VC funds: Nondiscrimination requirements for start-ups

Tech investors are readying for the wave of legislation expected by the new government by uniting in making new investments contingent on a clause preventing discrimination in portfolio companies.

Among the venture capital funds participating in the initiative are: Viola, Pitango, Lightspeed, Vintage, Vertex, Qumra, Dov Moran’s Grove, StageOne, TLV Partners, JVP 83, TPY Key 1, 10D, North, Susquehanna and Team8.

Under the clause “Non-discrimination policy,” Israeli and US funds will demand that entrepreneurs will commit to values of equality as expressed in the Declaration of Independence, abstain from any type of discrimination and will avoid dealings with suppliers that do have discrimination policies.

Some foreign venture capital funds like Susquehanna and Lightspeed will also require approval from US partners for the new venture, indicating that the initiative has become international.

“Without deviating from the law that prohibits discrimination in various forms, any discrimination based on religion, gender, sexual orientation, color, race, national origin or ethnic background is unacceptable and is not consistent with the principle of equality stated in the Declaration of Independence of the State of Israel,” reads the new clause that will be added to new investments in new companies or those that exist in the funds’ portfolios.

“The company undertakes to refrain from discrimination in the hiring and firing of employees and in the selection of suppliers on the basis of religion, gender, sexual orientation, marital status, color, race, national origin or ethnic background, and it will make reasonable efforts that none of its employees, consultants and agents discriminate on such a basis.

Also in selecting its vendors and suppliers, the company will make commercially reasonable efforts not to work with and receive services from vendors that discriminate against their employees, consultants, suppliers, customers, or any third party.” (Globes/TNS)