Venture Capitalists Divided | News, Sports, Jobs

LOS ANGELES (AP) — Being a venture capitalist carries a lot of prestige in Silicon Valley. Those who select startups for funding see themselves as backers of the next big wave of technology.

So when some of the biggest names in the industry endorsed former President Donald Trump and his vice presidential pick J.D. Vance, people took notice.

Then, hundreds of other VCs—some well-known, some lesser-known—threw their weight behind Vice President Kamala Harris, drawing battle lines over which presidential candidate would be better for tech innovation and the conditions startups need to thrive. For years, much of Silicon Valley’s political discourse has taken place behind closed doors. Now, those loose debates have gone public—on podcasts, social media, and online manifestos.

Venture capitalist and Harris supporter Stephen DeBerry says some of his best friends support Trump. While the central Northern California region is known for its liberal politics, investors who help bankroll the tech industry have long been more politically divided.

“We ski together. Our families are together. We’re super-close,” said DeBerry, who runs the Bronze Venture Fund. “It’s not like we can’t talk to each other. I love these guys — they’re almost all guys. They’re close friends. We just have different perspectives on politics.”

The question remains whether the more than 700 venture capitalists who have expressed support for the “VCs for Kamala” movement will match the promises of wealthy Trump supporters like Elon Musk and Peter Thiel. But the effort marks “the first time I’ve seen a mobilized group of people in our industry come together and rally around our shared values,” DeBerry said.

“There are a lot of practical reasons for VCs to back Trump,” including policies that could boost corporate profits and stock market values ​​and favor wealthy benefactors, said David Cowan, an investor at Bessemer Venture Partners. But Cowan said he backed Harris as a VC with a “long-term investment horizon” because “Trump’s world, reeling from rampant income inequality, raging wars and global warming, is not an attractive environment” for financing healthy businesses.

Several prominent venture capitalists have expressed their support for Trump on Musk’s social media platform X. Public records show that some have donated to a new pro-Trump super PAC called America PAC, whose donors include influential tech conservatives with ties to SpaceX and PayPal who operate in Musk’s social circle. Support has also been fueled by Trump’s embrace of cryptocurrencies and his promise to end repression of the industry.

While some of Biden’s policies have alienated parts of the investment sector concerned about tax policy, antitrust scrutiny or overregulation, Harris’ presidential bid has reignited interest from VCs who had previously sat on the sidelines. Part of that excitement stems from existing relationships with Silicon Valley, stemming from Harris’ career in the San Francisco area and her time as California attorney general.

“We’re buying risk, right? And we’re trying to buy the right kind of risk,” Leslie Feinzaig, founder of VCs for Kamala, said in an interview. “It’s really hard for these companies that are trying to build products and scale to do that in an unpredictable institutional environment.”

The tech industry schism has divided some companies over loyalties. Although venture capitalists Marc Andreessen and Ben Horowitz, founders of the company they are namesake, have endorsed Trump, one of their firm’s general partners, John O’Farrell, has pledged his support for Harris. O’Farrell declined to comment further.

Doug Leone, a former managing partner of Sequoia Capital, endorsed Trump in June, expressing concerns about X “the overall direction of our country, the state of our broken immigration system, the growing deficit and foreign policy failures, among other issues.” But Leone’s longtime business partner at Sequoia, Michael Moritz, wrote in the Financial Times that tech leaders supporting Trump are “making a huge mistake.”

Shaun Maguire, a partner at Sequoia, posted on X that he donated $300,000 to Trump’s campaign after endorsing Hillary Clinton in the 2016 presidential election. Federal Election Commission records show Maguire donated $500,000 to America PAC in June; Leone donated $1 million.

“The area where I disagree with Republicans the most is women’s rights. And I’m sure I’ll disagree with some of Trump’s policies in the future,” Maguire wrote. “But overall, I thought he was surprisingly prescient.”

Feinzaig, a managing director at venture capital firm Graham & Walker, said she launched VCs for Kamala because she felt frustrated that the “loudest voices” were starting to “sound like they speak for the entire industry.”

Much of the VC discussion about the election is a response to a July podcast and manifesto in which Andreessen and Horowitz endorsed Trump and laid out their vision for a “Small Tech Agenda” that they say contrasts with the policies desired by Big Tech.

They accused the U.S. government of growing hostility toward startups and the venture capital funds that fund them, citing Biden’s proposed higher taxes on the wealthy and corporations and regulations that they say could cripple emerging industries using blockchain and artificial intelligence.

Vance, a U.S. senator from Ohio who spent time in San Francisco working at Thiel’s investment firm, expressed a similar perspective on “small tech” more than a month before he was selected as Trump’s vice presidential running mate.

“The donors who have really been engaging with Silicon Valley in a pro-Trump way are not big tech, right? They’re small tech. They’re starting innovative companies. They don’t want government to destroy their ability to innovate,” Vance told Fox News in June.

A few days earlier, Vance joined Trump at a fundraiser in San Francisco at the home of venture capitalist and former PayPal executive David Sacks, a longtime conservative. Vance said Trump spoke to about 100 attendees, including “some of the leading innovators in AI.”

DeBerry said he doesn’t object to everything the Andreesen Horowitz founders stand for, particularly their concerns about large companies controlling the agencies that regulate them. But he does object to their take on “small tech,” especially coming from a multibillion-dollar investment firm that he says isn’t the voice of the small guy. For DeBerry, whose firm focuses on social impact, the choice isn’t between big tech and small tech, but between “chaos and stability,” and Harris represents stability.

Complicating allegiances is that a hard-line approach to breaking up the monopoly power of big corporations no longer follows party lines. Vance has spoken favorably of Lina Khan, Biden’s pick to chair the Federal Trade Commission, and has taken on several tech giants. Meanwhile, some of Harris’s most influential venture capital backers—such as LinkedIn co-founder Reid Hoffman; and Sun Microsystems co-founder Vinod Khosla, an early investor in OpenAI, the creator of ChatGPT—have sharply criticized Khan’s approach.

U.S. Rep. Ro Khanna, a Democrat whose California district includes part of Silicon Valley, said Trump’s supporters are a vocal minority, reflecting “one-third or less” of the region’s tech community. But while the White House has appealed to tech entrepreneurs with its investments in clean energy, electric vehicles and semiconductors, Khanna said Democrats need to do a better job of showing they understand the appeal of digital assets.

“I think the perceived lack of acceptance of Bitcoin and blockchain technology has hurt the Democratic Party among the younger generation and young entrepreneurs,” Khanna said.

Naseem Sayani, a general partner at Emmeline Ventures, said Andreessen and Horowitz’s endorsement of Trump has become a lightning rod for those in the tech industry who don’t support the Republican candidate. Sayani signed on to “VCs for Kamala,” she said, because she wanted the types of companies she helps fund to know that the investment community is not monolithic.

“We’re no longer a single-profile founder,” she said. “There are women, there are people of color, there are all these intersections. How can they feel comfortable building businesses when the environment they’re in is not, in some ways, supportive of their existence?”

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