VC politicos falter before Election Day

If there was ever a chance for a venture capitalist or a private equity pro to get voted into office, now appears to be the time.

Tim Mahoney, co-founder of vFinance and founder and president of The Center for Innovative Entrepreneurship in Florida, was facing an uphill battle in his run for a House seat in the U.S. Congress. That is to say, it was quixotic, until this fall when the hopeful’s six-term incumbent challenger, Mark Foley, was busted for sending sexually explicit instant messages to teenage pages. After Foley resigned and dropped out of the race, the Republican party tapped a replacement to oppose Mahoney. But, Foley’s name will still appear on the ballot this month, which is a boon for Mahoney, who serves as chairman and COO of vFinance, a publicly traded asset management company.

In typical investor bravado, Mahoney says he could’ve beaten Foley without the help of the congressional page scandal.

The few, the proud

Several months ago, Mahoney was one of a handful of candidates with some kind of connection to private equity or venture capital. With Election Day now just days away, he appears to be the only one of the bunch who has a good shot of winning.

In Connecticut, Ned Lamont remains a viable candidate for a U.S. Senate seat, but he is now trailing Joe Lieberman. Lamont is a PE-backed entrepreneur whose wife Annie is a managing partner with Oak Investment Partners. Lamont’s business acumen had nothing to do with him getting this far. Thanks to his anti-war stance, he defeated incumbent Lieberman in the August primary. But the wily Lieberman stayed alive by recasting himself as an independent.

Though Lamont has connections to the venture world, he has not received backing from the National Venture Capital Association. In fact, the NVCA’s political action committee, VenturePAC, has contributed $7,000 to Lieberman, according to a watchdog group that tracks political contributions. Overall, the nonpartisan Center for Responsive Politics found that VenturePAC has given Lieberman $14,000 since 1998. NVCA President Mark Heesen says that the Lamont campaign has intentionally shunned all contributions from lobbyists and PACs.

Triple threat

While Lamont and Mahoney are still in the race, three other VC-related candidates are now watching the election from the sidelines: Chris Gabrieli, Marc Holtzman and William Weld.

Gabrieli lost the Democratic primary for governor of Massachusetts. Gabrieli is a venture partner with Bessemer Venture Partners and also co-founder of an SBIC called Ironwood Equity Partners. Last year, he gained notice in the political arena for a successful effort to overturn Massachusetts Gov. Mitt Romney’s calculated veto of an embryonic stem cell research bill—an effort that included boisterous VC industry support.

Gabrieli barely made it onto the Democratic primary ballot, after a last-minute push for delegates at the State Democratic Convention last year. But he made it there, and the sophomoric “he’s trying to buy the election” critics came out in full force against him.

Over in Colorado, Holtzman did not qualify for the Republican primary for governor. Holtzman in the late 1980s moved to Eastern Europe to help finance companies in countries emerging from communist control. The eventual outcome (after some political scandal) was EurAmerica, a private I-bank that raised equity and debt capital to invest in such companies, and which also advised on M&A transactions. He and his partners eventually sold it to ABN Amro, and Holtzman returned to Colorado.

Holtzman’s competition for the GOP gubernatorial nod was current Congressman Bob Beauprez.

On the East Coast, Weld pulled out of the Republican primary for governor of New York. The former Mass. governor and Leeds Weld & Co. partner quit after being dogged by his firm’s investment in Decker College, a for-profit Kentucky institution where Weld also served as interim CEO. The school collapsed after allegedly stealing government funds designated for student aid (among other things).

White House or bust

November won’t see the end of VCs with political ambition. Mitt Romney, standing in the GOP corner, has already gotten a start on his presidentital run, which you can read about in his blog (blog.electromneyin2008.com). He built his presidential campaign war chest with private equity riches, having founded Bain Capital before his current gig as governor of Massachusetts.

Many thought one of Romney’s main challengers for the White House would be Mark Warner, a former governor of Virginia whose appeal to moderates and independents was said to be similar to that of Bill Clinton. But Warner, who helped launch Columbia Capital, last month ruled out a 2008 presidential bid in favor of spending time with his family.