This content is from: Innovation
Is Calif. VC Fund Politically Incorrect?
International Technology University says it's getting a bum rap for being politically incorrect.
International Technology University says it's getting a bum rap for being politically incorrect. The Los Angeles Times reports that the Century City-based venture capital firm saw $120 million from some of its biggest investors walk out the door when, among other things, they got the idea that ITU was soliciting campaign contributions on behalf of one-time California gubernatorial candidate Steve Westly from the startups the firm funded - a no-no under federal and state laws - especially when the donations come from out-of-state companies. The appearance of impropriety led officials from Colorado and New Mexico last summer to ask ITU to reimburse the pension funds, as they are sensitive to public perception as the result of recent corruption allegations against retirement systems in San Diego and elsewhere. The founders of the 6-year-old firm, Chad Brownstein and Jonah Schnel, say they feel victimized and that there was never any pressure on the start-ups to give. "There is nothing illegal here. There is nothing illicit," Brownstein told The Times. "This has been a huge disruption to who we are and what we do." Brownstein says the political issue is not the main reason for the departure of investors Harvard University, The California Public Employees' Retirement System, state pension funds from Colorado and New Mexico, and singer Gene Simmons of the rock group KISS. Rather, Schnel says, it has to do with some top staffers leaving the firm. "The fact that this political stuff got brought into the conversation threw gas on the fire," Schnel explained in a Times interview.