Tech legend Marc Andreessen's latest venture: Rallying Silicon Valley around Trump's stances on crypto, AI and taxes (2024)

By Victor Reklaitis

Entrepreneur and investor is also backing the cryptocurrency industry's new super PAC in a big way

Marc Andreessen hit a home run three decades ago by co-founding a web-browsing pioneer called Netscape Communications. He has gone on to rack up more big hits in the tech sector as an investor and co-founder of Andreessen Horowitz, the venture-capital firm he launched 15 years ago with fellow entrepreneur Ben Horowitz.

Companies he has backed have turned into household names - think Airbnb (ABNB), OpenAI and Slack. He also serves on the boards of cryptocurrency company Coinbase (COIN) and Facebook parent Meta Platforms (META), and he previously was a board member at eBay (EBAY), Hewlett-Packard (HPQ) and HP spinoff Hewlett Packard Enterprise (HPE).

This year, Andreessen has set out in a new political direction: backing Republican presidential nominee Donald Trump. He has promised to spend money in support of the former president's White House bid, although disclosures showing the level of his financial support for Trump have not yet been filed. In addition, Andreessen is a major backer of the Fairshake super PAC, with his venture-capital firm donating at least $44 million to the political-action committee, which is working to defeat critics of the crypto industry and to boost the industry's advocates in key congressional races. And he's been one of the most prominent voices in a battle playing out in Silicon Valley over which presidential candidate deserves the support of the tech industry's powerful and wealthy CEOs and VCs.

All that lands him on this year's MarketWatch 50 list of the most influential people in markets. Andreessen was recently ranked the 11th biggest donor in this year's elections by watchdog group OpenSecrets, which tracks money in politics. He epitomizes how Trump and his fellow Republicans have won over some Silicon Valley VCs and a sizeable chunk of the crypto industry as the party faces off against Democrats in November's highly competitive elections, which will determine control of the White House, the U.S. House of Representatives and the Senate.

Democratic presidential nominee Kamala Harris and Trump are vying to ensure that Silicon Valley's moguls don't become a "monolith" backing just one campaign, according to Robin Kolodny, a Temple University professor of political science with an expertise in money in politics. Kolodny said Harris has focused in part on touting her proposed aid for startups, while Trump is appealing to tech leaders like Andreessen who think that under a Republican administration, regulatory agencies would be likely to leave their companies alone.

"They're not looking for a government program to help them," Kolodny said of Andreessen and others in Silicon Valley who share his worldview. "They just want the government to let them do what they want to do."

Growing interest in politics

Andreessen, 53, signaled his growing interest in policy matters with a "Techno-Optimist Manifesto" that he published last fall. His VC firm said in December that it would get involved in politics for the first time in its 15-year history by supporting candidates who align with its vision on tech issues while opposing those who "aim to kill America's advanced technological future." Andreessen and Horowitz told their employees in July about their plans to spend in support of Trump's campaign, and the co-founders laid out their stance for all the world to see and hear in a 90-minute video podcast released July 16. Horowitz reversed his position in early October, saying he would spend in support of the Harris campaign, but he added that Andreessen Horowitz as a firm "will not be updating its position," and Andreessen didn't announce a shift.

The Biden-Harris administration's approach toward the crypto industry is a big reason Andreessen has backed Trump. Under the current administration, the Securities and Exchange Commission, which is widely disliked by the crypto industry, has sued multiple companies backed by Andreessen Horowitz, which has described itself as the world's biggest crypto investor.

"This has been a brutal assault on a nascent industry that I've just never experienced before. I'm in total shock that it's happened. It's been intensely frustrating that it's been impossible to make progress on this with the White House. It's a totally intolerable situation," Andreessen said in the July podcast.

The Biden-Harris administration has defended its approach to the crypto industry, with SEC Chair Gary Gensler saying his agency is aiming to protect Americans and make sure they get necessary disclosures. Harris, who has ties to California's tech industry after spending decades in Golden State politics, has been somewhat vague about her approach to the industry. She pledged in September to encourage digital assets "while protecting investors and consumers." And some progressive groups aren't buying the view that the crypto industry should be embraced by politicians. Dennis Kelleher, the chief executive officer of watchdog group Better Markets, wrote in a recent op-ed that the sector has seen "kingpins being handcuffed and sent to prison, numerous spectacular bankruptcies, rampant fraud and manipulation, breathtaking volatility and a long list of lost court cases."

Andreessen - who declined MarketWatch's interview request through a spokeswoman for his firm - said in the podcast that another big concern for him is that the administration's approach to digital assets may foreshadow what will happen with artificial intelligence, a primary focus of his VC firm.

"If there's a reign of terror from the government for AI the way that there has been for blockchain, the country is in profound trouble," he said. At the same time, Andreessen praised the Republican platform for promising to "end Democrats' unlawful and unAmerican Crypto crackdown" and support the development of AI.

One other matter also clearly rankles Andreessen: the Biden-Harris administration's proposal to tax unrealized capital gains as income for people with more than $100 million in assets. An unrealized capital gain, often called a paper profit, refers to an increase in the value of an asset that a person hasn't sold yet, whether it's a share in a business or a piece of property. Andreessen said: "This was sort of the final straw for me. This is the thing that hit me hard, on top of everything else."

He joined other critics who have argued that taxing unrealized capital gains would kill entrepreneurship because it would discourage investment. "Venture capital just ends. It's just over. Firms like ours just, like, don't exist," he said. Andreessen, whose net worth is estimated at around $1.8 billion, added that he thinks the level of wealth that triggers the new tax would fall over time to $50 million, then $20 million, and eventually $5 million or $1 million.

Trump has also blasted Harris's support for a tax on unrealized capital gains for the very rich, describing it as "the craziest idea."

The tax proposal also has its supporters, including the Institute on Taxation and Economic Policy, a left-leaning think tank. "By not taxing unrealized capital gains, our tax code is more lenient on extremely wealthy people, who are more likely to have this type of income than most of us who pay taxes on income from work, as we earn it," ITEP said in a blog post last year.

There are also 'VCs for Kamala'

One of the big-picture points Andreessen made in his podcast was that the past 70 years have been relatively peaceful in large part due to U.S. technological and military dominance, which he said "hangs in the balance" in this election year. He also said that as part of Generation X, which largely came of age in the 1990s, he remembers Democrats from that era as being more in favor of "America winning in tech markets." He said he thinks the Clinton or Obama administrations would have taken friendlier stances toward crypto.

Andreessen also mentioned that he supported Democratic presidential candidates in the past, including Bill Clinton in 1996, Al Gore in 2000, Barack Obama in 2008 and Hillary Clinton in 2016.

But Silicon Valley isn't and hasn't been uniformly Democratic: In 2012, Andreessen backed GOP nominee Mitt Romney. Tech moguls Peter Thiel and Larry Ellison were prominent Trump supporters in the former president's past campaigns.

"If regulation is what you're all about, it's pretty easy to see why you're a Trump person," Temple University's Kolodny said. "But there are other kinds of things on the agenda that might also be a problem for any business that's expanding. For example, not having friendly policies toward women in the workplace makes it harder to recruit."

Even as Andreessen expresses his vocal support for Trump, disclosures show has he has also been spending this year in support of Democratic candidates, including donating $250,000 to the Senate Majority PAC, which backs Democrats in U.S. Senate races. So far he's contributed about $1.2 million to Democratic groups, according to OpenSecrets data.

That hasn't staved off a backlash. Since Andreessen's endorsement of Trump, and after President Joe Biden ended his re-election bid and Harris took over at the top of the Democratic ticket in July, VCs backing Harris have proffered criticism and gotten organized.

The founder of a group called VCs for Kamala, Leslie Feinzaig, said she wanted to push back against those in her industry who came out for Trump in July. Billionaire entrepreneur and Tesla (TSLA) CEO Elon Musk endorsed the former president after Trump survived an assassination attempt in Pennsylvania on July 13, and venture capitalist David Sacks offered support in a speech at the GOP convention in July after Ohio Sen. J.D. Vance, a former venture capitalist, was named as Trump's running mate.

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10-15-24 0856ET

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Tech legend Marc Andreessen's latest venture: Rallying Silicon Valley around Trump's stances on crypto, AI and taxes (2024)
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