Venture Capitalists Head to Washington

If Sand Hill Road is home to the venture capital industry, capitol hill has become its home away from home. With legislators tackling everything from taxes to energy policy and health-care reform, the industry believes the Obama team will be more sympathetic to their concerns than previous Administrations. "This is an Administration with individuals who understand and respect technology," says Mark Heesen, president of the National Venture Capital Assn. (NVCA), the industry's primary lobbying group. "And from Obama on down, there is a view that innovation is key to getting us out of this economic situation."

The NVCA spent $2 million lobbying in 2008, up from $500,000 in 2005, according to the Washington-based Center for Responsive Politics, a nonprofit that tracks the influence of money in politics. But that doesn't count money being spent by individual firms or the companies in which they invest. NGEN Partners, a Palo Alto (Calif.) venture capital firm specializing in clean energy, encouraged two of its portfolio companies to retain D.C. lobbyist Beth Viola of Holland & Knight six months ago, says Steve Parry, a managing director at NGEN. While Viola now lobbies directly for those startups, she also provides NGEN with inside-the-Beltway intel. And Parry says other firms have recently taken similar steps. "Understanding what is being proposed is mission critical for venture investors," says Parry.