in the mood for a podcast; Brew has the best ones and Siri already learnt how to find good stuff for me there. The lights are on when I enter the bathroom and the thermostat is nicely warm — Nest has really started to do wonders when I finally came around to connect everything. I completely forgot that my Birchbox came yesterday — I was waiting for a new shampoo sampler (last months had a Function of Beauty voucher in it; I still have to fill it out…). I am still with Harry’s for my razors but perhaps I should try the Dollar Shave Club thing everyone is talking about?

Lots of thoughts are running through my head while I apply my Glossier moisturiser (I know, it’s supposed to be for women…). Mexico is on my mind, where I will fly later this week. My AirBnB is booked; people told me that I will be able to get around in Ubers in Mexico City at least. I should check with Safety Wing whether they also cover Mexico — I don’t want to end up in hospital having to pay for it (nor with my Horizn trolley stolen). Curve will work fine and I also got my Revolut card as a backup. Why has there not been a hack for this stupid, bulky passport yet? What if I am hungry at night — will they have Doordash? There must be some lazy folks down there, too…(or perhaps there are just taco shops everywhere? Google Maps will help…).

Just last week I bought a pair of Everlane jeans in their shop in the Mission in SF — they feel great and match my Allbirds. Today is also a good day for the new sunglasses I bought at Warby Parker when I arrived in the US some weeks ago. I look down at my Fitbit as I leave the house — it’s going to be an active day. Let’s do it.


This is not actually what the first thirty minutes of my day this morning looked like — but a lot of it is true or close to the truth (I really don’t like Starbucks). What this really is, though, is a short window in a hypothetical life completely dependent on venture capital. All the companies I mentioned above — from old friends (or foes) such as Apple and Google to completely new companies like podcast app Brew — were originally backed by equity investors called venture capital funds. In order for the startups to become what they now are they raised money from VCs that gave them money based on their ideas and the teamand shared the entrepreneurial risks; at this stage, the venture capital is crucial for the survival of the company that often wouldn’t generate revenue for quite a while. Now the new companies have taken over (‘disrupted’) a lot of the functions big corporates would do for us before (where did you get your coffee before Starbucks? Where did you buy your trainers when ‘sustainable’ Allbirds wasn’t around?) or have added new functionalities to our lives (but honestly: do we really need to count our steps with a Fitbit or an Apple Watch all the time?).

So what? VCs have a massive impact on how our (economic) world looks like (and also on employment, innovation and growth more broadly). We should first understand how venture investing really works (for all those new to VC: check out A16Z’s Scott Kupor’s new book to help with this first step) and secondly ask what influence it has on the world around us. More specifically I want to ask: do VCs have any ethics? Do they try to make the world a better place or are they just making money — for the sake of it and their own investors (called limited partners or LPs)?

This is what I call the ethics of venture capital and what I am setting out to explore further with this blog. While I am going to explore philosophically what ethics might mean in this context in the next post (#2), I will immediately try to find a direct application of the theory in what I call an ‘ethical due dilligence’ (post #3).

Written by

Writing on the ethics of venture capital @Cambridge_Uni; visiting Stanford and NYU; former: PhD on homelessness at Cambridge, MSc at LSE, BA at ZU

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