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What are some examples of unethical behaviour in venture capital?

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Dec 05, 2023
1 answer
Accepted Answer
May 05, 2024
Venture Capitalists engage in a variety of conscious and unconscious unethical behavior with different stakeholders. Some example of unethical behavior commonly seen in venture capital include:

Founders / Deals
  • Disrespecting Founders
  • Offering Below Market Financing Terms
  • Hidden Economic Terms in Template Agreements
  • Switching Terms in Diligence
  • Not Marking to Market

Limited Partners
  • Providing Overly Optimistic Return Analysis
  • Using Pre-called Capital for Investments
  • Offering Special Economics or Co-investment to Specific LPs
  • Providing Advantageous Information Rights to Specific LPs
  • Using the LPAC as a Investment Committee
  • Investing Personally in Deals not Cleared with the Fund

Team Members
  • Removing Team Members to Consolidate Gains
  • Engaging in Sexual Misconduct
  • Having Double Standards
  • Not Promoting Talented Team Members

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