The #MeToo movement in recent years has influenced nearly every sector of U.S. society, shedding light on sexism, discrimination, and abuse in workplaces across the board. This week, the movement hit a milestone in the world of venture capitalism.
Alice, the artificial intelligence-driven business platform that supports entrepreneurs, announced Wednesday that it closed a funding round that featured an unprecedented #MeToo morality clause for investors.
"It was really important to us to put the power back in the business owners' hands to make sure that when these things happen, there is an agreement in place already," said Carolyn Rodz, a co-founder of Alice.
The clause specifically required that Alice stockholders vote on the removal of any board member that is found guilty of a "#MeToo event, racial discrimination, and/or sexual orientation discrimination incident." The Series A funding round was led by SVB Financial Group, the parent company of Silicon Valley Bank.
Elizabeth Gore, President and Chairwoman of Alice
Sexual and race discrimination is just plain bad for business.
"The Alice team is taking an important step with the introduction of a morality clause, and I expect to see other companies follow their lead," John China, the president of SVB Financial Group, said in a statement.
Alice was founded in 2016 by two leading female entrepreneurs as a company to accelerate and support women-owned businesses. The company, which now supports business owners of all types, built its machine learning platform to advise users on everything from funding sources to hiring best practices. Rodz and her co-founder Elizabeth Gore named the virtual adviser Alice after Alice in Wonderland, whose journey they compare to that of a business owner.
"My hope is that as others start to adopt the [#MeToo clause] it becomes the norm for every entrepreneur raising capital," Rodz added.
The #MeToo movement largely stemmed from the 2017 revelation of widespread sexual abuse by famed Hollywood producer Harvey Weinstein. Victims of sexual harassment subsequently took to social media to share their stories, launching a viral worldwide campaign that led to the unearthing of sexual discrimination and abuse by several high-powered male leaders across industries. The hashtag was originally coined by activist Tarana Burke in a 2006 campaign to reach out to survivors, particularly among women of color.
Rodz added that Alice's services and its initiatives like the #MeToo clause are catered specifically to the rapidly growing number of female and minority entrepreneurs. The number of women-owned businesses in the U.S., for instance, has jumped from just 402,000 in 1972 to 12.3 million in 2018, according to American Express' State of Women-Owned Businesses 2018 report.
Gore, Alice's president and chairwoman, added in a statement that inclusivity has "monetary value" and urged "every funding agreement for every business" to include a #MeToo clause. "Sexual and race discrimination is just plain bad for business," she said.