SAN FRANCISCO (Reuters) - Venture capitalists are proving a less reliable source of cash for President Barack Obama during this election, according to fundraising data, even though he has raised a record amount of cash overall.
Through September 30, Obama collected $552,758 from these deep-pocketed investors who provide startup money to firms, less than half his total through that time in 2008.
Romney has raised $860,827 from venture capitalists, an indication of his support amongst the investment community in the neck-and-neck race, according to data from the Center for Responsive Politics.
Most of the venture capitalists who gave to Obama last election but not this year did not comment for this article, making it hard to know their exact reasoning. Generally speaking, many venture capitalists say they are disappointed with Obama’s support of technology.
And this time, Obama is up against a candidate with years running private-equity firm Bain Capital.
“He completely understands what it’s like to be in business, which makes him very attractive to people like me,” said Marc Andreessen, co-founder of venture-capital firm Andreessen Horowitz, on CNBC earlier this year, to explain his switch in allegiance to Romney.
Andreessen, who backed Obama four years ago, has given $5,000 each to Romney and his vice presidential nominee, Paul Ryan; $100,000 to the pro-Romney group Restore Our Future; and tens of thousands to other Republican candidates and groups. Records show no donations to Obama. A spokeswoman for Andreessen declined to comment.
Bob Nelsen, co-founder of Arch Venture Partners in Seattle, said he switched from supporting Obama financially in 2008 to supporting Romney in 2012 because his primary loyalty is not to any one politician. Instead, it is to the technology economy, which he wishes the administration had supported more.
“The first time around there was a lot of emotion and hope, and now it’s a lot about rationality and deeds,” he said. “Show me the deeds, show me the leadership.” He has given a total of $5000 to Romney.
Though Romney is handily beating Obama in venture capitalist fundraising, the two candidates are running a close race in terms of overall cash gathered.
Obama’s campaign and allied Democratic Party organizations have raised about $988 million over the course of the campaign. The Romney campaign and related Republican party organizations have raised $919.4 million.
Raising Romney’s appeal with venture capitalists may be his support for capping the U.S. capital-gains tax on investment income at 15 percent. Obama wants to raise it for wealthier taxpayers.
Obama also wants to eliminate a tax break many venture capitalists benefit from known as the carried-interest tax break. That break affects taxes on their share of the profits from their investments, known as carried interest. Venture capitalists pay the capital-gains rate on carried interest instead of income taxes, which would typically be higher.
Individually, several prominent venture capitalists who gave to the Obama campaign in the 2008 cycle seem to have taken a pass this time, with their names not appearing on lists of donors made available by the Federal Elections Commission.
Names in that category include Accel Partners’ Jim Breyer, a noted early Facebook backer; Kleiner Perkins Caufield & Byers’ Ted Schlein, who backed Jive Software; and the Foundry Group’s Brad Feld, co-founder of start-up program TechStars. Bryer, Feld and Schlein did not respond to emailed requests for comment.
Last time, Obama’s VC donations totalled $1.2 million while challenger John McCain’s totalled $574,250. Comparisons with that race are not clear cut because McCain accepted public financing. That limits the types of contributions a candidate can take.
The industry’s money moves may not all come down to the issues, said Mark Heesen, head of the National Venture Capital Association. He believes that by their nature, venture capitalists constantly think about disrupting the status quo.
“Your mindset is to look at the challenger as opposed to the incumbent,” he said. “That is ingrained in a venture capitalist.”
Reporting By Sarah McBride. Editing by Karey Wutkowski, Jonathan Weber and Andrew Hay