One of the interesting things about getting into venture via your own fund versus coming up through a larger firm is that when “this is always the way it’s been done” comes up as a rationale, you get to shrug and say “not any more.”

Like, for example, the practice of VC funds charging their legal fees back to the startup. We don’t do this because, well, we want the money we give you to go for hiring, marketing, operations.

Another area we try to neutralize are aspects of the founder <> investor relationship which utilize asymmetrical power to make it difficult for a founder to build their values into their company. The Jeffrey Epstein horror of his money being tied into so many institutions that hid their eyes brought to mind the background checks that our LPs performed on us as part of making their investments. And how venture funds will often perform similar ones on founders as a condition of investment. The basic ones are only really about surfacing adult criminal convictions, verifying employment history and so on.

But when I recently asked a few venture GPs whether a founder ever requested to background check *them* as a condition of investment and joining their company board, it had never been asked (although also none objected to the idea). Did it not occur to any founders? Did they assume their VC was vetted by their partners already for these issues? Or is the request something that’s perceived as a friction to getting the deal done, one which might offend the venture investor?

Even more complex, what do you do with the information? What if you discover a potential investor has a criminal conviction. Maybe it can be explained in a way which doesn’t cause the founders to question the ethics and morality of the investor — there are certainly types of criminal convictions that wouldn’t phase me. Or what if the background check does turn up something notable and disturbing – do you have a responsibility to share this information with other founders? Not easy right?

BUT I feel like current practices don’t even give founders that right because while it’s standard for VCs to ask founders for this permission, it doesn’t seem to be exercised equally in reverse. So that’s why I’m writing this blog post — to pierce the “is it appropriate” membrane and see what happens.

Here’s our promise – founders, if we offer you a termsheet to invest in your company and you want to review the recent background checks that our LPs have performed on us, we have copies and will walk you through them. They’re pretty boring.

And if you’re working with another investor, maybe it’s not crazy to ask them to reciprocate (although if there’s someone who tingles your “spidey sense” from a behavior standpoint, a background check might not be sufficient). And hey, if they object, you can always send them this post 🙂