Venture Capital Code of Conduct and Ethical Framework for Impact PE and VC Funds

Preamble

This code of conduct outlines the core principles and ethical guidelines that Venture Capital (VC) firms and their professionals commit to uphold in their investment activities. These principles aim to foster a transparent, responsible, and sustainable venture capital ecosystem, driving positive impact alongside financial returns.

Core Principles

Ethical Conduct

VC firms will operate with the highest ethical standards, promoting integrity and fairness in all interactions with founders, investors, and stakeholders. This includes avoiding conflicts of interest and acting in the best interests, which fiduciary and otherwise, of the fund, its portfolio companies, and its investors. 

Transparency

VC firms will strive for transparency in their operations, including investment criteria, decision-making processes, and fees. Clear communication with founders and investors builds trust and fosters a healthy ecosystem.

Collaboration and Cooperation

VC firms will, when appropriate, collaborate with other experienced firms to deepen the knowledge pool, broaden future growth, impart answers, and create an equitable market.

Impact alongside Returns

While financial returns are important, VC firms will consider the broader societal and environmental impact of their investments. Aligning investments with Sustainable Development Goals (SDGs) is encouraged.

Independent Oversight

VC firms will establish mechanisms for independent oversight and governance. This includes robust compliance functions to monitor adherence to this code and promote a culture of ethical behavior, potentially setting up a council with representatives from VC firms.

Respectful Engagement

VC firms will treat all stakeholders, including founders, investors, employees and others with respect. This means fostering a collaborative environment based on open communication, safety, empathy, and constructive feedback.

Long-Term Investment Horizon

VC firms will prioritize the long-term success of their portfolio companies over short-term gains. This involves supporting the development of founders and their teams alongside the growth of the business, especially during challenging times.

Additional Considerations

Founders' Well-Being

VC firms should avoid practices that exploit or infantilize founders. Supporting founders' personal development contributes to the overall success of the venture.

Mental Health of Staff

VC firms should actively support the mental health of their staff, ensuring a healthy work environment. There should be available to all staff constructive mental health support resources. 

Sustainable Practices

VC firms should encourage and support sustainable practices within their portfolio companies. This includes environmental, social, and governance (ESG) considerations.

Fairness for Investors

VC firms should be transparent with investors regarding fees and terms. Avoiding highly dilutive structures protects investor interests.

Impact Measurement

VC firms are encouraged to develop frameworks for measuring the social and environmental impact of their investments along with financial returns. VC firms should consider using a standard protocol across peer groups, sectors, etc. to ensure unifying of data and outcomes.

Conclusion

By adhering to this code of conduct, VC firms can play a vital role in building a more ethical, sustainable, equitable, and impactful venture capital ecosystem. This code serves as a foundation for responsible investment practices that contribute to a better future for all.

Note

This code of conduct incorporates the valuable insights from Angelica Lips da Cruz, Martha J. Sirolli, and others who contributed to the discussion. It acknowledges the need for a shift towards a more holistic approach to VC that prioritizes positive impact alongside financial returns. While some may argue that the primary focus of VC is ROI, this code strives to establish a framework for achieving strong financial returns while also considering the broader societal and environmental implications of investment decisions.

Ethical Framework for Impact PE and VC Funds

Executive Summary

A robust code of ethics is paramount in the rapidly evolving landscape of Impact Private Equity (PE) and Venture Capital (VC) funds. It will increase shareholder value, reduce risk, and be genuine, honest, and easier to live with, improving the public perception of the industry. This white paper outlines a comprehensive ethical framework that encompasses transparency, fair treatment, long-term value creation, diversity and inclusion, conflicts of interest management, due diligence, responsible exits, ESG practices, intellectual property respect, continuous learning, legal compliance, community engagement, empathy, relationship building, mentorship, stakeholder inclusivity, conflict resolution, cultural competence, responsible influence, community involvement, impact measurement, transparent decision-making, practical communication skills, adaptive leadership, and integrity in networking. It aims to create an ecosystem founded on transparency, trust, integrity, openness, and a shared mission.

TBLI seeks to leverage our community’s capacity by establishing and maintaining a performance platform of Impact PE and VC Funds based on user validation.

Introduction

In an era where ethical considerations are pivotal to sustainable and responsible investing, Impact PE and VC funds must adopt and adhere to a Code of Ethics that goes beyond regulatory requirements if they want to stand out in an increasingly cynical environment. This document provides a robust foundation to guide ethical behavior and foster a culture of responsibility within the industry.

Ethical Principles

Transparency and Open Communication

• Maintain open and honest communication with founders and stakeholders.
• Communicate investment terms, conditions, and expectations clearly and simply.

Fair Treatment of Founders

• Treat founders with respect, acknowledging their contributions and potential.
• Avoid taking advantage of information imbalances or exerting undue pressure.
• Respond promptly (up to 2 weeks) to investment requests.
• Provide support during challenges, including financial and relational.

Long-Term Value Creation

• Focus on sustainable, long-term value creation over short-term gains.
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• Consider broader ecosystem impacts in investment decisions, aiming 20 years out and envisioning 4-5 iterations of the tech sector during that period.

Diversity and Inclusion

• Promote diversity in both investment decisions and portfolio companies.
• Avoid discriminatory practices, ensuring fair opportunities for all.

Conflicts of Interest

• Disclose and manage conflicts appropriately.
• Ensure personal interests do not compromise fair treatment in investment decision-making.

Due Diligence

• Conduct thorough due diligence with integrity and confidentiality.
• Avoid spreading unfounded rumors or engaging in harmful practices.

Responsible Exits

• Handle exits responsibly, considering impacts on employees, customers, the community, and the economy.
• Seek mutually beneficial outcomes aligned with ethical standards.

ESG Practices

• Integrate ESG considerations into investment decisions from the outset.
• Encourage sustainable practices within portfolio companies.

Respect for Intellectual Property and Innovation

• Respect intellectual property rights and foster innovation.
• Avoid unethical practices harming the innovation ecosystem.

Continuous Learning and Improvement

• Commit to ongoing education on ethical practices.
• Embrace feedback and continuously improve ethical standards.

Compliance with Laws and Regulations

• Operate in compliance with applicable laws.
• Uphold high ethical standards even when regulations are silent.

Community Engagement

• Encourage and participate in community engagement and philanthropy.
• Contribute positively to communities where investments are made.

Additional Ethical Considerations

This framework introduces an alternative approach emphasizing empathy, relationship building, mentorship, stakeholder inclusivity, conflict resolution, cultural competence, responsible influence, community involvement, social impact measurement, transparent decision-making, communication skills, adaptive leadership, and integrity in networking.

Conclusion

Adopting a comprehensive Code of Ethics is a regulatory and fundamental human necessity and a commitment to shaping a sustainable and socially responsible future. By incorporating these ethical principles, Impact PE and VC funds can foster positive change, contribute to societal well-being, protect and regenerate the environment, and create lasting value for all stakeholders.

Introducing the TBLI VC & PE Review: Navigating Ethical Investments

Overview

In our ongoing commitment to ethical investment practices and transparency within the Venture Capital (VC) and Private Equity (PE) sectors, we are thrilled to introduce the TBLI VC & PE Review—a cutting-edge platform designed to empower founders and stakeholders in assessing the ethical conduct of VC and PE firms.

TBLI VC & PE Review

The TBLI VC & PE Review is a vital resource for founders to share their experiences and evaluate the ethical practices of VC and PE funds. Our primary goal is to offer invaluable insights to the entrepreneurial community, fostering a culture of responsible investment and moral conduct.

Key Features

• Protected & Anonymous: Founders can confidently contribute to the review platform with the assurance of protection and anonymity.
• Exclusive Community Access: The review platform is accessible through invitation only, ensuring the credibility and reliability of the shared reviews.
• Constructive Feedback Encouraged: We emphasize the importance of constructive and informative reviews, discouraging unfounded disparagement.
• Comprehensive Review Criteria: Founders are guided through open-text questions, encouraging detailed and context-rich assessments.

Review Criteria

• Honest Review: "Please leave an honest review of your experience with this VC/PE firm. Share anecdotes and provide contextual information to make your review as helpful as possible for other founders."

• Optional Questions:

• "How Well Acquainted Are You with This Firm?"
• "Have You Received Funding from This Firm?"
• "Does the Investor Have Authority to Write Checks within the Firm?"

• Sliding Scale Statements:

• "Respectful, Responsive & Decisive": Responsive and respectful conduct, avoiding ghosting. Prompt and decisive decision-making.
• "Adds Value (Hiring, Fundraising, Selling)": Overall contribution to founders with services like customer introductions, hiring assistance, and fundraising support.
• "Trustworthy (Understands Market & Delivers)": Demonstrated trustworthiness, market understanding, and consistent delivery of promises.
• "Would You Recommend This Firm?": Recommendation on a scale from 1-10.

With the TBLI VC & PE Review, we aspire to be a catalyst for ethical investing, contributing to a sustainable and responsible future for ventures dedicated to making a positive impact.

TBLI Guide Community Guidelines: Navigating Ethical Conduct

Overview

The TBLI Guide Community Guidelines are crafted to offer clarity on:

The Unique Principles of the TBLI Guide

• Understand the principles that make TBLI Guide a distinctive community.

Expectations for TBLI Guide Users

• Recognize the rules and standards expected from TBLI Guide users.

Addressing Inappropriate Behavior

• Know the steps to take if encountering inappropriate conduct.

Special Rules for TBLI Guide

Be Honest

Welcome to TrustVC and our Platform at www.trustvc.org (our “Platform”). This Privacy Policy explains which Personal Data we collect from you via our Platform, what we use it for, when we delete it and how your data is protected.

trustvc.org is operated and maintained by TBLI Group Holdings B.V. of Herengracht 450-458, 1077 CA Amsterdam, Netherlands (“TBLI Group”, “we”, “us”, or “our”). If you want to contact us or if you have any questions, you can reach us by email using This email address is being protected from spambots. You need JavaScript enabled to view it., or write to TBLI PLC, c/o Data Protection Officer, 5 Howick Place, London, SW1P 1WG, United Kingdom.

WHY DO WE HAVE A PRIVACY POLICY?

We will only use your Personal Data in accordance with the applicable data protection laws, in particular the Dutch GDPR Implementation Act (Uitvoeringswet Algemene Verordening gegevensbescherming) (“UAVG”) and the EU's General Data Protection Regulation (“GDPR”), and of course only as described in this Privacy Policy.

PRINCIPLES OF DATA PROCESSING

1. a) Personal data

Personal data is any information relating to an identified or identifiable natural person. This includes, for example, information such as your name, age, address, telephone number, date of birth, e-mail address, IP address or user behavior.

1. b) What is Special Category Data?

Special category data is Personal Data that needs more protection because it is sensitive. This includes Personal Data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, genetic data, biometric data. As well as, data concerning health, a person’s sex life; and a person’s sexual orientation. In order to lawfully process Special Category Data, it is necessary to consent to the processing.

1. c) Processing 

The processing of Personal Data (e.g. collection, retrieval, use, storage or transmission) always requires a legal basis. 

1. d) Legal basis

In accordance with the UAVG and the GDPR, we have to have at least one of the following legal bases to process your Personal Data: i) you have given your consent, ii) the data is necessary for the fulfillment of a contract / pre-contractual measures, iii) the data is necessary for the fulfillment of a legal obligation, or iv) the data is necessary to protect our legitimate interests, provided that your interests are not overridden. 

1. c) Retention

Processed Personal Data will be deleted as soon as the purpose of the processing has been achieved and there are no longer any legally required retention obligations.

DATA WE COLLECT

1. a) Provision and use of our Platform

When you call up and use our Platform, we collect the Personal Data that your browser automatically transmits to our server. This is technically necessary for us to display our Platform and to ensure its stability and security. In this sense, we collect the following data: i) IP address of the requesting computer, ii) Date and time of access, iii)name and URL of the file accessed, iv) website from which the access was made (referrer URL), v) browser used and, if applicable, the operating system of your computer as well as the name of your access provider. The legal basis is our legitimate interest.

1. b) Hosting 

The hosting services used by us for the purpose of operating our Platform is Krystal Hosting. In doing so Krystal Hosting processes inventory data, contact data, content data, usage data, meta data and communication data of customers, interested parties and visitors of our Platform and services, on the basis of our legitimate interests.

1. c) Fonts

We have integrated the fonts of Font Awesome of Fonticons Inc. To enable the display of fonts, a connection to Font Awesome’s server is established when our Platform is accessed. This enables Fonticons to determine which website sent the request and to which IP address the display of the font is to be transmitted. The integration is based on our legitimate interest.

1. d) Cookies

We use cookies on our Platform. In accordance with the Dutch Wet van 4 februari 2015 tot wijziging van de Telecommunicatiewet (“Cookie Law”) and the EU`s Privacy and Electronic Communications Directive (“PECD”) we are required to obtain your consent before placing so-called Non-Essential Cookies (Functional cookies, Analysis and Performance Cookies, Advertising Cookies or Targeting Cookies). However, as we have refrained from placing Non-Essential Cookies, we are not required to obtain any consents nor to have a cookie consent tool. Nonetheless, this may change in the future and if we do use Non-Essential Cookies we will provide a Cookie Policy.

1. e) Cookie consent 

Our Platform uses a cookie consent tool to obtain your consent to the storage of cookies and to document this consent. When you enter our Platform, the following Personal Data is transferred to us via our cookie consent tool: i) Your consent(s) or revocation of your consent(s); ii) Your IP address; iii) Information about your browser; iv) Information about your device; v) Time of your visit to our Platform. The basis for processing is our legitimate interest and your consent.

1. f) Analytics

For business reasons, we analyze the data we have on web and server traffic patterns, website interactions, browsing behavior etc. The analyses serve us alone and are not disclosed externally and processed using anonymous analyses with summarized and or anonymised values. For this purpose we use Google Analytics which is a web analytics service offered by Google LLC. The legal basis is our legitimate interest and your consent. For further information, please refer to our Cookie Policy.

1. g) Contacting Us

We offer you the opportunity to contact us using various methods. We collect the data you submit such as your name, email address, telephone number and your message in order to process your enquiry and respond to you. The legal basis is both your consent and contract. 

1. h) Account Registration

If you create a user account, we will collect your Full Name, Email Address, and your Password. Within your profile you are able to delete your account at any time. Your data will be processed on the basis of your consent.

1. i) Profile

As a registered user, you have the opportunity to create a user profile with just a few clicks and details. If you make use of the option, the relevant profile data including information about your business, you provide will be transferred to your profile. Of course, you can change the information at any time via the settings in your profile. 

When creating a profile, you can submit both Personal Information and Special Category Data. You have choices about the information on your profile. You don’t have to provide additional information on your profile; however, profile information helps you to get more from our Services. It’s your choice whether to include sensitive information on your profile and to make that sensitive information public. Please do not post or add Personal Information to your profile that you would not want to be available. 

The legal basis for the processing of your Personal Information is the establishment and implementation of the user contract for the use of the service. We store the data until you delete your user account. Insofar as legal retention periods are to be observed, storage also takes place beyond the time of deletion of a user account. 

1. j) When using our services

We process the data of our registered users in order to be able to provide our contractual services as well as to ensure the security of our services and to be able to develop it further. 

While we need certain Personal Data to allow you to participate, your Personal Data is never shared without a lawful reason. However, Content uploaded by will be made available and may be viewed and otherwise accessed by others. In turn we may process:

Content

Content Data includes photos, videos, text, messages, or other digital content you create, broadcast, perform, or upload on our Platform and information about the content you create, broadcast, perform, or upload, including metadata that is provided with that content. Please remember that Content Data that you transmit may reveal personal data about yourself as well, including identifying information about yourself depicted in any photos or texts and submissions.

Information about reviews and ratings

This includes: Which firms you reviewed, Which services you reviewed, Whether you wrote a service review, a location review, or a product review, Your review content and rating. The location of the firm you reviewed. The dates you wrote your review, made any edits, or deleted the review. Your reference number, order ID or similar (if you or the firms provided one). If we ask you to provide information or documentation to verify your experience, and you send us such documentation, we will collect and process the documentation for the purpose/s stated in the request.

Personal Data

Personal Data you provide may be considered “special” or “sensitive”. This includes Personal Data concerning for example your racial or ethnic origins, sexual orientation, sexual preferences and gender. By choosing to provide this data, you consent to our processing of that data. You have choices about the data you provide and how you share it. You don’t have to provide Personal Data or Special Category Data. It’s your choice whether to include Personal Data or Special Category Data and to make that information available to us. Please do not share information that you would not want to be available. The legal basis for the processing of your Personal Data and Special Category Data is the establishment and implementation of the user contract for the use of the service as well as your consent. 

Images and facial-related information

In providing our Platform and publishing your content including video, images, chats we may process images and facial-related information from our Users. Images and facial-related information are used and processed solely for the purpose explicitly consented to and we do not collect, use, or store any images and facial-related information for the purpose of recognising faces outside of this purpose. The legal basis is your consent.

Messages and communications

Of course, we also process your messages and communications with other users as well as the content you may provide to others through our Platform as you interact with them. 

Other Information

Information about views, likes and how useful your review is for others and Information about reports and replies to reviews from your business account.

The legal basis for providing the above is the fulfillment of the user contract for the use of the App as well as your consent. 

1. k) Administration, financial accounting, office organization, contact management

We process data in the context of administrative tasks as well as organization of our business, and compliance with legal obligations, such as archiving. In this regard, we process the same data that we process in the course of providing our contractual services. The processing bases are our legal obligations and our legitimate interest. 

1. l) Aggregated Data

We also collect, use and share Aggregated Data such as statistical or demographic data for any purpose including improving our Platform and services. Aggregated Data could be derived from your Personal Data but is not considered Personal Data in law as this data will not directly or indirectly reveal your identity. However, if we combine or connect Aggregated Data with your Personal Data so that it can directly or indirectly identify you, we treat the combined data as Personal Data which will be used in accordance with this privacy policy. 

1. m) Promotional use of your data

We use your data (email address) within the legally permissible scope for marketing purposes, e.g., to draw your attention to special promotions and discount offers using the services of . In addition, we may draw your attention to comparable offers by email, e.g., we may inform you about exclusive sales, promotions, or special events. The legal basis for processing is our legitimate interest. 

SOCIAL MEDIA

We are present on social media on the basis of our legitimate interest. If you contact or connect with us via social media, we and the relevant social media platform are jointly responsible for the processing of your data and enter into a so-called joint controller agreement. The Personal Data collected when contacting us is to handle your request and the bases are both your consent and our legitimate interest.

In addition, your data may be processed for market research and advertising purposes. For example, usage profiles can be created from your usage behavior and the resulting interests. This allows, for example, advertisements to be placed within and outside the platforms that presumably correspond to your interests. The legal basis is our legitimate interest.

When you visit our social media profiles, we, as the operator of the profile, process your actions and interactions with our profile (e.g., the content of your messages, enquiries, posts or comments that you send to us or leave on our profile or when you like or share our posts) as well as your publicly viewable profile data (e.g., your name and profile picture). Which Personal Data from your profile is publicly viewable depends on your profile settings, which you can adjust yourself in the settings of your social media account. The legal basis is our legitimate interest and your consent.

DATA SECURITY

We undertake to protect your privacy and to treat your Personal Data confidentiality. In order to prevent manipulation or loss or misuse of your data stored with us, we take extensive technical and organizational security precautions which are regularly reviewed and adapted to technological progress. These include, among other things, the use of recognised encryption procedures (SSL or TLS).


However, we would like to point out that, due to the structure of the Internet, it is possible that the rules of data protection and the above-mentioned security measures are not observed by other persons or institutions that are not in our area of responsibility. We have no technical influence on this. It is the user's responsibility to protect the data he or she provides against misuse by encrypting it or in any other way.

INTERNATIONAL TRANSFERS

We may transfer your Personal Data to other companies as necessary for the purposes described in this Privacy Policy. In order to provide adequate protection for your Personal Data when it is transferred, we have contractual arrangements regarding such transfers. We take all reasonable technical and organizational measures to protect the Personal Data we transfer.

HOW WE MAY SHARE YOUR PERSONAL DATA

We may share your Personal Data with our business partners and within TBLI Group for the purposes described in this Privacy Policy, including (but not limited to) conducting the services you request, or customizing our business to better meet your needs. We share your Personal Data only with business partners who agree to protect and use your Personal Data solely for the purposes specified by us. 

We may also disclose your Personal Data for any purpose with your consent or for law enforcement, fraud prevention or other legal actions as required by law or regulation, or if we reasonably believe that we must protect us, our customers or other business interests. Except as described above of which you will be informed in advance, we will not disclose your Personal Data.

WHAT WE DO NOT DO

• We do not request Personal Data from minors and children;
• We do not use Automated decision-making including profiling; and
• We do not sell your Personal Data.

PRIVACY RIGHTS 

Under the UAVG and the GDPR, you can exercise the following rights:

• Right to information

• Right to rectification

• Right to deletion

• Right to data portability

• Right of objection

• Right to withdraw consent

• Right to complain to a supervisory authority

• Right not to be subject to a decision based solely on automated processing.

If you have any questions about the nature of the Personal Data we hold about you, or if you wish to exercise any of your rights, please contact us.

UPDATING YOUR INFORMATION AND WITHDRAWING YOUR CONSENT 

If you believe that the information we hold about you is inaccurate or that we are no longer entitled to use it and want to request its rectification, deletion, or object to its processing or want to withdraw any consents you have given us, please contact us. 

ACCESS REQUEST 

In the event that you wish to make a Data Subject Access Request, you may inform us in writing of the same. We will respond to requests regarding access and correction as soon as reasonably possible. Should we not be able to respond to your request within thirty (30) days, we will tell you why and when we will be able to respond to your request. If we are unable to provide you with any Personal Data or to make a correction requested by you, we will tell you why.

COMPLAINT TO A SUPERVISORY AUTHORITY

The supervisory authority in the Netherlands is the Autoriteit Persoonsgegevens, (https://autoriteitpersoonsgegevens.nl/en). We would, however, appreciate the chance to deal with your concerns before you approach the Autoriteit Persoonsgegevens or any other supervisory authority.

HOW DO WE MAKE CHANGES TO THIS POLICY?

We may change our Privacy Policy from time to time. When we change our Privacy Policy, we will publish the updated policy on our Platform. Please check this Privacy Policy regularly. Subject to applicable law, all changes will take effect as soon as we publish the new Privacy Policy, but where we have already collected information about you and/or where legally required to do so, we may take additional steps to inform you of any material changes to our Privacy Policy and may request that you agree to these changes.

EFFECTIVE DATE

Thursday, 13th of June, 2024