David Blumberg is not your typical Silicon Valley venture capitalist

David Blumberg is not your
typical venture capitalist.
Blumberg
Capital

• Venture capitalist David Blumberg is a white male in
  Silicon Valley, and still, he says he’s a minority.
• In addition to being a Donald Trump supporter, the
  investor is gay, married with two kids, and has a strong faith
  in God.
• After coming out as Republican in 2016, Blumberg said
  he “got dropped from a lot of cocktail party lists.”
• But being an outsider has its advantages, he
  says.

Just before the last presidential election, David Blumberg hosted
a group of investors and entrepreneurs at a San Francisco
restaurant for a business mixer. The conversation turned to
Donald Trump.

The dinner guests tried to make sense of the reality TV star
making it to the 2016 general election. “Can you believe anyone
would ever vote for Donald Trump?” Blumberg said he remembered
hearing.

“And I’m just sitting there, not saying anything,” Blumberg said.

Blumberg would go on to vote for Trump, though he wouldn’t dare
admit it before his peers, because he feared their bitter
criticism.

“People often don’t realize how intolerant they are,” Blumberg,
managing partner of Blumberg Capital, told
Business Insider.

“They just assume their view is right. I have strong views, I
know that. I could even be considered opinionated, but I
certainly respect other people’s views,” Blumberg said. “Being a
minority, you learn that.”

He’s a white male in Silicon Valley, and still, Blumberg is a
minority.

In addition to being a Trump supporter, the venture capitalist is
gay, married with two children, and Jewish, with a strong faith
in God.

Blumberg said his right-wing politics have caused his social
circle to shrink since coming out as a Republican, especially in
the Bay Area’s liberal bastion, where even tech investor
Peter Thiel fled from after his political leanings came under
fire from many in Silicon Valley.

Read more: The
tech elite are abandoning Silicon Valley in droves because of
‘groupthink’ and out-of-control living costs— here’s where
they’re headed

“I don’t think I’ve lost deals” because of his politics, Blumberg
said. “I know that I’ve lost friends.”

A track record of success

Being an outsider has its pros and cons in the tech industry.

There’s more money that ever pouring into Silicon Valley
startups, with venture firms from Palo Alto to Tokyo raising

“mega-funds” that could make it difficult for small-time
investors to compete for access to the buzziest startups. VCs
are figuring out how to differentiate when founders have so many
opportunities to raise capital.

Blumberg, whose firm invests in early-stage companies focused on
enterprise, fintech, and commerce, believes his unique
perspective allows him to spot deals that traditional VCs might
miss or pass on.

“I often see things in a dynamic sense, as opposed to static. I
like to say, ‘It’s a video, not a photo.’ Technology doesn’t stay
the same and neither do socio-demographics,” Blumberg said.
“Today’s investments should be thinking about where things will
be five to ten years out.”

After working as an analyst in Montreal, Blumberg came to San
Francisco in 1991 to start Blumberg Capital. He took money from
high net-worth individuals and family offices and cut nine deals
in total, in exchange for a cut of the equity and bonuses.

Those investments saw four companies — “all unicorns for their
day,” Blumberg said — go public. He used some of his earnings and
leveraged his connections from those deals to seed his first
institutional fund at Blumberg Capital. Today, the firm has $514
million under management with over 200 investments to date.

Blumberg Capital was the first investor in Nutanix, an enterprise
cloud platform that made legacy infrastructure obsolete when it
combined compute, virtualization, and storage into one integrated
solution. Nutanix went public in 2016 and has given Blumberg
Capital $223 million in returns over the years, according to the
firm.

It also led the Series A for DoubleVerify, whose tools let
advertisers and publishers verify that their ads are seen and
clicked on by real people, instead of bots. It solved a real pain
point for brands, and the market rewarded them for it. Private
equity firm Providence Equity Partners LLC
acquired a majority stake in DoubleVerify in 2017.

Blumberg added that his experiences traveling to Israel as a high
school student and studying international relations in college
gave him the confidence to place bets outside of Silicon Valley,
where
most venture dollars flow into. Since launching Blumberg
Capital, he’s raised four funds that have backed emerging
companies in the US, Europe, and Israel. One in three investments
are outside the US.

‘When we came out as Republicans, we got dropped from a lot of
cocktail party lists’

Despite his track record of success, Blumberg finds himself
ostracized from the Silicon Valley elite because of his politics.

San Francisco, where Blumberg and his family live, has a
well-earned reputation as a strongly Democratic city. Less than
3% of the city’s voting age population cast ballots for Trump in
the 2016 election, according to
Curbed SF.

“When we came out as Republicans, we got dropped from a lot of
cocktail party lists,” Blumberg said. “There’s a number of
friends who we just don’t see anymore because — we would be happy
to see them — but they can’t deal with it. We break the
stereotype.”

Peter Thiel was the only major Silicon Valley mogul to
publicly back Donald Trump’s presidential
campaign.
Getty/Drew
Angerer

A proud Democrat through college, Blumberg now falls on the
spectrum between conservative and libertarian. He seems to enjoy
a lengthy rant about the media and the environmental movement. He
also recommends the writings of Jordan Peterson, a Canadian
psychology professor and right-wing celebrity who’s been called
“dangerous”
for spreading conspiracy theories and “pseudo-facts.”

“Peter Thiel is a friend of mine,” Blumberg remarked.

In 2017, Blumberg donated $25,000 to America First Action, a

super PAC dedicated to electing federal candidates who
support the agenda of the Trump administration. Though Blumberg
said he voted for the current president, he made his biggest
campaign contributions to Senator Marco Rubio and former Governor
of Florida Jeb Bush, according to a federal
campaign finance database.

When asked to comment on these contributions, Blumberg said in an
email, “I try to support candidates who I believe will address
the free markets and free-people agenda that is important to me.”

But beyond giving this interview, he doesn’t often share his
politics with the public. His staff has advised him to keep his views off
Twitter, Blumberg said. It could discourage promising
founders and co-investors from affiliating themselves with
Blumberg Capital.

The feeling is familiar for Blumberg, who said he came out as gay
at 30 years old and continued to keep his personal life private
for many years. He wouldn’t go to parties or stay out late at
bars with coworkers, he said, because he had trouble engaging in
“locker talk.”

“The bro culture didn’t negatively impact me, except, I think in
self-censorship. I think I — and many people like me in those
days — wouldn’t fully share their life,” Blumberg said. He later
added, “I think that limits the relationships you can have with
people.”

Silicon Valley is on the brink of an
exodus.
Shutterstock

There’s a disturbing trend in Silicon Valley

Blumberg is speaking out about his identity now, because he
worries about the future of a homogeneous tech industry.

“There is a sameness about the Valley that I find troubling,”
Blumberg said.

Members of the tech elite, namely Thiel, are starting to leave
the Bay Area to escape the self-described groupthink and
arrogance of Silicon Valley. Thiel became a social outcast after
the libertarian billionaire-investor very publicly supported
Trump’s presidential campaign. In February, he announced he would
leave the Bay Area and set up his venture firm and foundation
offices in Los Angeles.

Thiel, who is also gay, told
The New York Times that the groupthink happening in Silicon
Valley could have serious consequences.

“Network effects are very positive things, but there’s a tipping
point where they fall over into the madness of crowds,” he said.

Blumberg agrees. He warns that the groupthink in Silicon Valley
can result in too much venture flowing into the same tech
sectors. It creates “too much competition,” he said, and
“investors end up paying more for deals because they’re the deals
everybody wants.”

“FOMO
is alive and well and many people want to invest in the same
things as others and not be left behind,” Blumberg said.

He has no intention of being one of those people.

See also: