I'm against discrimination and all, but isn't the decision to invest freely based on anything they want? I like the cut of his jib, or those shoes are cool, you're in? This isn't a job, it's an investment of money in a company. I could be way off base though. Opinions?
The people he would be hiring are working essentially at subsidiary companies, at least for their tenure at YC. They receive their payment from YC, and work under the direction of YC, so as far as they're concerned, they are YC employees, and they deserve equal treatment. You can't discriminate on ethnicity or country of origin when hiring.
if you invest in only american stock, you're descriminating... what if i forced you to buy foreign stock to balance it out? isn't that the same concept? you OWN that company.
Yes, that's the question that is being asked in the OP: is an investor subject to the Civil Rights Act. Which, in my opinion, is quite clearly to be answered 'no', since an investor doesn't fall under any of the categories in the law, the interpretation guidelines or (as far as I know) in the case law. So this is basically whining by somebody who doesn't know what he's talking about.
Even when you hire somebody, you can discriminate all you want, except not against a limited set of criteria such as ethnicity, gender etc. So if you decide to not hire somebody because you don't like his shoes, that's perfectly within your right (except when you can construe that the shoes are correlated to another, protected aspect. Let's say you don't hire a woman because she wears a bra and you don't like bras. That's almost certainly a violation).
Both examples seem to basically be making the point, "Hey, if you're pitching or presenting a public face, we note that you have better luck without a strong accent."
I think the author is just trying to make a mountain out of a molehill.
There was a thread about this yesterday. While the quote does not deserve the beauty prize the conclusions that are drawn from it are as bad as the quote. Paul has already qualified his position and obviously did not mean to come off either racist or xenophobic, he's the guy behind the start-up visa proposal.
1. The article quotes "linguistic characteristics common to a specific ethnic group", but the author then seems to conveniently miss off that qualification in his complaint later. The NYT article quotes PG: “You can sound like you’re from Russia,” he said, in the voice of an evil Soviet henchman. “It’s just fine, as long as everyone can understand you.”
2. The NYT article then goes on to say "Graham told the Strikingly founders that Chen’s accent was too strong". It doesn't say what "too strong" means, but given that he previously said "as long as everyone can understand you", it seems reasonable to assume that this was the problem. The NYT article continues by describing how another founder was quiet and uncomfortable at public speaking. I see no discrimination against "linguistic characteristics common to a specific ethnic group" here; just discrimination against not being able to understand the speaker, which seems perfectly fine when considering about investment into people who will need to do considerable public speaking to achieve success.
What a phony little post. The author appears to be willfully conflating the act of hiring with the act of investing, which are held to completely different legal standards.
Betteridge's Law of Headlines applies here - but also to pretty much every sentence in the last two paragraphs ending in a question mark.
Edit: Completely forgot to mention the fact that PG has made it abundantly clear that his statements revolve around "the ability to communicate", not some sweeping bias against immigrants - which is absurd in itself, considering how diverse YC funded founders are. I think it's really unfortunate that people seem to want to exploit his candor, when he's essentially giving helpful advice to immigrant founders that it would be well worth their time and effort to improve their communication skills.
Had the author spent even a few minutes researching this, he could have easily discovered the full context of PG's quotes, PG's clarifications, and the fallacy of his investor == employer logic, which really makes it look like he's trying to deliberately mislead readers.
Maybe it's time for PG to update his "What you can't say" essay:
So you're saying Investors should be forced to invest money into something because the person pitching them is in a protected class?
Clarification: Discrimination based on race, ethnicity, etc is bad. But employers need to be able to hire based on the ability to do one's job. If a large part of one's job is to communicate... things start to get murky.
Forced? Of course not, don't be hyperbolic. No-one is "forced" to hire because of the Civil Rights Act, they are simply prevented from using race as a reason to not hire.
I was simply pointing out that the OP's reason for being able to disregard the Civil Rights Act is because it's in a legal loophole, not because there are substantial differences that mean it shouldn't be applied.
I think there is a difference though. Any individual could discriminate in buying stocks because they don't like the head of the organization for whatever reason regardless of the moral implication. I don't think anybody would say this would be a violation of the civil rights law.
YC is slightly different because the relationship is closer, sure, but it is still an investor/investee relationship. I think its still a case like the former. I'm not sure I'd agree entirely that its a loophole.
> No-one is "forced" to hire because of the Civil Rights Act, they are simply prevented from using race as a reason to not hire.
Investors are in the business of gauging likelihood of success.
As an extreme example, consider the following scenario: You are an investor during WWII. The Japanese are discriminated against by the general public, and you're considering investing in a company with Japanese founders. You're aware that the company will face significant difficulties because of their race in this climate.
It's not unreasonable to forgo investing. The company's chances of success are significantly lower than they would be if the founders were white (in the climate of WWII).
Were you required by law not to discriminate, you would be forced to invest in a company you didn't expect to succeed.
Of course, you could argue that this isn't discrimination because the actual reason is based on likelihood of success rather than prejudice, which is the case for YC. PG argues that strong accents, which are difficult to decipher, are indicative of sub-par communication skills, and are therefore relevant to the success of the company.
Investors are in the business of gauging likelihood of success.
But aren't employers in the business of gauging likelihood of success in prospective employees? In everything you've just written, how is investment substantially different from hiring?
These acts protect the vulnerable and exploitable. HN readers do not count as exploitable. Anyone who makes it to the interview stage with pg really does not count.
But that's not really the point - we are entering a period where many, perhaps most "jobs" will be as freelancers or in small professional tribes. We stop thinking of the global elite and start thinking about everyone, including the vulnerable - and employers (or investors) will be able to exploit these new self-employed workers. But we are not sure how or where they will exploit them.
I think we can see an age of wonders ahead - but as always ages of wonders need hard-headed regulation to succeed (I am thinking factory safety legistlation to stop children crawling into looms not the stuff politicians complain about).
So, I say we are likely to wait and react to the way the world has changed. To put it loosely, we need to see children being forced into looms, before we realise that's a problem and ban it. And the fact that this will all be done in different countries only complicates matters enormously - the next health and safety legistlation movement will come from the WTO.
And no, pg wanting to clearly understand his investees maybe on the edge, but its not exploitation, nor socially undesirable, so it is not an indicator of the new problems we shall see.
The answer is "no", because Title VII affects employers not investors.
There are some other anti-discrimination laws that affect other business relationships, with different provisions, but largely they address things like housing and public accommodations, which a startup incubator decidedly is not, and, in any case, looking at Title VII's particular rules isn't useful to evaluating of those other laws would apply anyway.
If you want to look at whether YC is doing something illegal, you need to do the work to find a law that is actually applicable to what YC does.
If you want to argue that YC is doing something immoral, then bringing in an irrelevant law is both unnecessary and unhelpful.
What's the difference between YC deciding who to invest in, and an individual deciding who to marry? I'm thinking YC is free to use whatever criteria they deem fit in deciding who to invest in in much the same way that individuals are free to use whatever criteria they deem fit in deciding who to marry.
What's the difference between a company deciding who to hire, and an individual deciding who to marry? I'm thinking a company is free to use whatever criteria they deem fit except wait, that's the entire point of Title VII and the post you're talking about.
I think most of the posts here are addressing this too literally. No, Y Combinator is not violating Title VII because it doesn't apply to investors.
But there's a larger argument here that is moral, not legal. There is a reason why Title VII exists. Are those reasons equally applicable to investor situations, and if so, is Y Combinator acting against the spirit of Title VII?
31 comments
[ 2.8 ms ] story [ 42.1 ms ] threadEven when you hire somebody, you can discriminate all you want, except not against a limited set of criteria such as ethnicity, gender etc. So if you decide to not hire somebody because you don't like his shoes, that's perfectly within your right (except when you can construe that the shoes are correlated to another, protected aspect. Let's say you don't hire a woman because she wears a bra and you don't like bras. That's almost certainly a violation).
I think the author is just trying to make a mountain out of a molehill.
See here:
http://www.businessinsider.com/paul-graham-on-startup-founde...
http://www.paulgraham.com/foundervisa.html
2. The NYT article then goes on to say "Graham told the Strikingly founders that Chen’s accent was too strong". It doesn't say what "too strong" means, but given that he previously said "as long as everyone can understand you", it seems reasonable to assume that this was the problem. The NYT article continues by describing how another founder was quiet and uncomfortable at public speaking. I see no discrimination against "linguistic characteristics common to a specific ethnic group" here; just discrimination against not being able to understand the speaker, which seems perfectly fine when considering about investment into people who will need to do considerable public speaking to achieve success.
3. Betteridge's law of headlines wins again.
Betteridge's Law of Headlines applies here - but also to pretty much every sentence in the last two paragraphs ending in a question mark.
Edit: Completely forgot to mention the fact that PG has made it abundantly clear that his statements revolve around "the ability to communicate", not some sweeping bias against immigrants - which is absurd in itself, considering how diverse YC funded founders are. I think it's really unfortunate that people seem to want to exploit his candor, when he's essentially giving helpful advice to immigrant founders that it would be well worth their time and effort to improve their communication skills.
Had the author spent even a few minutes researching this, he could have easily discovered the full context of PG's quotes, PG's clarifications, and the fallacy of his investor == employer logic, which really makes it look like he's trying to deliberately mislead readers.
Maybe it's time for PG to update his "What you can't say" essay:
http://www.paulgraham.com/say.html
So it's OK to discriminate when investing because it's inside a legal loophole?
Clarification: Discrimination based on race, ethnicity, etc is bad. But employers need to be able to hire based on the ability to do one's job. If a large part of one's job is to communicate... things start to get murky.
I was simply pointing out that the OP's reason for being able to disregard the Civil Rights Act is because it's in a legal loophole, not because there are substantial differences that mean it shouldn't be applied.
YC is slightly different because the relationship is closer, sure, but it is still an investor/investee relationship. I think its still a case like the former. I'm not sure I'd agree entirely that its a loophole.
Investors are in the business of gauging likelihood of success.
As an extreme example, consider the following scenario: You are an investor during WWII. The Japanese are discriminated against by the general public, and you're considering investing in a company with Japanese founders. You're aware that the company will face significant difficulties because of their race in this climate.
It's not unreasonable to forgo investing. The company's chances of success are significantly lower than they would be if the founders were white (in the climate of WWII).
Were you required by law not to discriminate, you would be forced to invest in a company you didn't expect to succeed.
Of course, you could argue that this isn't discrimination because the actual reason is based on likelihood of success rather than prejudice, which is the case for YC. PG argues that strong accents, which are difficult to decipher, are indicative of sub-par communication skills, and are therefore relevant to the success of the company.
But aren't employers in the business of gauging likelihood of success in prospective employees? In everything you've just written, how is investment substantially different from hiring?
But that's not really the point - we are entering a period where many, perhaps most "jobs" will be as freelancers or in small professional tribes. We stop thinking of the global elite and start thinking about everyone, including the vulnerable - and employers (or investors) will be able to exploit these new self-employed workers. But we are not sure how or where they will exploit them.
I think we can see an age of wonders ahead - but as always ages of wonders need hard-headed regulation to succeed (I am thinking factory safety legistlation to stop children crawling into looms not the stuff politicians complain about).
So, I say we are likely to wait and react to the way the world has changed. To put it loosely, we need to see children being forced into looms, before we realise that's a problem and ban it. And the fact that this will all be done in different countries only complicates matters enormously - the next health and safety legistlation movement will come from the WTO.
And no, pg wanting to clearly understand his investees maybe on the edge, but its not exploitation, nor socially undesirable, so it is not an indicator of the new problems we shall see.
Edit: Hippo related rewrite basically
There are some other anti-discrimination laws that affect other business relationships, with different provisions, but largely they address things like housing and public accommodations, which a startup incubator decidedly is not, and, in any case, looking at Title VII's particular rules isn't useful to evaluating of those other laws would apply anyway.
If you want to look at whether YC is doing something illegal, you need to do the work to find a law that is actually applicable to what YC does.
If you want to argue that YC is doing something immoral, then bringing in an irrelevant law is both unnecessary and unhelpful.
The article here is lazy and pointless.
You choose to invest or not based on any criteria you like, and the aesthetics of a presentation is better grounds than most.
But there's a larger argument here that is moral, not legal. There is a reason why Title VII exists. Are those reasons equally applicable to investor situations, and if so, is Y Combinator acting against the spirit of Title VII?