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The rise of tech ethics in private markets

We were lucky enough to have Dama Sathianathan speak at September’s community meet up. Dama is a partner at Bethnal Green Ventures (BGV), Europe’s leading early-stage tech for good VC, backing ambitious founders using technology to tackle pressing social and environmental challenges at scale. At BGV, she leads on community and networks, driving BGV's efforts to act with integrity on diversity, equity and inclusion in helping founders from underrepresented backgrounds access capital and fuel the wider tech for good movement across the UK.

Dama previously worked for international NGOs using digital and data for good and has a background in international relations and global development. She's also a Trustee at Chayn, a non-profit building open-source products and services for survivors of gender-based violence and domestic abuse.

If that wasn’t incredible enough, Dama also kindly shared with us her speaker notes from the meet up where she shed some light on the rise of tech ethics in private markets. So, grab a coffee and set aside some time, as you’re going to want to take this in…

My name is Dama, my pronouns are she/her and my visual description is I’m a brown woman, wearing a blue blouse and bright red lipstick. I’m a partner at Bethnal Green Ventures, which is Europe’s leading early-stage tech for good venture capitalist firm. For the past four years, I’ve been working in the for-profit social impact space, but prior to that I worked for international NGOs in global development and humanitarian assistance, so if you ever need to know what to do when you’re being kidnapped or need first aid whilst you’re being shot at, I can help.

So this talk came about because Alice and I have a healthy dose of skepticism when it comes to investments in private markets, and had a few discussions about the rise and popularity of ESG investing (which focuses on environmental, social and governance) in companies.

But it’s also been prompted by a book I’ve been reading by Xiaowei Wang, author of Blockchain Chicken Farm. And in it they tell tales of various tech innovations in China and how it intersects with politics, different notions of privacy and security, and how individuals from all walks of life adapt to the increasing digital first approaches to everything we do and challenging the narrative that tech has equalising effects, which is quite pervasive in startup land (and I say that fully knowing that I work at a company investing in “tech for good”). The irony is not lost on me, and we can have a whole different conversation about why tech for good is or isn’t a terrible term, but I’d like to point out that our investment thesis is pretty much vested around the idea that we want to invest in founders using technology to contribute to a sustainable planet, a better society and healthy lives. Because let’s face it, we’re fucked. The world is burning, people are pushed into extreme poverty, so we actively need to be more conscious about the investments we make and ensure they have a material effect on important positive outcomes for underserved people and the planet.

For this talk, I really want to focus on venture capital (which is only a small proportion of private market financing), but because it’s also focused on early-stage investments (ranging from ideation, or what’s commonly referred to as pre-seed to a company going public), that’s the space where we can influence tech ethics early on. But also because that’s the industry I work in and where over the last few years there’s been a significant increase in impact investing, and now ESG investing as well.

Also just a note on the use of the phrase tech ethics here. I’m pretty much leaning on the definition as suggested by Hattusia, which is about “establishing an ethical framework to guide strategy and decision-making from the conception of an idea to a shipped product.”

The world is burning, people are pushed into extreme poverty, so we actively need to be more conscious about the investments we make and ensure they have a material effect on important positive outcomes for underserved people and the planet.

Presumably, all of us interact with the public and private sectors every day. Whether you’re buying groceries online, driving on the highway, using social media, dating apps, etc. we all use services and products from public and private companies.

The difference however with private companies, only professional or accredited investors can invest in this market, they are less heavily regulated, don’t always have to report on their performance (unless they are a BCorp), and generally it’s hard to find information about them.

A recent report from Amnesty USA highlights that none of the world’s top ten largest VC firms have sufficient human rights due diligence policies in place. And that’s enabled an environment where VC funding has fuelled the growth of companies that sell their products to repressive governments and cause or contribute to human rights abuses.

Let me give you a few examples that were highlighted in their report.

For instance, “VC-backed technology companies provide spyware equipment to the Chinese government, which surveils the Uighur population in Xinjiang”. Companies relying on ‘gig economy workers’, such as Deliveroo and Gorillas also receive critical funding from venture capitalists, despite employees often facing exploitative and abusive work conditions. In 2021 alone, during a global health and economic crises, VCs in Europe invested over 1.6BN into these types of companies, because obviously you need your arrabiatta sauce in less than ten minutes than you know, access to the vaccine.


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There’s also the “increased risk that companies are being funded that develop new frontier tech with significant negative impact on human rights”, eg. The application of AI/ML tools that amplify existing societal biases and discrimination.

As Ruha Benjamin says in her book Race after Technology: “Amid so much suffering and injustice, we cannot resign ourselves to the reality we’ve inherited. It is time to reimagine what is possible.”

And there’s a possibility to make venture better with a rise in impact investing, which are investments “made with the intention to generate positive, measurable social and environmental impact alongside a financial return” and ESG investing, which are investments made to mitigate ESG risks and potential harms, there’s an opportunity here to adopt a tech ethics lens to investing. In fact, the funding landscape is only growing.

According to GIIN’s 2020 Annual Impact Investor Survey, the full impact investing market size is $715 billion, covering the assets under management (AUM) of over 1,720 organisations globally. The IFC estimated investor appetite for impact investing to be as high as $26 trillion, of which nearly $5 trillion (19%) is in private markets, involving private equity (PE), non-sovereign private debt, and VC.

So how can tech ethics feed into this?

We can adopt a tech ethics lens to investing across the entire investment process lifecycle. From developing your investment thesis and figuring out how it aligns with your investment model (scale doesn’t matter to all impact investors, as there a wide spectrum of returns expectations), to screening deals, and doing your due diligence, and helping your companies with the right support to build responsible tech for good businesses, to even thinking about what a responsible exit looks like. There are many ways.

But VCs can’t do it alone, it’s still a very homogeneous group of people. So we need more people like you to influence the industry and work with VCs. Work with VCs can manifest in different ways, at BGV for example we get people involved as mentors on our Tech for Good programme to help founders build tech for good businesses. And we desperately need more people in the non-profit tech ethics space to work with and advise these companies.

And to quote the wonderful Xiaowei Wang, “Just as platforms offload risk onto the gig economy workers, unchecked capitalism creates economic inequality and offloads the risks and fears onto all of us.”

So let’s create meaningful ways for some checks and balances in a market that’s traditionally gone unchecked.

Key links

What is tech ethics by Hattusia

Blockchain Chicken Farm by Xiaowei Wang

Race After Technology by Ruha Benjamin

Risky business: top 10 leading venture capital firms failing in their responsibility to respect human rights by Amnesty USA


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