The tech titans’ swing to the right is so last week.
This week, the suddenly reset presidential race has given voice to a different cast of investors and entrepreneurs who are just as resolutely pro-climate, pro-diversity, and even pro-immigration. They are pushing back against the likes of Elon Musk, Marc Andreessen, David Sacks and Chamath Palihapitiya, who last week lined up behind former President Donald Trump.
The overheated presidential campaign has become an arena for a broader competition of ideas about the purpose of innovation and investment itself, and the policies that best nurture it toward scalable solutions to urgent challenges.
At stake in that competition are trends in venture capital and private equity broadly, and impact investing specifically, as institutional investors and the fund managers that cater to them line up behind federal policies and leadership on climate, crypto and global engagement itself. In recent years, federal tailwinds have buoyed gains in worker power, domestic clean tech supply chains, and green jobs in left-behind communities.
Just as the nomination of Ohio Sen. JD Vance, a former venture capitalist, created a permission structure for “tech bros” to back Trump, the sudden elevation of Vice President Kamala Harris to almost-presumptive Democratic nominee unleashed a flurry of proclamations that tech might have more to gain from a progressive agenda.
“Democrats have some well-needed momentum today and the tide is shifting,” Aaron Levie, CEO of the cloud software company Box, wrote on X. Democrats, he said, “could be the party that is wildly pro tech, trade, entrepreneurship, immigration, AI, and science if it so chooses.”
Reid Hoffman, the billionaire founder of LinkedIn, explicitly endorsed Harris and called Democrats “the party of policy, progress, and action.”
Longtime Silicon Valley venture capitalist Ron Conway said Harris had long been “an advocate for the tech ecosystem.” He proclaimed, “The tech community must come together to defeat Donald Trump and save our democracy by uniting behind Vice President Kamala Harris.”
Hype cycle
The pushback against the rightward swing of some “tech bros” began even before the elevation of Harris shook up the presidential race. Trump had picked up endorsements from a cadre of tech billionaires, from Elon Musk to Sequoia Capital’s Doug Leone after naming former venture capitalist and Hillbilly Elegy author JD Vance for his running mate.
It was the announcement by A16Z founders Marc Andreessen and Ben Horowitz, both longtime Democratic supporters, that sent shockwaves through Silicon Valley.
The duo’s about-face boiled down to three narrowly focused issues: AI, crypto and preventing the so-called billionaire’s tax on unrealized capital gains. The duo explained on their podcast that they were making a decision based solely on their perception of what was best for tech innovation and entrepreneurship, without regard to issues such as abortion or immigration.
Rob Day of Spring Lane Capital, a climate tech and infrastructure investor in Boston, was among the first to speak out, tweeting last week, “We, who actually support important innovation on the ground, dissent.”
Private equity investors, including venture capitalists, have long benefited from preferential tax treatment for their carried interests, or “carry,” meaning the profits on their investments.
“Venture capital is supposed to be about building things, not protecting your carry,” Day posted. “Venture capital is supposed to be about fixing problems not making them worse. I feel like A16Z have declared they no longer are in the same industry as us.”
Day, a registered Republican, said he felt the need to speak out on behalf of entrepreneurs, who have to seek investments from VCs like Andreessen and Horowitz. “What entrepreneur wants to stick their neck out and say, we disagree?” What entrepreneurs need, Day told ImpactAlpha, are policies that are pro-immigration, pro-diversity and pro-climate.
“Are you going to support entrepreneurs by worrying about venture capital’s carry? Or are you going to support entrepreneurs by worrying about these much broader market policy shifts that need to take place?”
Immigration politics, in particular, land differently in Silicon Valley than in some other regions.
From its earliest days, the technology industry has been driven by immigrants. Andy Grove, who fled Hungary during the 1956 revolution at the age of 20, famously founded Intel. As president, Trump had restricted visas for skilled workers and startup founders. As a candidate, he has demonized immigrants and vowed to conduct mass deportations.
“The innovation economy is fueled by the best & brightest from around the world coming here,” tweeted Seth Bannon of deep tech startup Fifty Years. “Wild to see ‘pro startup’ folks endorse the most anti-immigration president in modern times.
Venture capitalist Vinod Khosla got into an online back-and-forth with Musk, who was urging him to climb aboard the Trump train.
“Hard for me to support someone with no values, lies, cheats, rapes, demeans women, hates immigrants like me,” Khosla said. “He may cut my taxes or reduce some regulation but that is no reason to accept depravity in his personal values. Do you want a President who will set back climate by a decade in his first year? Do you want his example for your kids as values?”
The pushback against the backlash also took the form of a celebration of diversity as a driver, not a drag, on innovation and growth. The tech billionaires lining up beyond Trump and Vance have long scoffed at efforts around diversity. PayPal founders Peter Thiel and David Sacks denounced “politically-correct “multiculturalism” in higher education way back in their 1998 book, “The Diversity Myth.” In certain Silicon Valley circles, the term DEI, shorthand for diversity, equity and inclusion, has been derided as antithetical to “MEI,” for merit, excellence, and intelligence.
“The ethos of tech that I know is one of increasing freedom, human potential, and connection. It’s of lifting people of all walks of life up and bringing them together,” wrote Ramez Naam of PlanetaryVC, a Seattle-based venture firm. “Donald Trump and today’s GOP are anathema to that.”
Some of the enthusiasm for Trump may have been as simple as the desire to back what looked like a winner in the last few weeks as President Biden’s support evaporated and polls swung toward the former president after the Republican convention and the assassination attempt.
The endorsements evoked a sort of new Gilded Age, Shomik Dutta of Overture Climate VC in Santa Monica, Calif, told ImpactAlpha. He said under Biden, the US economy became slightly less unequal, with returns on wages exceeding returns on capital, sparking a backlash.
“The owners of capital are deeply sensitive to the times when the return on wages exceed the returns they’re making themselves,” he said. “Elites who hold concentrated power want to hold on to that power, and very much see Trump as a pathway to being able to give them lower taxes, accelerate AI, and ensure that the sort of gilded class in Silicon Valley can continue to do whatever they want.”
But they might have made their move too early, Dutta suggested.
“It’s a classic VC move to buy into the top of a hype cycle,” he quipped. “It’s like Bitcoin in 2015 – right before a crash.”
Climate opportunity
Biden leaves behind noteworthy achievements including passing landmark legislation in a deeply divided political climate on climate action, infrastructure and semiconductor chips that are already creating good-paying jobs and rebuilding domestic supply chains in the kind of left behind places that Vance and Trump like to talk about.
Indeed, it is an oddity that venture capitalists attuned to the next big thing, such as Andreesen Horowitz, have sat out the climate transition, which has been called the greatest wealth generating opportunity of a lifetime. Fueled by cheaper, cleaner, abundant sources of power, the transition will transform virtually every sector of the economy.
For all of Trump’s talk about “America First,” it has been the Biden administration that has sparked a historic reshoring of industry in key growth sectors such as EVs, chips and renewable energy. The Greenhouse Gas Reduction Fund is catalyzing a nationwide green lending network that can reach deep into underserved communities.
For some entrepreneurs, the jitters of the past few weeks over the fate of elements of Biden’s agenda, such as the climate provisions of the Inflation Reduction Act, were gradually giving way to something like cautious optimism.
“We have this opportunity, a second bite at the apple to really do a transformative green infrastructure program for our country,” Donnel Baird, the founder of BlocPower, a Brooklyn-based startup focused on green retrofits for aging buildings, said at a conference.
On the world stage, the US has reclaimed a leadership role in climate negotiations after the Trump administration pulled out in 2016.
“America can’t afford to withdraw from climate progress for four years,” said California-based climate investor and former presidential contender Tom Steyer in a statement. “Not only will that bring immense human suffering and continued destruction of the natural world, it will deeply hinder the US’s ability to participate in the economic opportunity of the transition, a race that China is threatening to dominate.”
This spring, Steyer appeared onstage with philanthropist Laurene Powell Jobs, at the San Francisco gathering of Elemental Excelerator, the nonprofit climate tech investor. Powell Jobs, chair of Elemental’s board and one of the wealthiest women in the world, is considered a close friend of Harris and backed her presidential bid in 2019. She has yet to comment publicly on the newly reshaped presidential race.
Spring Lane’s Rob Day urged investors to become more vocal, not just in the presidential race, but in the larger debate with investors such as Paypal co-founder and Trump-Vance backer Peter Thiel about the future – and the purpose – of tech.
“Don’t let Thiel define Sand Hill Rd, VC friends,” he tweeted. “Speak up if you don’t agree with him on politics because, trust me, you’re all very, very close to being defined for years to come by his actions and now his followers among other big VCs. Don’t be surprised later.”
Roodgally Senatus contributed reporting to this article.
