Initiatives' VC backers get crash course in politics

At stake were two schemes aimed at the root cause of Silicon Valley's chronic high-tech labor crunch: a state school system that critics say has failed to deliver graduates adequately educated for the high-tech work force.

The losing voucher solution, Proposition 38, sought to give a state scholarship of at least $4,000 per child to families who opted to send their children to private schools. The successful bonds initiative, Proposition 39, lowered the majority required for California localities to pass school bonds from the current two-thirds majority to 55 percent.

Last night's big loser was also known as the Draper Initiative, written and sponsored by Draper Fisher Jurvetson VC Tim Draper. Draper sank roughly $20 million of his own money into the campaign for Proposition 38, which lost with less than a third of the vote, 71 percent to 29 percent. Draper's father, Draper Richards president Bill Draper, kicked in $2 million for the voucher campaign.

A scant 8 miles to the north of Tim Draper's Redwood City offices, Kleiner Perkins Caufield & Byers VC John Doerr was savoring a hard-fought victory for Proposition 39, which prevailed early this morning by a 53.3 percent to 46.7 percent margin.

With a much broader base of support among high-tech businesses, Doerr was able to raise even more money than Draper to get Proposition 39 passed. A Proposition 39 campaign representative said the campaign raised more than $27 million. Campaign co-chairman, state board of education member and NetFlix chief executive Reed Hastings said the campaign spent $31 million in its drive to pass the initiative.

Doerr had campaigned hard for the measure, racking up a roster of endorsements that read like a directory of California's high-tech companies and executives. In addition to Doerr's co-chairman, Cisco Systems chief executive John Chambers, Proposition 39 supporters included Adobe Systems, Advanced Micro Devices, Autodesk, Broadcom, Chase Hambrecht & Quist, Hewlett-Packard, Intel, National Semiconductor, Novell, Qualcomm, 3Com, the Silicon Valley Manufacturing Group, the Software and Information Industry Association, Barksdale Group partner and former Netscape chief executive James Barksdale, Handspring chief executive Donna Dubinsky, and Marimba chairwoman Kim Polese.

"We got support from high-tech leadership all across the state," Hastings said the morning after the initiative's late-night victory. "I was gratified to see that a majority of Californians want us to invest in public education and extend the New Economy's opportunities more broadly."

In a cliff-hanging finish, Proposition 39 spent most of election night in the loser's column, but around midnight it eked out a 50 percent majority and continued to build on it as the final precincts came in.

Proposition 39 followed an initiative--Proposition 26--spearheaded by teachers unions that California voters rejected in the March primary. Proposition 26 also would have lowered the required majority for passage of school bonds and won the enthusiastic backing and fund-raising support of Doerr and Hastings.

Proposition 39 prevailed where its predecessor failed thanks to a raft of new accountability measures, according to Hastings.

Proposition 39 "added caps on how money could be spent and oversight measures that proved to be the margin of victory," he added.

In addition to helping lead the charge for Proposition 39, Hastings took a vocal stand against the Draper Initiative--despite the fact that he and Draper are longtime friends and former colleagues on the state board of education.

"Tim Draper's a great guy, and he cares a lot about educational opportunity," Hastings said. "He just went through a $20 million graduate course in politics, and now he'll have a much more astute sense of what it takes to win. The sad part is that for the same $20 million he could have achieved more modest improvements in schools, and going forward he will."

Draper, who was traveling this morning, could not immediately be reached for comment.