Chamath Palihapitiya, founder of VC firm Social Capital, recently said that he and his colleagues would “pause” their day jobs in order to help Mike Bloomberg get elected president.
Obviously this was a hypothetical statement, as Bloomberg has not yet announced plans to run, but the comment generated an understandable amount of buzz. After all, Palihapitiya was an early Facebook (FB) employee who is credited with helping to massively expand its user base. What if he could lead a similar mobilization effort for New York City’s former mayor?
For me, however, it sparked a much different question: By suspending his firm’s operations, wouldn’t Palihapitiya be breaching his fiduciary duty to limited partners in the funds that Social Capital manages? Both in terms of active portfolio management, and also when it comes to investment opportunities that arise between this summer’s political conventions and November’s election?
Here is what Palihapitiya actually said:
“I’ve told them [Bloomberg’s folks] that most of us would pause our day jobs to get him elected. I’ve offered to run ‘Growth’ for the period of his campaign. We are 100% serious… The same team that helped build Facebook to one billion users would do our best to activate the entire United States to put him in The White House.”
I shared my concerns via Twitter on Saturday, which prompted the following responses from Palihapitiya:
I couldn’t quite tell if this was tongue-in-cheek or a cop-out, so I reached out to Social Capital spokeswoman Ashley Mayer.
She replied that Palihapitiya’s use of “pause” was only in the context of a few people working with Bloomberg campaign staffers for a few days, and that the firm would not actually suspend its core operations for the length of a (still hypothetical) campaign.
More specifically, Social Capital’s “Growth” team is a dedicated group of data scientists who are not traditional venture capitalists (more on the team’s activities is available here). It also is important to note that no Social Capital employee would be required to aid Bloomberg.