'I may be contributing to the growing inequality’: Venture capitalist on the conundrum of Silicon Valley
This week's Justice Department lawsuit, accusing Google of Alphabet (toget, togetL) of having an illegal monopoly through search and search advertising, was welcomed by direct competitors like Yelp (YELP) and TripAdvisor (TRIP).
Venture capitalists, many of whom have built or run large technology companies and are public market investors themselves, are more nuanced.
Rodney Sampson serves as chairman and CEO of Opportunity Hub, a portfolio of companies committed to promoting racial equality, including a nonprofit and an investment arm. He believes that a broken Google could potentially open up more opportunities for entrepreneurs, especially those of color. Sampson, who is Black, co-founded and sold several startups including Multicast Media Technologies and EFactor.
ATLANTA, GEORGIA - DECEMBER 15: Rodney Sampson on stage during the ESSENCE + New Voices Entrepreneur Summit and Target Vacation Market at West End Production Park on December 15, 2019 in Atlanta, Georgia. (Photo by Paras Griffin / Getty Images for ESSENCE)
“You have many executives and professionals who have worked in companies that sometimes turn around and become suppliers and suppliers themselves. When you think about how these companies are racing for cities like Atlanta or other smaller markets, we have to deliberately consider the welfare agreements we negotiate because they can basically re-gentrify a community very quickly, ”he said in an interview with Yahoo Finance "On the Move" this week.
Rather than pitting startups against big tech, this lawsuit should spark a more collaborative mentality, Sampson says.
“Retail investors need to look at their respective moral compass. I mean, look, I'm an investor. And, to a certain extent, I can contribute to economic inequality. That's why I'm just as deliberate about partnerships. For every dollar I make, I think about what dollars can be reinvested in those who may not have the same opportunities as me. If you look at this pandemic and 39% of blacks are unemployed, 41% of black companies are unemployed, the question is whether the industry is determined to resolve this. Or are they just looking at the federal government to solve the problem? I think everyone has a role, ”he said.
Revolution's Rise of the Rest urges diversity in venture capital centers
Revolution's Rise of the Rest is a platform that focuses on putting regional startup hubs in the spotlight with seed capital. Steve Case, Chairman and CEO of Revolution, and Rodney Sampson, Chairman and CEO of OHUB, will attend Yahoo Finance's On The Move panel to weigh the importance of investing in a diverse workplace.
Opportunity Hub partnered with Steve Case's Revolution Funds, Morgan Stanley's Multicultural Innovation Lab, and 100 Black Angels for the Rise of the Rest Virtual Tour, a $ 2 million startup pitch competition for companies founded by Black in the United States with headquarters outside of Silicon Valley, Boston and New York City. Startups have to apply for the competition by October 25th.
Since he left AOL, which he co-founded, in 2003, Case has tried to overcome the hegemonic status quo of Silicon Valley. 79 percent of all venture capital investment dollars go to California, New York, and Boston, and as cities are trying to mark themselves as innovation hubs with monikers like Silicon Prairie (Dallas), Silicon Peach (Atlanta), and Silicon Slopes (Salt Lake City).
Instead of playing big tech off against startups, Case advocates a more collaborative approach.
“These companies, Google, Facebook etc., are amazingly successful and don't mind. However, I think that venture capital is very reluctant to fund a company that is going to compete with Google or Facebook and that they use their platforms in a way that benefits some of their own businesses and puts other businesses at a disadvantage, ”he told Yahoo Finance.
“In the past, antitrust law has focused more on protecting customers. I think it's more about promoting competition and making sure innovation thrives everywhere. And I think Silicon Valley, Big Tech, has a role to play, including partnering with some of these startups in other parts of the country to help them expand, be a little less insular ... in the broader sense .. I think closer examination was inevitable for a while. "
Melody Hahm is the West Coast correspondent for Yahoo Finance and covers entrepreneurship, technology and culture. Follow her on Twitter @melodyhahm.
Hollywood "is just beginning to take notice of the huge Latinx market": producer behind Netflix's 'Selena' series
Ex-Facebook and Pinterest executives explain how tech addiction made him rethink his life's work
Netflix's Reed Hastings: "Thank God" Blockbuster didn't want to buy us
What Silicon Valley still doesn't understand about its diversity problem
In this article
Click to receive the most important news as a notification!
Sasha Obama Stuns in a Rare New TikTok That Shows Off Her Dance Moves
Explaining MLB's non-tender deadline: Why big names could join the free agent pool Wednesday
ICYMI, The Mandalorian Name-Dropping Grand Admiral Thrawn Is a Very Ominous Sign
Oshkosh's (OSK) Defense Arm Wins $911M JLTV Order From U.S. Army
Kevin Stefanski should be the NFL’s Coach of the Year
Stomach Flu Vs. COVID-19: Here’s How to Tell the Difference