VCs backing Kamala Harris want to ‘buy the right kind of risk’

So when some of the industry’s biggest names endorsed former President Donald Trump and the former VC he picked for a running mate, JD Vance, people took notice.

Then hundreds of other VCs — some high-profile, some lesser known — threw their weight behind Vice President Kamala Harris, drawing battle lines for which presidential candidate would be better for tech innovation and the conditions they need startups to thrive. For years, many of Silicon Valley’s policy discussions took place behind closed doors. Now, those occasional debates have gone public — on podcasts, social media and online manifestos.

Stephen DeBerry, the venture capitalist and backer of Harris, says some of his best friends support Trump. Although concentrated in a part of Northern California known for liberal politics, the investors who help fund the tech industry have long been a more politically divided group.

“We were skiing together. Our families are together. We’re very tight,” said DeBerry, who runs the Bronze Venture Fund. “It’s not about not being able to talk to each other. I love these guys – they’re almost all guys. They are dear friends. We just have a difference of perspective on policy issues.”

It remains to be seen whether the more than 700 venture capitalists who have expressed their support for a movement called “VC for Kamala” will match the pledges of beloved Trump backers like Elon Musk and Peter Thiel. But the effort marks “the first time I’ve seen a galvanized group of people in our industry come together and unite around our shared values,” DeBerry said.

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

Several prominent VCs have voiced their support for Trump on Musk’s X social platform. Public records show some of them have donated to a new pro-Trump super PAC called America PAC, whose donors include tech powerhouse conservatives with ties to SpaceX and Paypal and who run in Musk’s social circle. Support is also driven by Trump’s embrace of cryptocurrency and promise to end a crackdown on the industry.

While some Biden policies have alienated parts of the investment industry concerned with tax policy, antitrust control or overregulation, Harris’ bid for the presidency has rekindled the interest of venture capital that until recently sat on the sidelines. Part of that excitement is due to existing ties to Silicon Valley, which stem from Harris’ career in the San Francisco area and her time as California’s attorney general.

“We buy risks, 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 very hard for these companies that are trying to build products and scale to do so in an unpredictable institutional environment.”

The tech schism has left some firms divided in their beliefs. Although venture capitalists Marc Andreessen and Ben Horowitz, founders of the firm that bears their name, have endorsed Trump, one of their firm’s general partners, John O’Farrell, has pledged his support for Harris. O’Farrell declined further comment.

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

Shaun Maguire, a partner at Sequoia, posted on X that he donated $300,000 to the Trump campaign after endorsing Hilary 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 the most with Republicans 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 think he was surprisingly prescient.”

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

Much of the VC’s speech about the election is a response to a July podcast and manifesto in which Andreessen and Horowitz endorsed Trump and outlined their vision of a “Small Tech Agenda,” which they said contrasts with the policies pursued by Big Tech.

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

Vance, a U.S. senator from Ohio who spent time in San Francisco working at Thiel’s investment firm, expressed a similar view of “small tech” more than a month before he was tapped as a partner of Trump’s candidate.

“The donors who were really involved in Silicon Valley in a pro-Trump way, they’re not big tech, right? They are a bit technical. They start innovative companies. They don’t want the government to destroy their ability to innovate,” Vance said in an interview with Fox News in June.

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 that included “some of the leading innovators in AI.”

DeBerry said he doesn’t agree with everything Andreesen Horowitz’s founders advocate, particularly the focus on powerful companies that control the agencies that regulate them. But he objects to their “small tech” framing, especially coming from a billion-dollar investment firm that he says is not the voice of the little guy. For DeBerry, whose firm focuses on social impact, the choice is not between big and small technology, but “chaos and stability,” with Harris representing stability.

Complicating the supplements is that a tough approach to destroying the monopoly power of big corporations no longer falls along partisan lines. Vance spoke favorably of Lina Khan, whom Biden picked to lead the Federal Trade Commission, and took on several tech giants. Meanwhile, some of the most influential VCs backing Harris — like LinkedIn co-founder Reid Hoffman; and Sun Microsystems co-founder Vinod Khosla, an early investor in ChatGPT maker OpenAI, sharply criticized Khan’s approach.

U.S. Rep. Ro Khanna, a Democrat whose California district includes part of Silicon Valley, said Trump supporters are a vocal minority that reflects “a 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 has hurt the Democratic Party among the younger generation and among young entrepreneurs,” Khanna said.

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

“We’re no longer single-profile founders,” she said. “It’s women, it’s people of color, it’s all the intersections. How can they feel comfortable building businesses when the environment they’re in doesn’t actually support their existence in some way?”