Occupy Wall Street and Entrepreneur Investment

Reading many blogs from various VC’s and entrepreneurs, I get the impression that they are on the side of Occupy Wall Street. Or, if they aren’t on their side totally, they are cheering for them.

Here is what I don’t understand. The VC and entrepreneurial community wants to fund businesses that are disruptive, make things horizontal, and decentralized. Currently, many of the hottest businesses take the power from dominant players and put it into the hands of individuals. There is huge power in catering to individual choice, and individual consumers can exert a great amount of influence over the profitability of a company. Freedom is unleashed and the power of that freedom increases productivity and profit. Individual choice benefits the masses.

Yet, when it comes to government, these same VC’s and entrepreneurs contribute, and actively campaign for Democrats. Democrats are the antithesis of where most of them try and earn a return on their investment dollars. Democrats are for huge centrally planned bureaucracies that always screw things up and cater to the middle, not the individual. Freedom is limited and restrained. Certain favored individuals get what they want, but the masses are left in the lurch.

The logic doesn’t add up.

Here is a different way to put it. If you are a VC that supports Occupy Wall Street, don’t invest one new dollar in Silicon Valley or Boston or Austin. They are the 1%. Invest in Detroit or Cleveland. Aren’t they the 99%? If you happen to be fortunate enough to earn a return, donate most of the profit to charity.

That’s what Occupy Wall Street is telling everyone, or at least that’s what I am hearing.

15 thoughts on “Occupy Wall Street and Entrepreneur Investment

  1. It’s too easy for us to discount the power of peer pressure, in this case not necessarily from the VC community but maybe from social peers, especially here in Chicago. When I lived in Wrigleyville a very liberal friend accused me of living in an “echo chamber,” I told him he was right, I lived in Chicago’s 44th Ward with an Anarchist on one side of my me and a Teachers Union organizer on the other….

  2. Generally speaking, there are six reasons why VCs typically vote/support Democrats:
    1) they are socially liberal — live and let live (they do not like/agree with the social/religious conservatives of the GOP);
    2) they like government money going to science/tech/medical research to provide a steady flow of potential businesses for investment (the Democrats are more likely to support these programs); 
    3) they like pro science views (VCs are very rational and highly educated; they do not appreciate anti-science views which many GOP followers promote; e.g., 6,000 year-old universe and creationism);
    4) they live in states which are pro-government, pro-social justice and pro-union (California, New York and Massachusetts are the top states for VC) and thus have a strong bias to Democratic politics (follow the views/culture of the area to get along with their politicians, bureaucrats, neighbors, workers, and professionals);
    5) they utilize these connections (from #4) to get around or work with a centralized state and/or federal government; and
    6) they believe the disruptive qualities of their businesses will succeed regardless of government intrusion (e.g., Microsoft (anti-trust), Google (anti-trust) and Apple (anti-trust)) because these companies are strong enough via their operational/business models and the connections highlighted in #s 4 and 5.

    Therefore, I think VCs are pretty logical with their approach. You and I do not like the governmental approach of DC.  But these VCs accept it as a cost of doing business because they agree with many of the processes related to that system.  However, if South Dakota, South Carolina and Mississippi were the main states for start-ups, then the outlook on things for VC would be much different. Read this interview with Eric Schmidt, Chairman of Google. He expresses some frustration (and so does Andy Grove who Eric highlights in the interview) but ultimately he prefers the devil he knows over the devil he does not.


      1. Yes, to some degree — just like ag, oil, hc, finance, etc.  They all have subsidies/benefits/perks because of government or access to government. For VC, The best example of this is how money managers advocated in the 1970s to change the rules allowing pension funds to invest in alternative assets (I think it was a good decision. But it was highly beneficial to the VC industry especially when there are many SEC rules which prohibit bootstrapped VC oriented operations — helping the bigger monied interests which can deal with the legal hurdles and regulations).

        1. On point 3, I think that the anti science label refers more to the “science is settled” global warming debate as well. I am with the Republicans on that, and don’t think that global warming that will devastate our planet is occurring.

          On point 4 they do, but what is the brand of social justice those govt officials want to mete out?  Most of it is socialist bunk.  VCs ought to be against that, unless of course they want to take no risk and be crony capitalists.

          on point 6, I think you are looking with confirmation bias.  Microsoft, Apple and Google in their infancy never contemplated anti-trust.  They built products that they thought were great and were validated in the market by the consumer.  If you recall, Apple was almost dead in the 90’s.

  3. If that is what you are hearing from #OWS you are getting very limited view.  While there are many voices there is convergence around one issue – Getting corporate $ out of our government. We currently have the best laws and regulations corporate money can buy. The corruption is extensive and without consequence.
    VC/Angel investors and entrepreneurs should be invested in the success and stability of the 99%.  A healthy economy needs a thriving middle class.  What good is world changing technological innovation when the majority of Americans won’t have access to it as all of their income is going to cover food, housing, health care and hopefully college education.Regardless of political leanings – be it Occupy or TeaParty, when the citizenry of this takes to the streets there is an issue.  This is not data to dismiss.

    1. Getting corporate $ our of government is just like squeezing Jello. The Jello just pushes up somewhere else.

      I’m almost totally on board with OWS except their emphasis on going after corporations. Corporations are doing whatever they have to do to move forward and if a politician offers to introduce a favorable bill for them or steer a contract their way in exchange for some $, who is at fault? The politician, of course. You cannot buy something that isn’t for sale.

      O bailed out the auto companies in order to keep the UAW intact. Money to the car companies, then to their employees via wages then to the unions via dues and right back into O’s re-election campaign. If you want corporate $ out of politics, then I want union $ out, too. Tip: ain’t gonna happen. Easier to throw the bums out or term limit them.

      1. It is very much chicken and egg.  And I do think the jello will push up somewhere else — maybe back into product research (naive, I know).  
        I think it is important to separate out Capitalism and Corp control $ influence.  Myself, and most of the Occupy folks (I am in San Francisco) don’t have a problem with Capitalism, when it is working.  Simply looking at the wealth distribution it is clear we are approaching or are in a Banana Republic.  Not only is it not sustainable, it will crush our economy and possibly our Government.  In addition, I don’t think that is the America any of us want.  I am probably the 3% (haven’t run the numbers), and I want the guy at the hardware store to be able to live in a safe neighborhood, buy food, take his kids to Disneyland and pay for their healthcare.  Currently, unless he inherited a home from his parents there is no way that is possible.  That is the problem.With the current structure politicians need ungodly amounts of money to run for office, now with Corp personhood they can have it all from Corps (including foreign).  Sure you can say – toss out the cronies who have been bought off, but unless you are an independent multi-millionaire you cannot run for office with out Corp $.

        O did bail out the auto corps with strict pay back restrictions, and if I remember correctly ‘we’ ended up making $ on the deal.  The banks no so much.  When Clinton repealed Glass-Steagall it gave free rain to bad actors, and they still have not been reeled in.  These are the kind of things I am talking about. WS traders making millions which are not classified as income, which they made off of their bundled toxic assets.  You know what I am talking about – it is all so blatantly unethical and we all know it.

        Good lord – I’ve got to get back to work!  Enjoying the conversation.  Disruption is good, it takes us to the next level.  Time to hack America!  = )

        1. Wooo, long day on the road! Just got back in and saw your very thoughtful reply. We’re not that far apart, at all. In fact, you just agreed with me, though you may not realize it. I said the problem lies with the politicians and so did you, right here:  “When Clinton repealed Glass-Steagall…”  The problem does, in fact, lie with the politicians.

          If the OWS crowd had an ounce of sense, they would pick up their iPhones and call their parents and older siblings in the Tea Party and say, “You guys beat us to the punch. You were raising hell before we were and you have grown into a powerful political force. We’re not so different. Let’s join forces and clean house. Show us how to do it.”

          Not gonna happen. The OWS crowd suffers from the fatal conceit that they are still mostly very young and therefore know more than anybody else and cannot ask for guidance because everybody else is old and stodgy and dumb. They’ll grow out of it, just like their parents did.

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