I love that Wilson gives examples of ethical LPs like pension funds and educational endowments. Much of the criticism here is “well if you refuse to take tainted money then the world economy will grind to a halt.” But think of it... if the business community stopped taking tainted money, holding everyone to a high standard, that would be a powerful force to curb human rights abuses in the world. We do have ethical alternatives.
Who Are My Investors?
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Re: Who Are My Investors?
#62At any business effort beyond hyper local markets, there is virtually no way to avoid tainted money or unethical markets. You're going to have to compromise somewhere. The question is, how and where do you draw the line? At some point as a founder/fundraiser, you will cross paths with finance or supply chains that support exploitation, coercion, violence or illegality. The most successful business people don't seem t…
" there is virtually no way to avoid tainted money or unethical markets."
What is an 'unethical market'?
Oil?
Investors who vote for Trump? Or Clinton?
Who support guns? Or who don't?
Are citizens of Saudi Arabia punished because of the actions of their government?
If missiles come raining down on Ridyahd, and Saudi's destroy the locale/group that did it, is this unethical?
It's such a pandora's box.
But I agree it'd be nice to have some transparency.
Re: Who Are My Investors?
#63I applaud Fred’s efforts here. And I hope other firms follow his lead.
Re: Who Are My Investors?
#64This ball was set in motion long ago when we decided it was appropriate to trade our money with these nations for their oil.
If we ever wanted to see that money again, we were going to be doing business with them in the future.
It's not as if we were ignorant of their dismal records on human rights and lack of democracy.
We've been throwing money at oil-rich nations for a very long time, and now they have leverage in terms of buying power. What do we have to offer in return? They can buy our startups, our land, and our weapons.
Re: Who Are My Investors?
#65Ben Hunt pointedly said in his recent article [0]: "With Saudi Arabia, the ubiquitous private information was that Saudi Arabia is a thug state and their Crown Prince MBS is a wannabe Bond villain. But no one acted AS IF they knew this until a Missionary event – in this case Turkey’s very public denunciations of the Saudi government’s murder of Jamal Khashoggi – turned that private information into common knowledge,…
> He coined the term >common knowledge gameNitpicking here, but "common knowledge" with such definition goes back to late 60s at least [1]
Re: Who Are My Investors?
#66The question posed by the CEO in question, while valid, is futile --verging on naive. To really mean it, you'll refuse: money, investment and goods from China, Russia, Gulf, many African countries, Latin America, etc. to such an extent so as to bring the world economy to a virtual standstill. In addition to refusing money also No Oil from Saudi, Venezuela, Russia, or Goods from China, Minerals from Africa... It's wel…
When you're making a decision to take investment, the assumption is that they may get 10-100x that amount of money back if the company succeeds. So taking investment from a bad regime might give them another billion to work with 10 years from now. That's a different scale from consumer purchasing decisions, where your decisions might move a thousand dollars from the worst regimes if you're careful about investigating the supply chain of everything you buy.
So rather than disingenuous, it seems extremely pragmatic to worry about the $billions more than the $thousands. You should worry about it literally a million times as much.
Re: Who Are My Investors?
#67Pretty much every single comment so far is cynical. "No one really wants to know how the sausage is made", lots of money is tainted anyway, it's just PR fluff, etc etc. The classic HN Middlebrow Dismissal in full effect. Counterpoint: cynicism is too easy. Actually giving a shit is harder, it's uncomfortable, it involves compromise. Yes, if you refuse investment from any country that has ever violated a human right,…
Saying "giving a shit involves compromise" is exactly the kind of thing that venerates the idea that conscious capitalism is impossible. The irony of this post is that he lists the pension fund of the police, who are responsible for some of the most brutal human rights violations in the US, as a wholesome LP, when for some of us it's just the opposite.
Fundamentally everyone in the business community is worried more about ass-covering as it pertains to their bottom-line, not to any real concern about the implications of who they enrich. That's not to say that there's nothing to be done, but anyways... I won't talk about that here since HN has a pretty nasty reflexive response when you talk about the S word.
Re: Who Are My Investors?
#68I love that Wilson gives examples of ethical LPs like pension funds and educational endowments. Much of the criticism here is “well if you refuse to take tainted money then the world economy will grind to a halt.” But think of it... if the business community stopped taking tainted money, holding everyone to a high standard, that would be a powerful force to curb human rights abuses in the world. We do have ethical al…
Its a zero sum game. You might reject the investment but others wont
Re: Who Are My Investors?
#69Pretty much every single comment so far is cynical. "No one really wants to know how the sausage is made", lots of money is tainted anyway, it's just PR fluff, etc etc. The classic HN Middlebrow Dismissal in full effect. Counterpoint: cynicism is too easy. Actually giving a shit is harder, it's uncomfortable, it involves compromise. Yes, if you refuse investment from any country that has ever violated a human right,…
Totally agree. I just hope people will take this sentiment and make it more formalized. But people will have to be up to that task. An explicit movement to refuse money from US allies who violate human rights would have to include Israel -- so, a big ask. A centralized outlet that reports who funds who, like we have for political campaigns, requires sweat and tears. Hopefully we'll see more grass-roots organizations made up of tech workers like Tech Solidarity to take this work on.
I can't act as a leader for change like this in the tech startup sector, but I would be very interested and engaged with any leaders who step up.
Re: Who Are My Investors?
#70Earlier quoted context omitted.
The problem with the global system cracking is that it's pushing this work onto low-information people with mismatched incentives. If the Sauds have routine trouble getting money into funds they'll resort to tricks that will get them exposure in one way or another. They can acquire a company, they can create their own VP that doesn't list investors but co-invests. It's a never ending battle and one that we're not cap…
Just because they have other options doesn't mean the fight is lost before it's begun. We can make this more and more work for them, and keep sending the message. And yes, we can also work to place sanctions on investment from nations that ignore human rights. If we make better and best into enemies, there's no end to what we can't accomplish.
I usually agree with this line of thinking, and even personally I wouldn't take money from some people like Peter Thiel because of his political actions, but I don't try to get others to do the same. I advocate for systemic or political changes or—if those are hard because of mismatched incentives or low information voters—propaganda, think tank funding, and lobbying to try to fix things.
Take plastics use, for example, it's better to focus energy on banning them completely than to check each and every shampoo personally for microbeads.
Better and best are only enemies in situations where better is multiple orders of magnitude less effective than "best" which I wouldn't even classify as "best" I would call it "a real solution that might not be optimal but fundamentally sees to address the problem in a meaningful and efficient way" because I don't think of things in terms of better and best.
I think the reason I don't is that I studied both software and structural engineering separately. In structural engineering the design goals for non-emergency buildings are 1/10k failure rate over 100 years, with visible signs of failure before collapse.
We need steel girders to deal with illiberal states, not popsicle sticks.