Deal Terms
Inclusion Rider
A contractual provision requiring diversity standards in hiring, governance, or vendor selection as a condition of investment.
An inclusion rider in venture capital is a contractual provision that sets diversity and inclusion requirements as conditions of investment. Borrowed from the entertainment industry (where actors contractually require diverse casting), VC inclusion riders might require diverse candidate slates for executive hires, board diversity minimums, or inclusive vendor selection processes. They represent a structural approach to improving diversity rather than relying on voluntary commitments.
In Practice
The term sheet included an inclusion rider requiring the company to interview at least two candidates from underrepresented backgrounds for every VP-level or above hire, and to maintain at least one independent board member from an underrepresented group within 18 months of closing.
Why It Matters
Inclusion riders move diversity from aspiration to contractual obligation. They're gaining traction among impact investors and progressive VCs who believe diverse teams produce better outcomes and want structural accountability.
VC Beast Take
Inclusion riders remain controversial. Supporters argue they create accountability and overcome unconscious bias. Critics worry about tokenism, legal challenges, and adding friction to hiring processes. The most effective riders focus on process (diverse slates) rather than outcomes (quotas).
Related Concepts
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