"By doubling the tax rate on venture capitalists, we run the risk of killing the golden goose that's laying the golden eggs," Menlo Ventures managing director Venky Ganesan said in an interview with CNBC's "Closing Bell."
"We are going to have entrepreneurs leaving America to go to China, Singapore or India, creating jobs and companies there. We need to create jobs and companies here."
Clinton and Trump have both talked about eliminating the carried interest tax loophole that allows venture capitalists to treat earnings as capital gains instead of ordinary income. Capital gains currently carry a tax rate of 23.8 percent, while labor income is taxed at 39.6 percent.
Such a plan would discourage investment in a market that is already struggling on funding, Ganesan said.
Venture capitalism is the "best jobs creation engine we have," he said, noting that venture-backed companies employ over 3 million people.
As for those who may argue that venture capitalists don't deserve a tax break over other professions, Ganesan said that VCs lose money in 42 percent of the deals and that the tax breaks are an incentive to invest in risky ventures.
— CNBC's Jeff Cox and Silvana Henaeo contributed to this report.