Peter Thiel’s $1.25 million Trump donation draws Y Combinator into bitter Silicon Valley feud

(This story was updated 10/18 at 1:30 a.m. with additional developments.)

As Donald Trump’s presidential campaign has stumbled in recent weeks amid missteps and sexual harassment accusations, the developments have cemented hard feelings on both sides.

His supporters are digging in harder, echoing Trump’s claims of media conspiracies and rigged elections. For those opposed to Trump, the drumbeat of news only serves to confirm their feelings that he is a racist, misogynistic Demogorgon.

Now, thanks to news that libertarian investor Peter Thiel is donating $1.25 million to Trump’s campaign, Silicon Valley has found itself sharply divided about whether Thiel should be shunned or not. A region that likes to think of itself as ultra-tolerant is wondering how to respond to Thiel’s increased support of a candidate that many here find intolerable.

Thiel had already drawn rebukes from some in the tech community for standing as a delegate for Trump and speaking on his behalf at the Republican National Convention this summer. Of course, Trump’s controversial views were already well known at that point. But the fact that Trump’s been besieged by the recent harassment accusations and has ramped up his rhetoric in response has left many surprised and angry that Thiel would donate such a large sum of money at this late date.

Of course, Thiel seems to shrug off such blowback. So instead of going at Thiel head on, critics infuriated by his donation have directed their ire at Y Combinator, the influential startup incubator founded by Paul Graham and now run by Sam Altman. About two years ago, Thiel joined as a partner, with Altman writing:

“Peter is one of the two people (along with PG) who has taught me the most about how to invest in startups. I am confident that Peter joining will be great for YC.”

But now that association has put YC in an awkward position. Silicon Valley, which leans Democrat anyway, has tilted even further in that direction this year, with Graham and Altman among those blasting Trump:

I've had a feeling of deja vu about Trump for months and I just figured it out. He's a troll.

— Paul Graham (@paulg) October 15, 2016

Despite the anti-Trump stance from YC leaders, word of the Thiel donation triggered some prominent individuals to insist that YC denounce Thiel and cut ties to him. Among those leading the charge was David Heinemeier Hansson — founder and CTO at Basecamp — who posted a series of tweets criticizing YC:

If being his registered delegate, his keynote speaker at convention, and a top donor with $1.25m+ doesn't make him a surrogate, what would? https://t.co/oBPTs0EmXc

— DHH (@dhh) October 16, 2016

But he wasn’t alone:

Women applying to YCombinator, take a good look at their principled stand against a partner who supports a sexual predator

— Pinboard (@Pinboard) October 16, 2016

Tech leaders: when you make excuses for Peter Thiel for supporting Trump, we hear you. Women and ppl of color are taking notes.

— Catherine Bracy (@cbracy) October 16, 2016

This fighting led to a debate about whether Silicon Valley, by denouncing Thiel, would be stifling dissent and whether this was a dangerous step toward policing political speech.

This is disgusting. Nobody will write about this, so I will. Someone should investigate his company for discrimination. pic.twitter.com/X8syniixwe

— Cyan Banister (@cyantist) October 16, 2016

https://twitter.com/paultoo/status/786990416537149441

Altman eventually weighed in with his own tweetstorm and promised a lengthier blog post explaining YC’s position later this week:

3) Thiel is a high profile supporter of Trump. I disagree with this. YC is not going to fire someone for supporting a major party nominee.

— Sam Altman (@sama) October 17, 2016

UPDATE: As he promised, Altman wrote a blog post in which he endorsed Hillary Clinton, and also explained his thoughts on the Thiel situation.

“Some have said that YC should terminate its relationship with Peter over this,” Altman wrote. “But as repugnant as Trump is to many of us, we are not going to fire someone over his or her support of a political candidate.  As far as we know, that would be unprecedented for supporting a major party nominee, and a dangerous path to start down (of course, if Peter said some of the things Trump says himself, he would no longer be part of Y Combinator).”

That didn’t seem to satisfy everyone. Ellen Pao, co-founder of Project Include, announced the organization was cutting ties with Y Combinator and ending the diversity-related work they were doing together. Pao argued that financial support of Trump goes beyond simple political disagreement and into the realm of supporting abuse and discrimination.

“But Thiel’s actions are in direct conflict with our values at Project Include. Because of his continued connection to YC, we are compelled to break off our relationship with YC,” she wrote. “We hope this situation changes, and that we are both willing to move forward together in the future. Today it is clear to us that our values are not aligned.”