The future of technology is determined by a handful of venture capitalists. The world’s 10 leading venture capital firms have, together, invested over $150 billion in technology startups. The venture capitalists who run these firms decide which startups today will develop the new platforms and technologies that will shape our lives tomorrow.
There is a startling lack of diversity within the venture capital sector. This means that a small group of men — predominantly white men — make decisions that affect all of us. Unsurprisingly, they all too often ignore the broader societal and human rights implications of these investment decisions.
We all live in a world shaped by venture capital. As of 2019, 81% of all venture capital funds worldwide are clustered in just a handful of countries, primarily in the U.S., Europe, and China, which in turn are shaping the future of technology. If you spend time on Facebook or Twitter, use Google, travel in an Uber, or stay in an Airbnb, then you’ve experienced firsthand the impact of venture capital funding.
Venture capital firms, which provide equity financing for early- and growth-stage startups, play a critical gatekeeper role, deciding which new technologies and technology companies will receive funding.
Venture capital firms need to institute human rights due to diligence processes that meet the UN Guiding Principles on Business and Human Rights standards.
All businesses — including venture capital — have a responsibility to respect human rights. Therefore, to ensure that their investments are not undermining our human rights, venture capital firms must conduct due diligence processes before making investments.
Amnesty International recently surveyed the world’s largest venture capital firms and startup accelerators. Of the world’s 10 most prominent venture capital firms, no one had an adequate human rights due diligence process that met the standards outlined in the UN Guiding Principles on Business and Human Rights.
Unfortunately, this is true of the broader venture capital sector as well. Overall, of the 50 VC firms and three startup accelerators analyzed by Amnesty International, we found that almost all of them lacked adequate human rights due diligence policies and processes.