Next month, Tech City UK will host an event that puts ‘bad’ VCs and founders under the microscope and asks what can be done to weed out bad behaviour and encourage good culture. The event will consist of two panel sessions – one featuring VCs and the other consisting of founders. Both panels will consider three areas.
The tech industry and its self image
The tech industry likes to think of itself as an industry devoted to changing the world for the better but a critic could argue that in fact it puts outsize returns above morals. Is the industry being honest with itself? Does the tech industry have a self image problem?
Another fundamental principle of the tech industry is that it is a meritocracy. It’s guided by data and filled with smart people who want to find the smartest people to join them but is that really the case? As the anti-diversity memo, written by a then-staff member at Google, shows, the industry has a its share of those who think women and people of colour are in the workplace only because of “positive discrimination”. How entrenched are those views and to what extent are they held by gatekeepers and others with power?
Looking at the industry as a whole, we will ask why it has been so hard to weed out the ‘bad’ people. How can inclusion be addressed at all levels of the industry? Why has the industry only been forced to act now? Is it because of a growing awareness of the need for change or simply because there are more tools for exposing bad behaviour?
There are two elements to consider here: first, the behaviour of VCs themselves, and second, their role in monitoring the behaviour of founders.
VC has typically been a club, dominated by small groups of largely similar people who all know one another. Often when clubs are criticised the members tend to band together, rather than trying to improve behaviour. Is that how VCs have tended to act and is that changing? Is there enough oversight of VC behaviour? How can oversight be improved?
There is some suggestion that more diverse VC firms might help to deal with these issues. To what extent can diversity and inclusion be incentivised? Are diverse VC firms more likely to attract the hottest startups? Is a broadening of funding sources more likely to encourage good behaviour?
For the second element of this part of the discussion, we will consider whether VCs’ incentives aligned with creating a good corporate culture. Is there a tension between the need for VCs to drive returns and the need to guide founders? To what extent is it VCs’ responsibility to encourage good governance? Finally, what is the role of boards in endorsing good behaviour and blocking bad?
Founders are often portrayed as iconoclasts of the business world, disrupting industries with little regard for incumbents, regulators and traditional ways of doing things. But to what extent do those characteristics mean that they are willing to indulge in or tolerate toxic behaviour if they believe the payoff is worth it? For example, being driven to grow as quickly as possible might mean turning a blind eye to a bad corporate culture.
On the other hand, perhaps the problem has nothing to do with the personality of the founder. After all, founders come from all kinds of backgrounds and have all sorts of experience. In a company that is undergoing hyper growth it is difficult for anyone to ensure that governance keeps pace. So is the problem managing in an environment of hyper growth? How do we ensure good governance processes that keep pace with growth?
Should founders ensure that their company has a code of ethics that is known to and understood by staff at all levels? How does such a code keep pace with growth? And how do you ensure that breaches can be reported without risk of reprisals?
Finally, what does a good relationship with the board look like? How can founders do more to work positively with the board? How can the board encourage a good company culture?
This event will bring together VCs and founders – people with first-hand experience of dealing with these issues – in what is sure to be a fascinating discussion.