News - Belfer Center for Science and International Affairs, Harvard Kennedy School

Does Venture Capital Have a Public Purpose Responsibility for Tech Startups?

Feb. 19, 2019

On February 19, the Technology and Public Purpose Project (TAPP) convened the second session of the spring semester for the Boston Tech Hub Faculty Working Group. This monthly meeting convenes faculty from across Harvard and MIT in disciplines of engineering, business, law, government, computer science, biology, and medicine to explore the intersections of technological innovation and risks and benefits to society. This month, the group discussed the topic “Do Venture Capitalists have a Public Purpose Responsibility for Emerging Technology?” 

Venture Capital (VC) has helped many of today’s most iconic tech companies—including Facebook, Uber, and Airbnb, to name a few—grow into leading companies. By bringing their tech products and services to market, VC funding has allowed these firms to remain innovative and leading edge. Yet raising capital often comes with intense pressures on young companies to build and scale their services rapidly so that VCs can meet ambitious financial return targets set by their investors (pensions, endowments, etc.) One key challenge the group explored: How to identify and help companies that are committed to the public good but face daunting capital requirements. Participants discussed whether new funding models that combine government innovation funds, venture philanthropy, and traditional VC could relieve some of the pressures related to financial returns.

The rapid scaling model for new technologies has also led to many challenges to public purpose. Products are often brought to market without considering the disruptive implications of their underlying technologies and how they might impact existing public services such as transportation, education, or health care. These business models don’t always fully account for the rights of workers and local communities, while product developers don’t always anticipate how “bad actors” might exploit their services – and thus fail to introduce proper safeguards beforehand.  

While there is no “silver bullet” solution to the challenges, the group identified some potential pathways forward. Mentors could help entrepreneurs think through challenging social impact issues. New tools could support start-ups and investors in better understanding their options related to privacy or cybersecurity. Furthermore, the market incentives of companies at various stages of maturity must increasingly reflect the assumption that doing good can simultaneously mean doing well. The TAPP Project will conduct research and convene investors to ensure that new technologies are brought to market in ways that maximize the benefits and minimize the harms to society.   

For more information on the TAPP project, please visit our website or follow us on Twitter @TAPP_Project.


To continue the conversation, TAPP in partnership with Harvard Business School will host a conference on "Reimagining Investing in Frontier Technology" on May 15, 2019. For more information, please visit the conference website.


For more information on this publication: Belfer Communications Office
For Academic Citation:Does Venture Capital Have a Public Purpose Responsibility for Tech Startups?.” News, Belfer Center for Science and International Affairs, Harvard Kennedy School, February 19, 2019.