I got an email from the CEO of one of our portfolio companies last week.

It asked a very basic question, but one that I don’t recall being asked before:

I need to know if any of your LPs include ………. entities/interests.

The CEO asked his VCs because questions were coming up internally and he wanted to answer honestly and accurately.

I expect to get more emails like this in the coming weeks as the startup and venture community comes to grip with the flood of money from bad actors that has found its way into the startup/tech sector over the last decade.

“Bad actors” doesn’t simply mean money from rulers in the gulf who turn out to be cold blooded killers. It also means money from regions where dictators rule viciously and restrict freedom. It could also mean money from business interests which profit by poisoning us with opioid addiction or warm our planet with fossil fuels.

I don’t claim to have entirely clean hands in this regard. When we sold our Twitter stock before the IPO many years ago, it turned out the buyer was fronting for gulf interests. I found that out after the fact but that doesn’t absolve me of anything. I could have asked the questions before executing the sale.

That said, I believe the investors in the USV funds we have raised over the years are ones we can be proud of. They include large pension funds for public employees like teachers, firemen, police, and the like. They include the family offices of some of the great entrepreneurs of the 20th century. They include endowments of some of the best research and educational institutions in the US. And they include the founders and leaders of some of the best companies that USV has invested in over our 15 years. And we manage funds for a few charitable foundations too.

It is time for all of us in the startup and VC sector to do a deep dive on our investor base and ask the question that the CEO asked me. Who are our investors and can we be proud of them? And do we want to work for them?

Sadly, the answer for many will be no and it will not be easy to unwind those relationships.

Those who can be proud of their investor base stand to gain from this emerging situation as our portfolio companies can recruit and retain talent better and we can compete with others in the market for deals with one more arrow in our quiver.

Not all money is the same. The people that come with it and who are behind it matter. That has always been the case and remains the case and we are reminded of it from time to time. Like right now.