Corporate Responsibility 2.0 — Social Justice in Startups
VC-backed companies can’t wait until IPO to start thinking about social responsibility.
Company values and investor compatibility
What are your company’s values? No, not that toothless copywriting about reliability or whatever on your Careers page.
I mean the soul of your company.
If you can’t answer that as a founder, I implore you to do some soul searching — especially before fundraising.
Beyond fluffy corporate responsibility
Companies once organized philanthropic initiatives for PR. Curing cancer. Research foundations. Ending homelessness. Housing stray animals. These are all good causes. But, are these issues core to the company values or identities? Onboarding and company procedures? Are they a source of pride for employees? In most cases, no.
Tech founders are beginning to understand there is a craterous need for socially responsible corporations. It’s exciting that fellow founders and investors understand why this matters.
Female founders, known to outperform male founders, have a more nuanced appreciation of social issues and systems interconnected with the workplace. Consequently, womxn likely have a competitive lead in intuiting the links between company mission, values, and social impact opportunities. If true, operationalized, social justice-driven paradigms may emerge rapidly from female-led startups.
Authentic commitments to social change may also prove essential for consumer sales rather than a “nice to have.” Ethically-sourced foods and environmentally-friendly products are all the examples needed.
In the ten years since my career bumbled into tech, I’ve witnessed the swing from differentiation in ultra-competitive hiring landscape using keg-in-the-breakroom and vanity perks to emphasizing we-are-on-a-mission-to-improve humanity. Missions have a wide aperature. IOT, health tech, mental health tech, childcare, financial wellness, even music tech.
Corporate responsibility must be served as a concentrated shot of cultural revolution to engage the best gen z talent, but there’s grist for the mill. While not a universal rule for employees, the best talent — the people we fight over as founders and want desperately to join our respective missions — are gravitating to work that rewards them with a sense of purpose.
As business founders and funders, we are each in positions of responsibility and privilege. Venture capital increases our responsibilities to do the same for neighbors, employees, and customers who keep our businesses alive.
Setting aside that millennials and gen z consumers weigh corporate responsibility in purchasing decisions (read: it is smart business), if a neighborhood florist can commit to changes with substantive economic stakes, my startup can.
And should.
By way of a single example, Techstars prompts their portfolio companies to consider the 1% challenge. For all the programs I’ve been a part of locally, regionally, and nationally, though, I rarely hear this topic discussed in concrete or practical ways.
And yet, it is onboarding.
It is company policies.
It is hiring practices.
It is compliance.
It is UX.
Decisions critical to social justice show up in many forms and in every corner of our startups. We can’t wait to become the next Snowflake to prioritize social responsibility — economically or ethically.
That means thinking carefully about your partnerships, fellow founders. You need to know who you’re attaching yourself to and what their values are.
Still, I hear this frequently: “Beggars can’t be choosers.” This advice is given so flippantly you might think founders should take checks anywhere we can find them — even if it means doing a deal with the devil. Or White Supremacy sympathizers.
Remember, your company does have a soul.
If that seems hyperbolic, you haven’t seen how predatory deals can get. Power dynamics favor investors necessarily and this conventional advice is a symptom of this chronic imbalance. It is advice out of time, seemingly atemporal, blind to current events.
And if one thing can be said for 2020 — there are a damn lot of current events slapping us out of our dreamscapes.
Today, for example, the Kentucky Attorney General announced no charges would be brought against the police officers that killed Breonna Taylor. It’s outrageous. And, it’s in my backyard. One local investor with an event this week, to their credit, told founders they know this is a difficult time in Louisville and they are pausing promotional campaigns.
This matters.
What’s happening in the world as new companies are created, seeded, and soaring influences life and death — both metaphorically and literally. No body cams were worn by the police. They could have been. That’s a technology that may have changed the outcome of this appalling decision. Similarly, AI being used in police work has many social implications.
Unrelated to police conduct, there are endless examples of the ways tech founders must decide how to develop, test, commercialize, distribute, scale, produce, and support their innovations. In some cases, we must consider how to limit the power of our creations. In others, we will consider how to increase the leverage of our tools, even when the immediate fiscal benefits are unclear.
Decisions critical to social justice show up in many forms and in every corner of our startups.
How will your investors respond in 3 years if faced with unicorn dynasty decisions like these, in a world where it’s increasingly difficult to quantify amorphous market opportunities?
Prioritizing social responsibilities
Advice that I should go on building, with no regard for the social injustices around me, regardless of my company’s direct capitalistic mission, is bewildering.
Many investors are good people. I’m certain of this. I’ve been pleasantly surprised by the change-makers in VC.
There are also those I would not want leering at me as though I’m Don Draper’s secretary, nor drudging me through multiple rounds of unjustified due diligence. I don’t want scrutiny on corporate ethics and morals if it centers on why they exist.
Investors appear to unfairly favor men over women when it comes to pitches, according to research by The Harvard Business Review. That report clashes with data from BCG research showing that women return twice as much revenue per dollar invested than men. And while men get asked more questions on their positive aspects, I know from experience that women tend to be asked about potential downsides of investing with them, and about how they’re going to achieve “balance,” with work.
- Excerpt, “Only 3% of Business Investment Goes to Women, and That’s a Problem for Everyone,” Crunchbase 2020
There’s a third camp. These are the investors I dream of working with. They’re good people, sharp advisors, and appreciate companies are more than the things they make or sell. It’s entirely possible I am still green enough to foolishly idolize them. But their Twitter feeds speak volumes about their nuanced appreciation of how social issues show up in the tech startup world.
Founders who have been paying attention already know all venture capitalists are not created equal. Many understand startups are a vehicle for change beyond the immediate widget, bot, or service. Building a company is not be mutually exclusive from hypergrowth and profitability.
These investors also understand this.
Many of these venture capitalists happen to specialize in impact investing. But, this camp is growing quickly — particularly given incredible Black and LatinX talent in VC, who already know how to thrive outside pattern-matched labyrinths.
Speaking of Black VCs, #HireandWire is a key example of social and economic justice within private enterprises and across an entire industry.
What can founders do?
I know for many of us, survival in the pressing thought day in, day out.
But, as we envision and build the companies we pitch and lose sleep over, the palpable realities in the air tonight in Louisville are haunting. We must face our metaphorical demons or risk colossal capital and ethical crises, a la WeWork.
Recent protests in Louisville denouncing gentrification are evidence that even small and unstable business owners can lead to powerful changes.
The founding team of Enriched Couples has yet to determine what our specific corporate responsibility initiatives will be as a company. But, our hiring practices, product development ethics, and economic empowerment goals mean equality is embedded in our product and culture. I hope other founders know they can take a similar approach. Investors may not prioritize it, but if you do, find investors who support that.
Be a chooser.
It’s imperative each of us think about the ways social justice intersects with our companies. And, it’s imperative our investors understand the stances we take using private enterprise to fill unjust gaps while fighting for systemic changes.
I know I am not alone.
My fellow founders are thinking about this, too. I’m in good company with fellow local startups like MobileServe, who recently announced a community service scholarship.
Especially on days like today — when our public servants and elected officials fail to move society forward — I am inspired by my peer innovators embedding social justice in their startups while fighting for institutional change in their spare time.
Now there’s a joke — founders with spare time.
Annette Miller is the Cofounder of Enriched Couples, the first financial therapy platform for family financial wellness. Focusing on trust and teamwork-building, the platform helps couples forge healthier relationships with money and one another. It blends cognitive-behavioral techniques with financial empowerment for richer relationships with unified financial goals.
