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
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