Just minutes after the polls closed on Tuesday night, Matt Mahan — the great gubernatorial hope of Silicon Valley, the moderate mayor and pro-business pragmatist who would swoop in to save the billionaires from the unions and the leftists who have overtaken California — took the stage at a decidedly unglamorous election watch party in San Jose and conceded defeat.

Surrounded by neighbors, supporters, and, noticeably, none of the famous Silicon Valley billionaires who’d promised him the world — or, at least, the state — he thanked his campaign staff and professed excitement for returning to his day job as mayor of San Jose. Later, asked if he thought the influx of tech money had not floated his campaign but sunk it, he shrugged: “You can’t pick your donors.”

Spurred by a proposed billionaire tax and years of grievances about rampant spending and public-sector union power, Silicon Valley leaped into the California political fray this year, spending tens of millions on Mahan and other candidates in the hope that they would turn an increasingly populist political sentiment in their favor. But tech money, it turns out, can’t buy you strategy.

Across the state, candidates propped up by tech moguls, including Sergey Brin, Michael Moritz, Reed Hastings, and Ron Conway, failed in top-line races. The places where Silicon Valley saw true victories were where the moguls played politics as usual, quietly funneling money into candidates for state legislative races and super PACs with longer time horizons, rather than flashy avatars of rich-guy rage.

The lesson, as one longtime adviser put it, is that “politics isn’t the same as investing in a startup. Stop trying to think that because you made a good call on investing in a SaaS company, you know what you’re doing in terms of electing a governor.”

Mahan soared into the governor’s contest in January on a runway of tech donations, his candidacy spurred by big-donor agita around the status quo in Gavin Newsom’s California, the mediocrity of the other candidates, and — perhaps most of all — the proposed billionaire tax. Mahan quickly racked up donations from the likes of venture capitalist (and SF Standard chairman) Moritz, Netflix CEO Hastings, and Google cofounder Brin, as well as the endorsement of aspiring kingmaker Garry Tan, who called him “the future of California.”

But the billionaire backing soon became more of a hindrance than a help. Labor groups seized on the donations, dubbing Mahan a “tech bro” who is in the pockets of the wealthy elite, while infighting among those same donors led to the ouster of his campaign manager just two months before Election Day. As Mahan continued to flounder in the polls, barely breaking double digits, the promised tech money didn’t pour in as readily as some backers had hoped. 

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“They take a venture approach, where they put in a little bit and want to see immediate results, but politics doesn’t work that way,” said the strategist, adding that boosting name recognition across the state for the virtually unknown Mahan would have cost tens of millions more than the nearly $50 million he ultimately raised. “That’s the kind of flawed approach [the tech donors] took  — until it was too late.” 

The titans had even less luck with Ethan Agarwal, another late-arriving long-shot challenger to an established Democrat, five-term Silicon Valley Rep. Ro Khanna. Deep-pocketed donors like Conway, Blake Byers, and Coinbase CEO Brian Armstrong lined up to sponsor Agarwal’s campaign after Khanna, once a favorite of the tech set, endorsed the billionaire tax in December. Agarwal, himself a tech founder, hosted fundraisers with hosts of the “All-In” podcast and hobnobbed at Atherton mansions, but the district’s voters paid no mind. As of Wednesday morning, Agarwal was not in the top three contenders for the seat, with a grand total of 6.2% of the vote, versus Khanna’s 57.8%.

Cooper Teboe, Khanna’s chief strategist, said tech billionaires badly misread the room by running a candidate to the right of the congressman.

“I think their entire thesis has been off and has been a misunderstanding of where the political moment is — the anger and the populism on both sides,” he said. “They’re trying to sell moderation, the issue with that being that folks are not feeling moderate. Folks are feeling the American dream is dead and gone, and it is impossible to get ahead.”

He added: “There is not enough money in the world to convince people who are struggling that they are not struggling.”

In fact, based on Tuesday’s preliminary results, it’s unclear whether populist sentiment is thriving at all in California. Proposition D, the Overpaid CEO Tax favored by progressives in San Francisco, seems likely to fail. Tom Steyer, arguably the most leftist candidate in the governor’s race, appears to have been edged out by a more mainstream Democrat and a Republican. Scott Wiener, a recipient of substantial tech funding, handily won his race to replace retiring Rep. Nancy Pelosi against labor favorite Connie Chan and progressive Saikat Chakrabarti.

Another tech-money-fueled primary, venture capitalist Eric Jones’ bid to unseat incumbent Rep. Mike Thompson of Napa, remained in limbo Wednesday. Jones and Republican Ray Riehle are neck and neck to face off against Thompson in November. 

Still, there were a few decisive victories for the tech set Tuesday night. While other elites were popping off on X or coming up with creative last-minute funding gimmicks (opens in new tab), two groups backed by tech money were quietly playing politics as usual, funneling millions to moderate down-ballot candidates who seem likely to play nicely with business in order to ward off their more progressive challengers.

California Leads, a PAC funded by Google and Meta, and Grow California, a project of Ripple cofounder Chris Larsen and Tim Draper, spent more than $14 million combined on state Senate and Assembly races from Los Angeles to the South Bay, focusing on “pragmatic, solutions-oriented candidates” who would “spur innovation, create jobs, and protect livelihoods.” (Read: no progressive flamethrowers.) It seems to be working: All five of the Democrats supported by California Leads appear likely to make it to the general, as do the eight Democrats backed by Grow California.

Both groups credit their electoral success to a back-to-basics approach. California Leads came out early with ads featuring local leaders in support of the chosen candidates. A source close to Grow California said the group relied heavily on data, determining the issues that mattered most to voters in each district and finding candidates who spoke directly to those concerns. “We really stuck to the metrics and having voters drive our investment, versus candidates and interest-group politics drive it,” the source said.

But Andrew Acosta, a Sacramento consultant, said it is too early for any of these groups to take a victory lap. Tech interests have inserted themselves into California politics off and on for decades, he said, but what matters most is staying power. If the high-powered PACs and big donor checks dry up once the billionaire tax is off the ballot, the Silicon Valley titans will have little to show for their efforts.

“It’s one thing to go after an initiative; it’s another thing to take over the legislative caucus,” Acosta said. The real question, he added, is, “What are you going to do next cycle?”