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Prominent private-equity and venture capital investors have collectively amassed enormous fortunes. And with a U.S. presidential election looming, they鈥檙e putting at least some of that money to work along party lines. Where is it going?

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Before we delve further into 2020, let us first note how political donations from private-company investors have skewed in previous election cycles. Broadly speaking, venture capital investors tend to support Democratic candidates, while private-equity pros have been more Republican-leaning.

Among VCs, there鈥檚 a long history of supporting Democratic candidates. We鈥檝e put together some examples in the chart below.

Among private-equity investors, meanwhile, there are a lot of Republican politicians and megadonors. We list a few below:

Obviously, there are exceptions to our generalization about political leanings of VC and PE pros. On the VC side, renowned startup investor is a prominent Donald Trump supporter, and onetime VC served as Republican governor of Michigan from 2011 to 2019. On the PE side, , former Democratic governor of Massachusetts, currently works as managing director at private-equity firm . And there are more, lower profile examples.

Why the split?

We couldn鈥檛 find any body of research on why VCs might lean left, but here are a couple聽 of hypotheses. First, most venture investors are clustered in Northern California and other liberal-leaning coastal enclaves.

Second, startup investors鈥� core mission is to make risky bets on disruptive industry- and world-changing business models. That鈥檚 essentially the opposite of the dictionary definition of conservative, which is 鈥渉olding to traditional attitudes and values and cautious about change or innovation.鈥�

As for private equity鈥檚 rightward tilt, an easy explanation may be that policies helpful to the industry practitioners鈥� bottom line have been enacted under Republican administrations, including lower capital gains tax rates.

2020 is different

As we look at private-equity and venture capital contributions for the 2020 election, some of the trends in prior campaign cycles are holding steady. Others have shifted.

Venture capitalist support still appears tilted toward Democrats. We see this a bit in campaign contributions to individual candidates, capped at $2,800. But the big money is showing up in larger donations to PACs, such as the Democrat-supporting Senate Majority PAC, heavily backed by prominent VCs and tech founders including , , and , per .

For the private-equity industry, meanwhile, one standout trend is that it has shifted left in its political leanings in recent years.

A from the Center for Responsive Politics found that private equity and investment firms gave significantly more to Democrats in the 2020 election cycle than to Republicans ($32.6 million vs $23.8 million). That鈥檚 a shift from 2016, when the industry gave more to Republicans ($35.3 million) than to Democrats ($32.2 million).

The really sharp contrast, however, is between 2012 and today. Back in 2012, when private-equity pro Mitt Romney was the Republican presidential nominee, his party raised a whopping $43.3 million from the industry, compared to a mere $16.1 million for Democrats.

Notably, Romney鈥檚 old firm, Bain Capital, is now a big contributor to the Democrats鈥� lead. For 2020, 94 percent of went to Democrats. Bain Managing Director , in particular, has been a heavy donor to Democratic candidates and political groups.

Meanwhile and in particular its CEO, , stand out as major Republican contributors. While Blackstone is only somewhat pro-Republican in its , Schwarzman has gone all in. Among his donations: $10 million to a group aiming to defend the Senate鈥檚 Republican majority, and $3 million to America First Action, a PAC supporting Trump鈥檚 re-election.

The Trump factor

Schwarzman aside, all-in-all neither venture capital nor private-equity pros are a very pro-Trump bunch. Blackstone is the lone donor from either industry who tops the list of America First Action supporters. And his presidential contributions are dwarfed by his much larger donations to Republican Senate-focused PACs.

One reason financially savvy Republican supporters may be focusing more on the Senate races than the presidency is the perception that they have better odds of winning. Political forecasting site gives Trump a less than chance of winning the presidency. It gives Republicans a 39 percent of maintaining a Senate majority.

Moreover, Senate contributions seem motivated more by industry-specific concerns than a particular love for a candidate.

The Wall Street Journal that 鈥渕any who work in private equity prefer control of the government to remain divided as it would make major overhauls of their industry more difficult.鈥� An example of such legislation is a bill Sen. Elizabeth Warren, D-Mass., introduced last year, the , which would add restrictions on certain buyout firm practices and increase taxes paid on carried interest. Its chances of passage rely on a Democratic Senate majority.

Where the buck stops

For all the concerns around money in politics, it鈥檚 unclear how much impact it will have this time around, with swing voters in today鈥檚 hyperpartisan political environment. And while money can buy TV ads, much influencer activity–such as viral online memes–can be produced and distributed for minimal cost.

That may be why some of the money that venture and PE tycoons are putting into politics comes in the form of expenditures that don鈥檛 show up in campaign contribution databases, such as get-out-the-vote efforts.

With an election just six weeks away, we鈥檒l find out soon how well PE and venture donor-favored candidates performed. For now, it seems, startup investors are focused mostly on squeezing out as many public market exits as they can before November.

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