Guarding Against Foreign Influence

In a significant move to safeguard the integrity of U.S. investments, over 20 venture capital firms have embraced the Clean Capital Certification. This pledge is their public commitment to abstain from accepting funds from countries that could pose security risks, such as China, Russia, Iran, or Cuba.

• Marlinspike Partners
• Humba Ventures
• Snowpoint Ventures

“We must ensure that US adversaries do not directly profit from our success, and publicly signing the Clean Capital Certification is a way to commit to that duty as a community,” said Craig Cummings, partner at Moonshots Capital.

Craig Cummings, Moonshots Capital

The Catalyst for Change

This initiative was spearheaded by Future Union, an advocacy group dedicated to preventing foreign interference in the private sector. The group warns that new technologies, if misused, can become tools of authoritarianism and misinformation.

Future Union’s Executive Director Andrew King has been sounding the alarm on these issues for years. Conversations with defense sector friends highlighted how foreign influences, particularly from China, were infiltrating through venture capital channels.

The Rising Concerns

The potential risk is not just theoretical. The FBI’s investigation into Hone Capital for allegedly sharing information with Chinese investors underscores this threat. Similarly, a congressional report criticized five U.S. firms for investing in Chinese companies linked to military advancements and human rights violations.

“American national security and economic prosperity are put at risk when U.S. companies invest in our foremost adversary or welcome CCP-backed investors on their boards,” noted Congressman John Moolenaar.

Congressman John Moolenaar

Challenges and Future Steps

Despite its noble intentions, the pledge is not without its flaws. It relies on voluntary self-attestation without a formal verification process. Concerns remain about limited partners potentially receiving funds from foreign entities.

King acknowledges these issues but views the pledge as an initial step toward greater accountability. Future plans may include third-party vetting and more comprehensive certifications.

A Call for Industry Integrity

This movement towards clean capital is gaining momentum amidst heightened awareness of geopolitical risks. As more firms join this initiative, it sets a new standard for responsible investment practices—one that prioritizes national security alongside economic growth.

“The self attestation is public,” King emphasized. “And there’s reputational risk and damage that could come from attesting and then your other limited partners or others finding out that it wasn’t the case.”

Andrew King, Future Union