Billionaire Reid Hoffman’s venture capital–fueled crusade to save democracy had a bit of a bumpy start. In early 2017, Hoffman joined forces with political strategist Dmitri Mehlhorn, among others, investing some $3 million in Democratic candidates and groups in Virginia with the goal of flipping the state’s Republican-held legislature. For Hoffman, an early employee at PayPal and the co-founder of LinkedIn, the off-cycle Virginia race was the perfect laboratory for their fund, Investing in US, to test-drive disruptive new electoral strategies. But where Hoffman and Mehlhorn saw a political sandbox, Democratic Party officials saw a Bay Area interloper. Rumors circulated that Hoffman was using his money to pay politicos who might one day help his business interests, or, perhaps more generously, that Hoffman was being scammed by political grifters who knew nothing about winning local elections. Beneath it all lay a fear that Hoffman, in typical Silicon Valley fashion, was trying to mine Democratic voter data to make money off the resistance.
Racing to reassure jittery Democrats, Mehlhorn scheduled a public debriefing for after the election, open to any and all Democrats interested in seeing what they’d learned. In mid-November 2017, hundreds of people crammed into a conference room in a D.C. office building, with hundreds more packed into an overflow room next door, eager to discuss strategies Investing in US could put to work in the upcoming midterms. The reception, a Democratic insider told me, was overwhelmingly positive, given that, with Hoffman and Mehlhorn’s help, they had picked up 15 seats in the Virginia legislature and come within a hundred or so votes of winning three more. If Republican incumbent David Yancey hadn’t won re-election when his name was literally drawn from a hat, Democrats would have split control of the statehouse.
But Team Hoffman’s results didn’t fully quell a brewing controversy. They’d disrupted Democratic politics with their Silicon Valley–inspired, seed-capital approach to state politics, and as usual with disruption, there were winners and losers. While Investing in US found plenty of common ground with Democratic groups and activists attempting to launch mini-insurgencies, Mehlhorn clashed with data vendors and establishment operatives who hoped that they would donate to candidates and political veterans who needed the resources, and bristled when Mehlhorn suggested that they hand over data.
The infighting continued through the 2018 midterm cycle, in which Hoffman and Co. invested hundreds of millions of dollars (some of which will roll over into 2020). There was, at times, an arrogance problem, as if they’d already reinvented Democratic politics and were waiting for the tired old timeservers to figure it out. A meeting with the state Democratic party chairs in Puerto Rico, scheduled after the November election, got off to a poor start when Investing in US inadvertently insulted the Washington state party chair, a former Microsoft executive, by claiming that their “disruptive technology” had invested more money in social media than the D.N.C. and the state party combined. (Through a spokesman, Hoffman declined to comment for this article.)
There was an air of, “So you guys better get with technology and really listen to the people. We understand that the most,” coming from Hoffman’s reps, recalled Jane Kleeb, the chairwoman of the Nebraska Democratic Party. “Honestly, it was that comment that then pissed all the state party chairs off because, you know, we don’t get to spend $2 million on social-media ads.”
The insular world of state Democratic politics was primed for a backlash. When The New York Times reported that Investing in US had invested in a company that used Russian-inspired disinformation tactics in the Alabama special election, Hoffman’s reputation among Democrats threatened to sour. (Hoffman and Mehlhorn claimed that they were unaware of the project until the Times report, and both have disavowed the use of disinformation.) “It makes it harder for us to win when they’re doing things that call into question what our morals are,” said Ken Martin, a vice chairman for the Democratic National Committee and the state party chair in Minnesota. “How can we take the higher ground and say that Donald Trump is a liar when we’re out there doing the same thing?”
And yet, Hoffman and Mehlhorn’s smart-shotgun approach helped a thousand Democratic flowers bloom. “There’s no doubt that in 2018 they were a big part of our success, particularly early on in helping to fuel a lot of the resistance groups, and helping to build that infrastructure,” said Martin. And they’re already sowing new seeds ahead of 2020, pouring millions of dollars more into the start-ups (so to speak) that worked, and rapidly scaling their operations. The ultimate goal is to get Donald Trump out of office—and if not, to put up enough resistance in the House, Senate, and the states to stop him from enacting his agenda. The only question is, will the Silicon Valley disruptors hijack the Democratic Party in the process?
Investing in US was born from the dire aftermath of the 2016 election, when establishment Democratic organizations were structurally unprepared to harness the massive upsurge in anti-Trump activism. The nearly bankrupt D.N.C. was locked in a fight between Keith Ellison and Tom Perez; the state parties were hollowed out from years of neglect; and Organizing for America, which Barack Obama built to bypass the D.N.C., never quite mustered the energy and excitement to get anyone besides Obama elected. At the same time, some of the biggest names in Silicon Valley venture capital were itching to get involved, including billionaires Ron Conway, an early-stage angel investor in Google and Facebook; Chris Sacca, an early investor in Twitter, Uber, and Instagram; and Mark Pincus, the founder of Zynga. “They were still reeling from defeat, not organized in any meaningful way to capture that energy and excitement that was out there,” Mehlhorn said of the Democrats. Silicon Valley, which prides itself on taking risks and learning from failure, saw an opening.
So did Mehlhorn, who graduated from Yale Law School alongside Cory Booker and Stacey Abrams and holds an advanced degree from Harvard’s Kennedy School of Government. For years, he had run the private-sector gauntlet—McKinsey, big law, an information brokerage firm, Bloomberg—but kept finding himself drawn back toward politics. He later started an angel-investing firm with some friends and on a whim, shorted the market before the 2016 election, betting that if Trump were elected, the market would tank and he could use his gains to fund anti-Trump groups. “Turns out the markets actually liked him, because, I guess, public-equities traders are a bunch of short-term assholes,” Mehlhorn joked. But he was undeterred. After the election, he began reaching out to others in the V.C. world who shared his shell shock—including Hoffman, a former board member of an education nonprofit Mehlhorn had founded.
In early 2017, Mehlhorn sent Hoffman a 10-page memo laying out his fears that the norms of the Enlightenment era—“the rule of law, respect for people as people, basic belief in the scientific method”—faced an existential threat in Trump. The manifesto was eventually translated into a more traditional pitch deck for potential investors, written in their native Valley argot: flow charts explaining the “fascist playbook”; charts detailing the asymmetries of Republican vs. Democratic messaging; analyses of the current socio-political ecosystem, from unengaged centrists to neo-Nazis and racists; and proposals on how to rapidly engage untapped electoral markets.
The answer, Mehlhorn said, was a political investment company that could mimic the tactics of a Silicon Valley seed fund, allocating small amounts of capital to innumerable founders with crazy ideas, then sitting back to see which ones worked. “There was no risk-capital or growth-capital arm of the resistance, and so that is what we’ve tried to build,” Mehlhorn told me. “Now, in terms of what that implies, that implies that we are backing founders, so people who we think have big, potentially game-changing ideas.” Even more important, he said, “we are backing founders who we think can create platforms that make the overall ecosystem of American democracy more resilient and resistant to fascism, by empowering people who the fascists are trying to disempower.”
Investing in US is throwing stuff at the wall in four main categories: boosting turnout by testing new messaging and funding organizations focused on voter engagement; backing recruiting organizations that seek out and train candidates, campaign staffers, and operatives; building cost-efficient tech platforms that allow any candidate to run ads and raise money on a tight budget; and funding narrative-shaping efforts like lawsuits and legal challenges to Trump policies. It’s an enormous, diverse portfolio of companies, nonprofits, and activist groups, including Higher Ground Labs, a tech accelerator that helps companies build campaign software for progressives; Run for Something, which recruits candidates and helps them run for office; and Indivisible, a voter-action group whose founders were recently named to the Time 100 list. There is also Stand Up Republic, which ran ads against Roy Moore in the 2017 Alabama special election; WokeVote, aimed at mobilizing African-American voters; the People’s House Project and the Arena, organizations devoted to finding and training candidates and staffers; and Integrity First for America, which filed lawsuits against the white nationalists involved in Charlottesville. All told, Hoffman and Mehlhorn have fielded hundreds of pitches and several hundred meetings with candidates, and directly invested in 100 different groups and efforts. (Indirectly, they’ve invested in hundreds more through companies like the Higher Ground accelerator, and recruited thousands of candidates through organizations like Run for Something.)
But after years of increasingly brazen data-privacy scandals, data-loving tech billionaires inevitably inspire suspicion. (It doesn’t help that Hoffman once worked with Trump pal Peter Thiel at PayPal, and mentored Mark Zuckerberg.) And while Democrats generally trust that Hoffman and Mehlhorn are acting out of a sense of civic duty, they cannot help but fear that self-interest plays into their motives, and that self-interest will ultimately hurt Democratic politics if Investing in US isn’t considering the long game for the party, post-Trump.
“I think that the concern was whether or not they were a few individuals who were attempting to manipulate us, to take away the proprietary data that helps us, just for the benefit of” the 2020 election, said Trav Robertson, the chairman of the South Carolina Democratic Party, who has worked with Hoffman and Mehlhorn on data projects. “And the reason I say that is because you can win that battle, but still lose a war.”
Democratic party sources acknowledge that in a world where Republicans are funded by billionaires willing to toss money at any wild project that comes their way, Mehlhorn and Hoffman’s V.C.-driven approach is a valuable counterweight. “One of the things that they’re doing that I think is just categorically smart is a willingness to invest serious money in projects that they believe in, and that have a better understanding of how much money a lot of these things take than traditional Democratic donors,” one Democratic insider said. Shomik Dutta, co-founder of Higher Ground Labs, offered a blunter assessment: “I think [they have an] appetite for risk, and appreciation for deeper infrastructure-level investments. I think the older donor class was very candidate-driven, and was attracted to shiny objects.” Indeed, in the 2018 election, Investing in US did not donate to any individual candidate or PAC, choosing instead to spread their bets across a spectrum of companies and organizations that could support individual candidates. As a result, they hoped, the candidates could focus less on fundraising, and more on campaigning.
Venture capitalists, by nature, are trained to zig where others zag—who else would invest millions of dollars in, say, an app where people rent out their couches to strangers? But while their Democratic-establishment counterparts welcome their funding blitz, there’s a worry that efforts like Investing in US may have a massive blind spot to more long-lasting political risk, a factor that can’t be measured by cash flow and market share. “When we have people who are well-intentioned but are operating sort of on their own, in this very subversive way, it has an impact on everyone else’s work,” said Martin, describing the Alabama incident as a moment that gave Democrats pause.
In December of 2018, a year after Doug Jones won the Alabama special election in a surprising upset, The New York Times reported that Hoffman and Mehlhorn had invested $750,000 in American Engagement Technologies, a digital firm run by Mikey Dickerson, a former Google engineer who worked in the Obama administration and knew someone who eventually connected him to Investing in US. He pitched them the idea of setting up trip-wire programs focused on rooting out fake news promulgated by bots. For Hoffman and Mehlhorn, fighting fake news was admirable, and Dickerson had a good reputation among their political and Silicon Valley contacts. They signed a check, left Dickerson alone, and until the Times report, allegedly had no idea that Dickerson had paid $100,000 to a subcontractor who then created Facebook pages posing as conservative Alabamans to spread fake news and encourage Republicans to support a rival candidate through a write-in campaign. (Dickerson has claimed he had no knowledge of the “false flag” and write-in tactics.)
Several other projects created similar problems. In one effort to combat misogyny by studying how young men are radicalized online, the company Investing in US funded ended up creating their own misogynistic content, ignoring Hoffman’s request to not spread hate speech. (The Keg Bros, for instance, churned out posts that blatantly sexualized Tulsi Gabbard, while another project went after Rebekah Mercer for being a divorcee.) After Hoffman and Mehlhorn started funding Crowdpac—a crowd-funding site for small political candidates that they hoped would support centrist politics—they belatedly learned that its founder, Steve Hilton, was building a career as a pro-Trump pundit, only realizing the full extent of his Trumpism after an online uproar. Over time, their idealistic hope that principled Republicans would join them in standing up to Trump diminished, as people they knew, like Senator Ben Sasse, began toeing the Trump line. (Investing in US is still willing to donate to Republican and right-leaning groups, but the bar is now much higher.)
To the venture capitalists, these road bumps were learning opportunities. “We didn’t really follow those as closely as we should and could have, and even more importantly, we were apparently not as clear as we thought we were about what we were O.K. with and not,” Mehlhorn admitted. “We thought we’d been pretty clear about our investing rules, which were no racism, no scaled misinformation. Like, the point is to actually empower the Enlightenment era.” Apparently, they’d appraised these investments as they would in the private sector: the more money they planned to invest, the more vetting they would do. In the case of Alabama, they didn’t think the well-known Dickerson needed to be vivisected. When I asked Mehlhorn how he would avoid future mistakes, he immediately laid out a complete, revised diligence strategy for 2020, which includes moving away from early-stage investments with higher risks. They are also moving toward attaching a rider to all of their grants, encoding their standards of behavior in a legal document—no scaled misinformation, no hate speech, and no tropes that marginalize groups based on gender or ethnicity.
“The lesson for me was that I need to take extra steps to make sure that groups we fund align with our values not just in outcomes, but also in the methods they use to achieve those outcomes,” said Mehlhorn. “We have shared everything we learned, failure as well as success. If we get egg on our face because we invest in something that didn’t work, we will share that.” At the same time, he says, the goal is to help the Democratic ecosystem—not to be popular. “We want to help you succeed so that you can do well. But we don’t actually care if you like us. We don’t care if you know about us. We just care.”
Democratic insiders believe Mehlhorn and Hoffman are sincere in their desire to help, and to not repeat their mistakes. But a number voiced concerns that the relative neophytes are not thinking in a political dimension, nor are they inclined to do so. Did they realize, for instance, that the Alabama debacle couldn’t just be written off as a learning opportunity? “This could do real damage to Doug Jones in 2020 and to the Democratic party,” one Democratic source worried. “It has potential to be more consequential.”
A deeper concern is that Investing in US might exacerbate the damage that Barack Obama allegedly did to the national party. A common accusation among party officials is that Obama, deeply suspicious of the D.N.C. after his experience in the 2008 election, willfully neglected the organization and its state parties in favor of his own Organizing for America—causing the Democratic Party to hemorrhage Senate seats, House seats, state legislatures, and governors’ mansions over his eight years in office. “When I hear people say, ‘Well, why should you invest in the state party? You guys haven’t been winning elections,’ how do you expect state parties to win elections when they don’t have resources?” said Jane Kleeb, the Nebraska Democratic Party chair. “Under President Obama, one of the best presidents we had, he was giving state parties $2,500 a month. That’s it. That’s all they had to leave their doors open.”
Rumors that Hoffman might end up working with the D.N.C. to consolidate the party’s massive data trove—an endeavor that would allow them to compete with the Republican National Committee’s renowned data operation—still have not put their minds at ease, even months after the plan was first proposed, thanks to the lingering suspicion that they might bungle things there, much like they did in Alabama. Hoffman and Mehlhorn, after all, are not just building a power base that could supplement traditional Democratic organizations—they are, potentially, laying the groundwork to usurp the D.N.C. entirely. Without their ability to play gatekeeper, insiders fear the Democratic Party could be overrun by insurgent candidates and left-wing outsiders (like Alexandria Ocasio-Cortez, who successfully primaried the party’s fourth-ranking congressman). Similar concerns have already prompted the D.C.C.C. to declare they will not work with firms supporting candidates running primary challenges against incumbent Democrats, a sign that they’re getting serious about tamping down activism in the ranks, even if it’s from ostensible allies.
Of course, the Democratic insider speculated, the establishment griping might also reflect a strain of envy. “People were generally not resistant to the things [Investing in US] were doing. They just wished they would spend their money doing what they wanted to do,” he noted wryly, mimicking their thought process: “They couldn’t possibly know anything about our world, and therefore, if they want to get rid of Trump, they’d write us a $10 million check and we’ll take care of that.”
But for now, said Trav Robertson, there are bigger things at stake than an inter-party fight between progressives and liberals. “This is going to be the conversation that we have as Democrats . . . If we are, in fact, in a war, politically, culturally for the heart and soul of America, that every e-mail we get says this is the most important election of our lifetime—if that is in fact the case, then as a Democratic Party, are we going to use any means necessary by which to win?” If that means the party must begrudgingly tolerate Investing in US’s crushing, well-meaning bear hug, so be it.
