Why VCs Should Support John Kerry –

John Kerry was first elected to the U.S. Senate in 1984. There, he has fought to strengthen our economy, improve education, make health care more affordable, and has been the leading voice to protect the environment. During his 19 years on the Senate Foreign Relations Committee, he has been one of our nation’s most respected voices on national security and international affairs. John Kerry also has distinguished himself as a fiscal moderate, a free and fair trader and a leader in the issues of innovation.

In its April 24, 2000, issue, Business Week said that John Kerry was “emerging as the Senate Democrats’ most articulate advocate for technology.” He has sponsored or co-sponsored key bills, including legislation to have a moratorium on Internet taxes, to make the R&D tax credits permanent, to restore capital gains tax differentials for small businesses, to offer incentives to the seed capital industry, and to assist small businesses in gaining access to capital. He also has been a highly-regarded thought leader on Internet privacy.

In 2002, as committee chairman, Sen. Kerry permanently expanded the charter and name of the small business committee to the “Entrepreneurship and Small Business Committee” to recognize the importance of nurturing the needs of early stage growth companies.

Under George Bush, we have failed in technology, science, and economic policy. Since George Bush has taken office, America has lost over 1 million technology jobs. The United States has fallen from fourth to 10th in broadband access. The Bush budget cut 2005 funding levels for 21 of 24 scientific and research agencies. America’s 12th graders have fallen to 18th in the latest international comparison of math and science

proficiency. The Bush administration, according to the Union of Concerned Scientists, also has “distorted or censured scientific research for political motives at the expense of America’s place in a competitive scientific world.”

In George Bush’s term of office, federal spending has increased 29%, which is triple that of the increase during President Clinton’s second term and the largest increase in 40 years. According to The Economist, if the Bush administration policies continue, “deficits could average $500 billion a year for the next decade-an alarming prospect.” And, while Bush touts recent job creation, job growth over the past year is worse than during any year under Clinton, or during any economic recovery in over 50 years. It also remains millions of jobs below his predictions.

Fiscal Responsibility

John Kerry will return us to fiscal responsibility. He has promised to cut the federal deficit in half. As a young senator, Kerry broke with many in his party and with the entire Massachusetts delegation, to co-sponsor the Gramm-Rudman-Hollings deficit reduction plan.

Kerry voted for most of Bill Clinton’s economic programs and many of Kerry’s key policy advisors today are proven economic gurus from Clinton’s administration, including Robert Rubin, Roger Altman and Gene Sperling. Therefore, Kerrynomics is likely to have many similarities to Clintonnomics.

A Plan for Tech

Earlier this year, John Kerry outlined his strategy for technology and innovation that included three basic principles:

* The ability to innovate-to create new products, services and entirely new industries-is a unique strength of the American economy. Maintaining our entrepreneurial culture, world-class research universities, high concentration of “angel” and venture capital, and our openness to new ideas and hard-working immigrants from all over the world is critical to our future prosperity.

* The private sector is the engine of economic growth and job creation. The government’s important responsibility is to create an environment that will foster private sector investment and vigorous competition.

* The creation and adoption of new technologies are important because of the key economic and societal benefits they provide.

John Kerry’s plan calls for eliminating capital gains taxes for investments made in private companies held for over five years, reforming the regulations that impede America’s high-tech competitiveness, such as computer exports, and for a vigorous strategy to open foreign markets for U.S. goods and services by cracking down on unfair foreign trade practices and intellectual property piracy.

The Kerry plan also presents tax incentives for a comprehensive national strategy for universal broadband. And, most importantly, his plan promotes the resources needed to build a high-tech workforce for the 21st century. John Kerry is dedicated to improving our K-12 math and science education, and increases the investment to colleges and universities that commit to expand the number of undergraduates receiving science and engineering degrees.

Kerry Gets Science

On June 21, with the endorsement of 48 Nobel Prize winning scientists, John Kerry offered a plan to once again make America the leader in science. On Aug. 7, John Kerry further pledged to lift the Bush administration’s ban on stem cell research.

John Kerry recognizes that federal support of long-term research has played a critical role in creating high-tech products, services, and industries. The contribution of government-funded research is often critical to ignite the process of innovation before companies invest orders of magnitude more to move ideas to the marketplace. John Kerry plans to improve the funding to these agencies and restore integrity and honesty to science policy.

Civic Duty

During his career, John Kerry has proven himself to be strong, decisive and thoughtful, with the capacity to understand the complexities and opportunities that technology advancements can offer. He believes deeply that we can only accomplish our domestic and foreign policy goals in concert with a high-technology strategy for prosperity.

In February, 150 Silicon Valley executives, including many venture capitalists, endorsed John Kerry. In early August, 200 Fortune-500 level executives endorsed John Kerry, including many Republicans or past Bush supporters like Reid Dennis, Lee Iacocca, Owsley Brown, and David Bonderman.

The contrast between the candidates on foreign policy and social ideology is well documented in the daily press. The contrast on technology and economic issues is less reported, but just as striking. This is clearly the most important election of our lifetime, and I ask my fellow venture capitalists to vote for John Kerry for President on Nov. 2.

Mark Gorenberg is a partner with Hummer Winblad Venture Partners. He also serves as the California finance chairman for the Kerry-Edwards 2004 campaign.