Editor’s note: This week’s Startup Showcase features investor and entrepreneur David Gardner, founder of Cofounders Capital in Cary and is a regular contributor to WRAL TechWire.
CARY – It was an interesting election for sure and there is a lot of speculation about how it will affect US innovation, entrepreneurship and tech investors. I found it particularly interesting how venture capital firms came out in support of Biden. They contributed $69.7M (nearly twice as much as in 2016) with nearly 80% of those campaign donations working against a Trump reelection. Many well known VCs like Steve Case of Revolution and Michael Moritz of Sequoia Capital were particularly vocal in their support of a Biden presidency.
Large fund VCs have a reputation for being wealthy and somewhat coin-operated in that they rarely do anything against their own self interest. So, why would they overwhelmingly support a presidential candidate who has repeatedly said that he will raise taxes on anyone making over $400K per year and tax long-term capital gains (over $1M) at ordinary income level; a much higher tax rate? Apparently, these sophisticated VCs believe that whatever Trump is doing is more harmful to their industry, portfolio companies and pocketbooks than Biden’s obvious pound of flesh.
The consensus in the VC community is that a Biden presidency would be better for those doing venture tech investing and better for their portfolio companies even if they have to pay more taxes on their gains. There are many reasons for this but some