The founders of startup companies funded by venture capital may feel that they have much more at stake than large established businesses when it comes to providing employer-sponsored benefits in the wake of the Supreme Court’s overturning of Roe v. Wade, a new survey shows.
The survey of 500 founders of VC-backed startups by Embroker, an insurance consulting company, was conducted in July and found that 42% of the founders are more likely to limit their recruiting efforts in states that have tough abortion restrictions, and those states might suffer adverse economic fallout as a result.
Meanwhile, 53% of startup founders say that they will not limit recruiting efforts in such states, but they will update their health benefits to remove roadblocks to employees seeking abortions.
“Startups face unique risks in light of the decision due to their size and more limited resources as compared to large corporations,” the Embroker press release said. “This is seen in the findings, as over a third (36%) of founders surveyed said they wish they could make adjustments to better support staff impacted by the decision, but currently lack the resources to do so. Another 31% plan to increase benefits and care options for employees to help mitigate risks resulting from the Supreme Court decision.”
While the stakes and risk might be higher for startups, most businesses have to figure out what to do about health benefits. Some of the bigger companies have made bold moves, such as Dick’s Sporting Goods announcing that it will cover employees’ travel expenses up to $4,000 if they seek an abortion. Dick’s unveiled its plan on June 24, the very same day that the Supreme Court overturned Roe v. Wade with its decision in Dobbs v. Jackson Women’s Health Organization.
Other companies have moved more cautiously, with the largest private employer in the U.S.—Walmart—being an obvious example. Last Friday, Walmart announced that it too would offer travel expenses to employees seeking abortions
Walmart will also cover abortions “when there is a health risk to the mother, rape or incest, ectopic pregnancy, miscarriage or lack of fetal viability,” according to a company memo. Before Dobbs, Walmart covered abortions in cases when the mother would be in danger if the fetus were carried to term, the fetus wouldn’t survive being born or would die shortly after birth.
Other findings in the Embroker survey:
- 31% of VC-backed startup founders plan on increasing insurance benefits/care options for employees.
- 44% are worried about disruption to their business due to increased employee maternity leave or pregnancy-related needs.
- Over a third (36%) said they wish they could make adjustments to better support staff impacted by the decision but currently lack the resources to do so.
In addition, while 80% of startup founders talked about the Dobbs decision with employees, only 39% chose to talk publicly about it.
“Despite many being vocal both inside and outside their organizations, the risk around their reputation is top-of-mind, with 75% of founders concerned that their company’s stance on the ruling may impact their reputation,” Embroker said in the release. “This includes their reputation as a leader in the startup community (45%) as well as with clients/customers (42%), their employees (42%), their personal reputation (38%), and investors (32%).”
Respondents also have legal concerns, with 43% fearful of lawsuits against management as a result of statements about reproductive benefits, and employee filing claims over discrimination, wrongful termination, equal pay and other issues.
“Concern over data privacy and protection has also intensified significantly, with four out of five founders citing a legitimate uptick in concern about the safety of their private data in light of the recent ruling,” according to the release. “What’s more, nearly half (47%) of total respondents ranked themselves as being ‘very concerned’ about a greater risk for legal battles, potential leaks, and targeted domestic cyberattacks under the circumstances.”