Why Silicon Valley has been silent on the shutdown


Blissfully ignorant.

Over the past couple years, Silicon Valley has sought to reverse its longstanding aversion to politics. Lobby shops for companies like Google and Facebook have ballooned, campaign contributions have started to flow, new organizations have formed, and high-profile advocacy campaigns have made headlines across the country.

On the fight over the government shutdown and debt ceiling, though, they've been almost entirely absent. While it's possible pressure is being applied behind closed doors, industry trade groups like the Consumer Electronics Association have remained publicly silent, and no tech groups signed on to the Chamber of Commerce's letter urging Congress to get its act together and fund the government. The Campaign to Fix the Debt's CEO list has a smattering of tech figures -- like Salesforce.com's Marc Benioff and LinkedIn's Reid Hoffman -- but they haven't been especially vocal. As The Post's Vivek Wadwha noted, the Valley writ large seems to have shrugged off the crisis entirely.

That "what, me worry?" attitude partly has to do with the predominant way companies are funded in the tech world: Not by banks, whose lending behaviors tend to be affected by macroeconomic conditions, but by venture capitalists and angel investors who have much more freedom with their cash.

"All of our companies are equity financed, so we don't borrow money," says Alan Patricof, founder and managing director of Greycroft Partners. "And they're financed by funds like ours, which are 10-year funds so they don't go up or down, they don't vacillate. If we have money, we had it before, we'll have it next year. So I don't think [the shutdown] had an impact.

Also, he says, start-ups are moving so fast that even paralysis in Washington won't get in their way.

"Frankly the start-up wave that's going on in this country is inexorable, nothing seems to be able to stop it," Patricof says. "And most of our companies are at such an early high growth stage, they're growing 30, 40, 50 percent a year, so they're relatively isolated." And that's added up to a cavalier attitude toward the D.C. impasse.

"If you asked probably 10 of our companies what they think about the debt crisis, what do they think about the government shutting down, they wouldn't have any idea, or it wouldn't affect them," Patricof says. "So it's a kind of bifurcated world. Longer term, it's going to have an effect on everybody. But young, dynamic companies that are going through a growth phase just aren't going to feel it. And most of them have nothing to do with government...Venture capital is about the here and now. We have fast-growing companies that have problems all the time and opportunities and it's a very dynamic world that we're in."

Besides, as long as their main priorities, like patent trolls, are getting taken care of -- and companies can still go public -- techies figure everything else will sort itself out.

"I think right now there's a lot of wait and see from the tech community on the shutdown," says Engine Advocacy strategist Mike McGeary, who translated the shutdown for his start-up types. "On one level, business is continuing on a whole lot of the issues that we've been working on, so that coupled with the relatively negligible impacts felt thus far, may have led to a copacetic sense of letting Washington work out its own problem here."

Of course, they may be right to avoid expending energy on a cosmic mess that the rest of American business -- much of which is more deeply affected -- hasn't managed to solve either. And sure, a bunch of techies from California and New York aren't going to win over the Steve Kings and Ted Cruzes of the world.

But they've also shown their ability to wage campaigns in highly public and unconventional ways: See the now-legendary about-face on new copyright laws, or the immigration push that made the Senate's bill much more friendly to recruiting talent from overseas. Moreover, those campaigns came with a promise that the new generation of tech companies are interested in more than just their pet priorities, as the New Yorker's George Packer illuminated in a long piece this spring.

"How do we move America into the knowledge economy?" asked the Facebook-affiliated FWD.us' director Joe Green. "And how do we create a voice for the knowledge community that is about the future and not selfish? If we organize this community, it could be one of the most powerful voices in politics."

This is one of those times when such a voice could have an impact.

UPDATE: A reader writes in to note that one startup, Thumbtack.com, is in fact concerned about the debt ceiling! But that's because it depends on small businesses that are actually, concretely affected by things like a slowdown in small business loans and the closure of national parks. Perhaps an exception that proves the rule.

Lydia DePillis is a reporter focusing on labor, business, and housing. She previously worked at The New Republic and the Washington City Paper. She's from Seattle.
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