Tech is having a reckoning. Tech investors? Not so much.

They have also been indirect beneficiaries of the insurrection at the Capitol, with spikes in users as a result of the mainstream services’ deplatforming President Trump, his surrogates, and accounts promoting the QAnon conspiracy.

In a few cases, public pressure has forced action. DLive, a cryptocurrency-based video streaming site, which was acquired by BitTorrent’s Tron Foundation in October 2020, suspended or permanently banned accounts, channels, and individual broadcasts after the Southern Poverty Law Center identified those that livestreamed the attack from inside the Capitol building.

Neither Tron Foundation, which owns DLive, nor Medici Ventures, the Overstock subsidiary that invested in Minds, responded to requests for comment. 

EvoNexus, a Southern California-based tech incubator that helped fund the self-described “non-biased” social network CloutHub, forwarded our request for comment to CloutHub’s PR team, who denied that its platform was used in the planning of the insurrection. They said that a group started on the platform and promoted by founder Jeff Brain was merely for organizing ride sharing to the Trump rally on January 6. The group, it said, “was for peaceful activities only and asked that members report anyone talking about violence.”  

But there’s a fine line between speech and action, says Margaret O’Mara, a historian at the University of Washington who studies the intersection between technology and politics. When, as a platform “you decide you’re not going to take sides, and you’re going to be an unfettered platform for free speech,” and then people “saying horrible things” is “resulting in action,” then platforms need to reckon with the fact that “we are a catalyst of this, we are becoming an organizing platform for this.” 

“Maybe you wouldn’t get dealflow”

For the most part, says O’Donnell, investors are worried that expressing an opinion about those companies might limit their ability to make deals, and therefore make money.

Even venture capital firms “have to depend on pools of money elsewhere in the ecosystem,” he says. “The worry was that maybe you wouldn’t get dealflow,” or that you’d be labeled as “difficult to work with or, you know, picking off somebody who might do the next round of your company.” 

Despite this, however, O’Donnell says he does not believe that investors should completely avoid “alt tech.” Tech investors like disruption, he explains, and they see in alt tech the potential to “break up the monoliths.” 

“Could that same technology be used for coordinating among people in doing bad stuff? Yeah, it’s possible, just in the same way that people use phones to commit crimes,” he says, adding that this issue can be resolved by having the right rules and procedures in place. 

“There’s some alternative tech whose DNA is about decentralization, and there’s some alt-tech whose DNA is about a political perspective,” he says. He does not consider Gab, for example, to be a decentralized platform, but rather “a central hosting hub for people who otherwise violate the terms of service of other platforms.”

“The internet is decentralized, right? But we have means for creating databases of bad actors, when it comes to spam, when it comes to denial of service attacks,” he says, suggesting the same could be true of bad actors on alt tech platforms. 

But overlooking the more dangerous sides of these communications platforms, and how their design often facilitates dangerous behavior is a mistake, says O’Mara. “It’s a kind of escapism that runs through the response that powerful people in tech … have, which is just, if we have alternative technologies, if we just have a decentralized internet, if we just have Bitcoin” … then everything will be better.

She calls this position “idealistic” but “very unrealistic,” and a reflection of “a deeply rooted piece of Silicon Valley culture. It goes all the way back to, ‘We don’t like the world as it is, so we’re gonna build this alternative platform on which to revise social relationships.’” 

The problem, O’Mara adds, is that these solutions are “very technology driven” and “chiefly promulgated by pretty privileged people that … have a hard time … [imagining] a lot of the social politics. So there’s not a real reckoning with structural inequality or other systems that need to be changed.”

How to have “a transformational effect”

Some believe that tech investors could shift what kind of companies get built, if they chose to. 

“If venture capitalists committed to not investing in predatory business models that incite violence, that would have a transformational effect,” says McNamee.

At an individual level, they could ask better questions even before investing, says O’Donnell, including avoiding companies without content policies, or requesting that companies create them before a VC signs on.

Once invested, O’Donnell adds that investors can also sell their shares, including at a loss, if they truly wanted to take a stand. But he recognizes the tall order that this would represent—after all, it’s highly likely that a high-growth startup will simply find a different source of money to step in to the space that a principled investor just vacated. “It’s going to be pissing in the wind,” he says, “Because that guy over there is going to be in.”

In other words, a real reckoning among VCs would require a reorientation of how Silicon Valley thinks, and right now it is still focused on “one, and only one, metric that matters, and that’s financial return,” says Freada Kapor Klein.

If funders changed their investment strategies—to put in moral clauses against companies that profit from extremism, for example, as O’Donnell suggested—the impact that this would have on what startup founders chase would be enormous, says O’Mara. “People follow the money,” she says, but “it’s not just money, it’s mentorship, it’s how you build a company, it’s this whole set of principles about what success looks like.” 

“It would have been great if VCs who pride themselves on risk-taking and innovation and disruption … led the way,” concludes Kapor Klein. “But this tsunami is coming. And they will have to change.”

Correction: Brooklyn Bridge Ventures is an investor in Clubhouse, a product management software company, not Clubhouse, the social network as originally stated.