Prominent Silicon Valley Investors Turn Against Biden

Support for Trump was taboo in the liberal bastion, but frustration with Biden has driven some influential venture capitalists to the right.

By Erin Griffith

In 2021, David Sacks, a prominent venture capital investor and podcast host, said former President Donald Trump’s behavior around the Jan. 6 riot at the U.S. Capitol had disqualified him from being a future political candidate.

At a tech conference last week, Sacks said his view had changed.

“I have bigger disagreements with Biden than with Trump,” the investor said. Sacks said he and his podcast co-hosts were working on hosting a fundraiser for Trump, which could include an interview for their “All In” show. They also extended an invitation to President Joe Biden, he said, but the Trump camp was more open to it.

Such public support for Trump used to be taboo in Silicon Valley, which has long been seen as a liberal bastion. But frustration with Biden, Democrats and the state of the world has increasingly driven some of tech’s most prominent venture capitalists to the right.

Some investors, like Chamath Palihapitiya of Social Capital, backed Democrats in the past. (He is set to co-host the fundraiser for Trump alongside Sacks.) Others, like Marc Andreessen of Andreessen Horowitz and Shaun Maguire of Sequoia Capital, have criticized Biden without expressing support for Trump. Still others, like Keith Rabois of Khosla Ventures, are focusing their efforts on electing Republicans to Congress.

The activity may amount to more noise than formal support or personal donations for Trump’s campaign. And it is by no means everyone. Much of Silicon Valley, including prominent donors like investors Reid Hoffman and Vinod Khosla, remains loyal to Democrats. Peter Thiel, the investor who backed Trump in the past, has said he is disillusioned with politics and plans to stay out of the 2024 race.

But the tech investors who are leaning right are influential, with enormous followings on social media and lots of money — and they are becoming more politically engaged. That reflects how the startup industry has grown — soaring eightfold between 2012 and 2022 to $344 billion, according to PitchBook, which tracks startups — with more of the industry’s issues turning political in nature.

“When I started, everybody cared about tax issues and immigration issues,” said Bobby Franklin, who has led the National Venture Capital Association, a trade group, since 2013. “Now it is so much more complex.”

Delian Asparouhov, an investor at Founders Fund, the investment firm founded by Thiel, recently marveled at how much the political winds had shifted. This month, Trump made a virtual appearance at a venture capital conference in Washington. There, he thanked attendees for “keeping your chin up” and said he looked forward to meeting them.

“Four years ago you had to issue an apology if you voted for him,” Asparouhov wrote on the social platform X.

Sacks, Palihapitiya and Founders Fund did not respond to a request for comment. Sequoia Capital declined to comment.

Thiel’s loud and enthusiastic support for Trump in 2016, which included a $1.25 million donation and a speech at the Republican National Convention, came as a shock. Even more surprising to some in the industry was the way that, after Trump won the election that year, the world seemed to blame tech companies for his victory. The resulting “techlash” against Facebook and others caused some industry leaders to reassess their political views, a trend that continued through the social and political turmoil of the pandemic.

During that time, Democrats moved further to the left and demonized successful people who made a lot of money, further alienating some tech leaders, said Bradley Tusk, a venture capital investor and political strategist who supports Biden.

“If you keep telling someone over and over that they’re evil, they’re eventually not going to like that,” he said. “I see that in venture capital.”

That feeling has hardened under Biden. Some investors said they were frustrated that his pick for chair of the Federal Trade Commission, Lina Khan, has aggressively moved to block acquisitions, one of the main ways venture capitalists make money. They said they were also unhappy that Biden’s pick for head of the Securities and Exchange Commission, Gary Gensler, had been hostile to cryptocurrency companies.

The startup industry has also been in a downturn since 2022, with higher interest rates sending capital fleeing from risky bets and a dismal market for initial public offerings crimping opportunities for investors to cash in on their valuable investments.

Some also said they disliked Biden’s proposal in March to raise taxes, including a 25% “billionaire tax” on certain holdings that could include startup stock, as well as a higher tax rate on profits from successful investments.

Sacks said at the tech conference last week that he thought such taxes could kill the startup industry’s system of offering stock options to founders and employees. “It’s a good reason for Silicon Valley to think really hard about who it wants to vote for,” he said.

Last month, Sacks, Thiel, Elon Musk and other prominent investors attended an “anti-Biden” dinner in Hollywood, where attendees discussed fundraising and ways to oppose Democrats, a person familiar with the situation said. The dinner was earlier reported by Puck.

The shifting attitudes mirror the country’s broader frustrations with both parties, said Franklin. “Tech, venture capital and Silicon Valley are looking at the current state of affairs and saying, ‘I’m not happy with either of those options,’” he said. “‘I can no longer count on Democrats to support tech issues, and I can no longer count on Republicans to support business issues.’”

Ben Horowitz, a founder of Andreessen Horowitz, wrote in a blog post last year that the firm would back any politician who supported “an optimistic technology-enabled future” and oppose any who did not. Andreessen Horowitz has donated $22 million to Fairshake, a political action group focused on supporting crypto-friendly lawmakers.

In November, a group of prominent investors and startup founders signed an open letter to Biden criticizing an executive order aimed at creating safeguards around the development of artificial intelligence. They accused him of stifling innovation.

Venture investors are also networking with lawmakers in Washington at events like the Hill & Valley conference in March, organized by Jacob Helberg, an adviser to Palantir, a tech company co-founded by Thiel. At that event, tech executives and investors lobbied lawmakers against AI regulations and asked for more government spending to support the technology’s development in the United States.

This month, Helberg, who is married to Rabois, donated $1 million to the Trump campaign. The donation was earlier reported by The Washington Post.

c.2024 The New York Times Company. This article originally appeared in The New York Times.

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