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States that are hostile toward abortion face backlash from corporations. What about startups?

In a new survey of VC-backed startup founders, almost half said they plan to scale back recruitment in states that ban or restrict abortion.

States that are hostile toward abortion face backlash from corporations. What about startups?
[Photo: Phillip Nelson/iStock/Getty Images Plus]

In the wake of the Supreme Court’s decision to overturn Roe v. Wade on June 24, a long list of companies announced that they will cover travel costs or expand healthcare benefits for employees who may be affected by the ruling. Insurance company Embroker, meanwhile, recently asked over 500 venture capitalist-backed startup founders to consider how their businesses will be affected, and found that 42% of respondents planned to limit employee recruitment in states that are banning or restricting abortion. 

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The survey, released last week, asked respondents to consider how the overturning of Roe v. Wade will impact company recruitment and hiring strategies, whether the ruling is a cause for concern to the company, and if plans to change business strategies are being examined.

Most of the survey respondents run startups in traditionally blue states, with 25% located in the Pacific and 23.5% located in the Middle Atlantic regions of the United States. A slight majority of the respondents—just over 53%—were female. 

The Supreme Court’s ruling has prompted these founders to consider the effects a post-Roe world will have on their companies, though the majority of responses reflect a lack of intent to change hiring practices. Fifty-three percent of founders intend to continue recruitment in states that are limiting abortion rights, though they plan to increase health benefits for those employees. 

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While over 80% of those surveyed have communicated with their employees about the potential effects the ruling may have on their businesses, only 39% of founders say that they have been vocal about their beliefs outside of the work environment. This lack of external discourse may reflect a fear of isolating employees and investors–75% of respondents said they are concerned that taking a stance on Roe v. Wade could affect their company’s reputation. 

Many founders expressed a desire to increase their responses to the ruling. Over a third—36%—of those surveyed said that while they wished they could better support employees in a post-Roe environment, they lacked the resources to do so. 

Eric Blancke, head of insurance at Embroker, explained that startups often lack the financial flexibility that corporations have when taking a stance on topics deemed controversial. “Smaller businesses face more practical concerns like potential customer backlash or lost revenue–consequences that are harder and innately riskier for startups to absorb,” he said in a statement.

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