As directors of the Working Capital Innovation Fund, the only true venture capital fund making for-profit investments in the forced labour/worker rights space that we know of, the openDemocracy article ‘The blindness of using venture capital to fight human trafficking’ unsurprisingly caught our attention.
A close reading makes it clear that the authors are targeting the work of leading venture philanthropists, not impact-oriented venture capital investors. We would distinguish the two. Both stem from the idea that the practices and principles employed by venture capitalists can be used to achieve social outcomes, but the former uses the tools of traditional grantmaking while the latter invests capital to generate social impact in a way that also provides financial returns. Our fund is squarely within the second of these two models, and as the article is primarily an overarching critique of philanthropy we understand that it is not targeting us directly.
Nevertheless, we feel compelled to respond as the article touches upon a number of themes that are critical – and often contentious – aspects of our work to use early-stage venture capital to address forced labour in the extended supply chains of multinational companies. These critiques are, in our view, over simplified. They are also often polarising and potentially detrimental to the collective effort required to make progress on the deeply challenging issues of inequality that we all care deeply about.
