Key Takeaways
- • The FBI is investigating whether Hone Capital, a California-based venture capital fund, passed internal trade secrets to Beijing, according to the Financial Times, citing "several people close to the matter."
- • Hone Capital invested $115 million of Chinese money in 360 American tech startups between 2015 and 2018, including Stripe, Boom and Cruise.
- • FBI interviews reportedly raised concerns that some Hone portfolio companies provide services to the US government and that some of the fund's money may have originated from Chinese government funds.
- • The probe follows a February report by The Post on national security risks from US venture capital investment in Chinese technology companies, and an earlier Future Union watchdog report led by venture capitalist Andrew King.
- • The FBI did not respond to The Post's request for comment; no charges or findings have been reported.
Summary
The FBI is investigating whether Hone Capital, a California-based venture capital fund, passed information to Beijing after deploying $115 million of Chinese money into one of Silicon Valley's most active early-stage portfolios. According to the Financial Times, Hone invested those funds between 2015 and 2018 across 360 American technology startups, including payments company Stripe, aerospace engineering firm Boom and driverless-car manufacturer Cruise. The FT, citing "several people close to the matter," reported Wednesday that federal investigators are examining whether the fund passed internal information "about the technology, finances or clients of start-ups" to benefit Beijing.
According to the FT, concerns raised during FBI interviews include that some of Hone's portfolio companies are contracted to provide services to the US government, and that some of the fund's money may have originated from Chinese government funds. The reporting does not establish that any information was transferred, and the FBI did not respond to The Post's request for comment.
The investigation follows a February report by The Post examining national security risks associated with US venture capital investment in Chinese technology companies. Venture capitalist Andrew King, who advises the House Select Committee on the Chinese Communist Party, told The Post at the time that intangible relationship knowledge is "far more impactful – and dangerous – if transferred to an adversary." King founded Future Union, a nonprofit venture capital watchdog that issued an earlier report on the threat, first reported by The Post.
King told The Post on Wednesday that venture capitalists' obligations to their limited partners justify using available means to support portfolio companies, but that those means should not include trade secrets. Legitimate value, he said, lies in knowledge gained from tracking thousands of startups, business experience and go-to-market expertise.
According to the FT, concerns raised during FBI interviews include that some of Hone's portfolio companies are contracted to provide services to the US government, and that some of the fund's money may have originated from Chinese government funds. The reporting does not establish that any information was transferred, and the FBI did not respond to The Post's request for comment.
The investigation follows a February report by The Post examining national security risks associated with US venture capital investment in Chinese technology companies. Venture capitalist Andrew King, who advises the House Select Committee on the Chinese Communist Party, told The Post at the time that intangible relationship knowledge is "far more impactful – and dangerous – if transferred to an adversary." King founded Future Union, a nonprofit venture capital watchdog that issued an earlier report on the threat, first reported by The Post.
King told The Post on Wednesday that venture capitalists' obligations to their limited partners justify using available means to support portfolio companies, but that those means should not include trade secrets. Legitimate value, he said, lies in knowledge gained from tracking thousands of startups, business experience and go-to-market expertise.
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