Venture capital success is measured by high returns, and few groups have mastered that winning equation better than the National Venture Capital Association. The Arlington, Va.-based trade group’s political action committee (VenturePAC) had supported 177 federal candidates since the beginning of 2001, and last Tuesday it scored big with 163 electoral victories.
“We assumed early on that the Republicans were going to keep control of the House, so we worked on that premise,” says Mark Heesen, president of the NVCA. “You need to have a voice in Washington, and right now, that means money as well as ideas.”
VenturePAC, which is funded through voluntary donations from venture capitalists (click here for list), gave a total of $834,900 in hard money to federal candidates and officeholders between January 2001 and September of this year, according to documents obtained from the Federal Election Commission’s Web site. It is the most money ever donated by the group during an election cycle, and Heesen says the increase was motivated by the NVCA’s interest in being heard on such legislative issues as stock options, capital gains, capital formation, FDA reform and science and technology research.
Both Sides of the Aisle?
Not surprisingly, VenturePAC gave far more money to Republicans than to Democrats. For example, the average Republican senatorial candidate supported by VenturePAC received $6,632, while the average Democratic senatorial candidate secured just $4,133. It is important to note that these totals include 11 sitting senators who were not up for reelection in 2002, such as Barbara Boxer (D-CA), Phil Gramm (R-TX) and Arlen Specter (R-PA).
The same partisan discrepancy could be seen among Congressional candidates. Prospective GOP candidates for the House of Representatives snared an average of $4,084 from VenturePAC, while their Democratic counterparts received $3,540. These numbers, plus those that follow, include four individuals who weren’t on the ballot last Tuesday because they had either retired, lost party primaries or chose to seek state office.
In all, VenturePAC gave $438,500 to Republican candidates for the House of Representatives, $173,500 to Democratic candidates for the House, $185,700 to GOP Senate hopefuls and another $37,200 to Democratic senate candidates. It supported the winning candidate in 142 of 150 relevant congressional races, while scoring in 21 of 27 senate races.
That latter number could rise pending the outcome of a December runoff election in Louisiana for U.S. Senate. VenturePAC has given five contributions totaling $9,000 to incumbent Mary Landrieu (D-LA), who failed to break the needed 50% threshold last Tuesday, although she was the leading vote getter. On the other side of the ledger, VenturePAC supported Doug Forrester’s failed bid for senate in New Jersey, but the contribution is not included in this article’s math because it was made after the most recent Federal Election Commission filing deadline.
“[Forrester] is one of those candidates we gave to even though we thought he might lose,” Heesen explains. “We did the same thing with Greg Ganske in Iowa, because people like Frank Lautenberg (D-NJ) and Tom Harkin (D-IA) have never been friends of the high-tech venture capital industry.”
Heesen added that he was most disappointed by the loss of Rep. Connie Morella (R-MD), chairwoman of the House Science Committee who had received $9,000 from VenturePAC. He also lamented the loss of incumbent Senators Max Cleland (D-GA) and Tim Hutchinson (R-AR).
VenturePAC does not operate a state-level PAC, so as to not create conflicts of interest in states that invest in private venture capital funds. The group is willing, however, to support local office holders running for federal office. For example, VenturePAC gave $9,000 to John Cornyn’s (R-TX) winning senatorial campaign, even though, as state attorney general, he was the final arbiter of the controversial decision by the University of Texas Investment Management Co. (UTIMCO) to release sensitive private equity fund performance data. VenturePAC also gave $3,000 to Robert Ehrlich (R-MD), who ultimately gave up a congressional reelection bid to successfully pursue the Maryland governor’s office.
During the 2001 elections, VenturePAC supported 126 candidates, 109 of whom won. It did not back a presidential candidate. In general, the group is legally restricted from contributing more than $5,000 to an individual candidate per election, so VenturePAC supplemented its giving by backing other political action committees which, in turn, support individual candidates. This time around, it gave a total of $213,500 to such groups as the Democratic Senatorial Campaign Committee ($15,000), the National Republican Congressional Committee Contributions ($30,000) and the Sandhills Political Action Committee ($3000).
Contact Dan Primack