What do you think when you hear this:<\/p>\n\n\n\n
\u201cValue creation requires investing in companies that design for people; manage for trust and accountability<\/span>; build products that benefit people fairly<\/span>, and thereby grow sustainably. We want to invest in companies that aim to become the gold standard in building privacy<\/span>, security<\/span>, fairness, and inclusivity<\/span> into their products and processes. We require our portfolio companies to respect human rights<\/span>, as well as the norms and values of the people and communities they serve.<\/span>\u201d<\/em><\/p>\n\n\n\n Sound like a typical venture capitalist to you? Me neither. Nevertheless, a group of 25 VCs recently adopted<\/a> these principles to guide their investment decisions. What’s going on here?<\/p>\n\n\n\n I have a bit of insight here, because I was able to participate in two of the meetings of this Race-To-The-Top initiative, representing the point of view of an entrepreneur who believes he is building privacy-protecting, secure and fair products. The kinds of entrepreneur who has not pitched his business<\/a> to any VC at all exactly because I cannot make a privacy promise to my customer, take the customer’s money, then take venture money, and 6 months later the VCs force a change of direction (as it happens so frequently) and all the privacy promises are out the window.<\/p>\n\n\n\n Best I can tell, these guys are serious, and I’m majorly impressed. It boils down to saying: no, we will not insist on getting the last fraction of money out of our investment at the cost of screwing the customer over. Their motivation, to be sure, is financial: by not screwing the customer over, and promising not to do so, privacy-conscious consumers are far more likely to use the products of the startups they invest in, so they win.<\/p>\n\n\n\n Is that a big enough market? Traditionally: no. But it’s changing: in a recent survey<\/a>, 58% of participants agreed with the statement: “The privacy threat is a crisis, and we need to force companies to change.” 58%??? <\/strong>The Race-To-The-Top VCs may be way ahead of their fellow VCs, but the market seems to be even further ahead. Sounds like a sound investment opportunity to me.<\/p>\n\n\n\n