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Silicon Valley venture capitalists react to Trump victory: 'It's like a funeral'

The capital of Silicon Valley: downtown San Jose, California
Geri Lavrov | Getty Images
The capital of Silicon Valley: downtown San Jose, California

While Donald Trump celebrates his victory in the presidential race, over 4,000 miles away in Portugal's capital Lisbon, the tech industry's A-list gather at the Web Summit, digesting the outcome of his shock win.

On Wednesday, the mood was somber, a far cry from the energy that raced through the conference on the previous day.

"It's like a funeral," one attendee told CNBC, who wished to remain anonymous because they didn't want to give a political view.

It was a shock result, particularly for the tech community who overwhelmingly backed Democratic candidate Hillary Clinton. A poll carried out by Web Summit of 224 venture capitalists found that 94 percent would vote for Clinton while 89 percent thought that she would win.

"It's a sh-t show, it's a train wreck," a venture capitalist, who also wished not to be named because they didn't want to be seen giving a political opinion, told CNBC.


Worries from the tech industry

Stock markets had a muted reaction after the open as Wall Street digested the result. The same sentiment is feeding through to the private market as venture capitalists (VCs) remain in wait and see mode.

The technology industry has been concerned with Trump's deeply negative rhetoric on immigration and women. If Silicon Valley can't attract talent, this could stifle innovation.

"There's obviously a question over H-1B visas that's going to put people into panic, it might decentralize the Valley a bit more, accelerate that tech movement outside," Tony Conrad, a partner at True Ventures, said during a panel discussion moderated by CNBC at Web Summit on Wednesday.

H-1B visas allows U.S. companies to employ foreign workers. Trump has previously talked about scrapping these.

Another concern from start-ups is whether this could affect their fundraising efforts. One investor told CNBC that companies should start thinking about where their next funding round is going to come from.

'False advertising'

Still, there was some reserved hope from the VCs, hoping the new U.S. president-elect's policies are positive for businesses.

"I think if you look at what Trump should be is pro-business, so based on his speech this morning, you hope that he understands the magnitude of the office he just got. Against that is a liberal Republican, which should be advantageous to business and investment, should be, I would underline that word," Jeff Schumacher, chief executive of BCG Digital Ventures, told CNBC in an interview.

Commentators also noted Trump's calm rhetoric in his victory speech on Wednesday morning, which contrasted heavily from the fiery rhetoric displayed in his campaign. Mood Rowghani, a general partner at Silicon Valley venture capital firm Kleiner Perkins, said Trump put on a "clinic" in "false advertising" during his campaign, and it's unlikely those policies will be carried out.

"I think actually his policies, I bet you, are going to embrace a lot of Democratic values in terms of how they are enacted. I think a lot of incendiary stuff he put out there was to get elected," Rowghani said in the panel discussion.

"And I just think it's important from a business perspective not to be reactionary on what he said to get elected because he's proven that … he's not going to hold himself accountable to what he has said in the past."

Opportunity?

VCs remained upbeat and said that the situation is unlikely to stop good companies raising money. In fact, it could be a good opportunity.

"In 2008 we invested in a small company called Fitbit, 10 days after the market collapsed. So I think these are opportunities to find good companies in this market as in any market," Conrad said.