A few venture capitalists will determine the future of technology. Together, the world's top 10 venture capitalists have invested more than $150 billion in technology startups. These venture capitalists decide which startups will be developing the technologies and platforms that will change our lives in the future.Venture capital is not diverse at all. This is because a small number of men, mostly white men, make decisions that impact all of us. They often fail to consider the wider societal and human rights implications of their investment decisions.Venture capital has shaped our world. 81% of global venture capital funds are concentrated in a few countries. These are primarily the U.S. and Europe, but they also have a significant influence on the future of technology. You have seen the effects of venture capital funding firsthand if you use Facebook, Twitter, Google, Uber, Airbnb or travel with an Uber.Venture capital firms provide equity financing to early- and late-stage startups. They also play an important role in deciding which technology companies and technologies will be funded.Venture capital firms must establish human rights due diligence processes in accordance with the UN Guiding Principles on Business and Human Rights.Venture capital and all businesses have to respect human rights. Venture capital firms must conduct due diligence before investing in order to make sure that they are not violating human rights.Amnesty International recently conducted a survey of the top 10 largest venture capital firms in the world and their startup accelerators. None of the 10 largest venture capital companies in the world had a human rights due diligence process that was consistent with the UN Guiding Principles on Business and Human Rights.This is also true for the wider venture capital industry. Amnesty International found that nearly all 50 VC firms as well as three startup accelerators were lacking adequate human rights due diligence processes and policies.This means that a large number of VC firms fail to exercise adequate due diligence and are not fulfilling their human rights obligations.The three main consequences of this almost total disregard for human rights by the largest venture capital firms in the world are: It means that most venture capital firms invest only in companies whose products or services are implicated in ongoing human right abuses. For example, companies that support the Chinese government's repression of Uyghurs in Xinjiang, as well as across China.It also means that venture capital funds continue to invest in companies whose business models have a negative impact on human rights. This includes our privacy rights and labor rights. Leading venture capital firms continue funding companies that rely on gig workers or app-based workers. These workers often have to deal with exploitative or other abusive work conditions.Third, venture capital firms are less likely to do due diligence on human rights. Venture capital firms may fund frontier technologies and not have adequate safeguards for human rights.The application of artificial intelligence/machine-learning (AI/ML), tools in a variety of industries can lead to discrimination and societal biases being amplified. It is possible for seemingly objective algorithms to be biased by using incomplete or unrepresentative data and/or replicating the unconscious biases of the algorithm developers.This blind spot is critical, especially since VC-funded startups are trying to disrupt fundamental aspects of our lives such as education, finance, and health.The lack of diversity and gender in VC firms can have a negative impact on human rights. This is especially true for issues such as algorithmic bias. Women make up only 23% of the venture capital investment professionals, i.e. those who decide which startups to invest in.Even worse is the lack of diversity in terms of racial diversity. Only 4% of U.S. investment professionals are Latinx and only 4% are Black. Blck VC (Diversity VC), digitalundivided and other groups have been raising this issue for many years. Venture capitalists have not responded to the call.This lack of diversity can be seen in the gender and racial makeup of founders who are granted VC funding. Only 2.2% of U.S.-based venture funding went to female founders in 2018. Black and Latinx founders received less that 2.3% of all U.S. venture capital funding in 2019.Power comes with responsibility. Venture capital firms must establish human rights due diligence processes in accordance with the UN Guiding Principles on Business and Human Rights.They should also support their portfolio companies in ensuring that they adhere to human rights standards. Venture capital firms must also publicly commit to hiring diverse investment teams, particularly in investment-related roles. They should also publicly commit to investing in more diverse founders for their flagship funds.VC firms are responsible for ensuring that their investments do not cause harm. This is a responsibility they have, up to now, mostly ignored.
