The Washington Post: Black start-up founders say venture capitalists are racist, but the law protects them

The Washington Post, July 22, 2020: Black start-up founders say venture capitalists are racist, but the law protects them

In tightknit social media groups and private email chains, Black entrepreneurs share their Silicon Valley stories. It often starts with a racist comment from a venture capitalist or a subtle jab that reveals a deep bias. The stories usually have the same ending: a decision to pass on investing.

If those entrepreneurs were applying for a job, they might have a shot at a discrimination lawsuit, employment lawyers say. But in the rarefied world of white-collar dealmaking, legal protections born out of the civil rights movement effectively don’t apply, thanks to court decisions that have watered down legislation. As recently as March, the U.S. Supreme Court further defanged a 150-year-old anti-discrimination law that required plaintiffs to prove defendants were not intentionally biased but also would have made different business decisions if race were not a factor.

“You almost need a smoking gun, an email that says, ‘I have discriminated against you, and I’m not investing with you because of your race,’” said Kristin Johnson, a professor at Tulane University Law School in New Orleans and a former vice president at JP Morgan, the nation’s largest bank. “It’s created a situation where we are no longer looking to the courts for justice.”

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