The candidate who built Silicon Valley is the one who wants to tear it down

For months, there has been talk of a group of Silicon Valley billionaires recruiting to take on Representative Ro Khanna. On Tuesday morning, the candidate made this official.

Ethan Agarwal (pictured above), a 40-year-old tech entrepreneur with no political background, told TechCrunch on Monday evening that he is running for California’s 17th district. This strategy is expected to set up what could be a major revenue challenge in 2026.

The race focuses on Khanna, a 49-year-old Democrat who is considered a possible 2028 presidential candidate. publicly supported California’s one-time income tax. His confession is so to be irritated Some of the founders of the government are rich with money, but Khanna has doubled down, to start laws of the land and Senator Bernie Sanders that would introduce a 5% annual tax on all Americans making $1 billion or more — a proposal their offices estimate would raise $4.4 trillion over ten years.

There is something strange about this situation. Agarwal is a Wharton graduate and spent three years at McKinsey before co-founding the audio fitness company Aaptiv, which he sold in 2021. He recently founded financial services company Coterie, backed by Andreessen Horowitz.

When Khanna ran for the same seat in 2014, he was outside tech-backed, with top names like Marc Andreessen, Sheryl Sandberg and Eric Schmidt supporting him. He challenged Democratic incumbent Mike Honda, lost, but came back in 2016 to win.

Critics at the time called Khanna her husband. Ten years later, the same case will be brought against the person who wants to free him.

The following is an edited version of our interview with Agarwal.

TechCrunch: Last summer, you announced your plans to run for governor of California. Now you are entering the congressional race instead. Why did they change?

Agarwal: I decided to run for the governor back in July when the field was very thin. I don’t have a political background – I come from a technical background. But then a few strong fighters stepped in, including Matt Mahanwhich I think is very powerful. I’ve been following Ro since his first race in 2012 – I was his biggest supporter. But in the past few years, he’s been moving to the left, and when he tweeted in favor of an income tax in late December, that was the straw that broke the camel’s back. I realized that I could have more energy to run in District 17 and remove Ro.

TC: Who is supporting you financially?

Agarwal: We’re filing papers tomorrow, so we don’t have a bank account and I can’t get money until then. That said – (Y Combinator CEO) Garry Tan is behind me, (DoorDash co-founder) Stanley Tang, and many others from the tech community whose names will come out in the coming days and weeks.

(Editor’s note: The participation of Tan, Tang, and others may lead to a familiar attack: that Agarwal is less independent than a vehicle for complaining about billionaires. It is worth noting that Khanna faced similar criticism when he first ran, and was supported by the technical support group that is now).

TC: Can you give me a little more color on your plan? Beyond closing the doors, is there another way to get rid of the billion tax?

Agarwal: One is tax credits that are taken against property. Wealthy people take out loans on their products and pay low interest rates. Because it’s technically a loan, it doesn’t pay taxes. I think it makes sense to pay back those debts.

The second is the high yield – California’s current rate is 13.4% and I think it makes sense to consider increasing this. Third, most real estate in California is owned by private companies or individuals who hold it as an investment. I believe you have to pay much higher taxes on a house that is used as an investment than a first home. This can raise income and reduce stress on families living in their current assets.

(The idea of ​​a debt tax has been around for a long time in wealthy circles – mostly promoted by VCs. Chamath Palihapitiyaalthough it may go back to hedge fund giant Bill Ackman. (The proposal would treat stock-backed loans as taxable transactions, eliminating the long-term process by which investors receive capital gains without selling them, thus paying no capital gains tax.)

TC: If you were to go to Washington, what would your three biggest things be?

Agarwal: First, ban the sale of property to members of Congress and their families. Second, ban corporate PAC funding. Number three, time limit.

(At the beginning of the debate, Agarwal spoke at length about the 5,000 children in the 17th district — the richest congressional district in the country — living below the poverty line, and he described creating “the first congressional district in history to end childhood poverty” as one of his proposals. That point did not make the top three.)

TC: Man, accuse Ro Khanna of being a stockbroker. Can you explain?

Agarwal: He has invested more in stocks than any Democratic congressman in the history of the country – in tobacco, oil and gas, Big Pharma, tech. He publicly announced a ban on congressional stock trading, then made 4,000 trades last year. Although the bill did not pass, there is nothing stopping him from enforcing it. In my case, I will leave my full profile the first day I am elected, so no one will be surprised if my votes reflect my account or my true beliefs.

(All these claims need to be investigated. Khanna supported the TRUST in Congress Act and initiated resolutions calling for a ban, but he did not write independent laws. In the trading statistics, Khanna has repeatedly said that he does not own or sell any kind of stock, and that the business in question belongs to his wife, whose trust is not done, which is not independently controlled, which is not controlled by the family. The debate under the rules of the Office of Government Ethics Whether the distinction satisfies the voters is a question to which the campaign must respond.)

TC: Should social media be responsible for harming young people? Section 230 of the Communications Decency Act currently protects them from liability for user content. Where do you stand on changing that?

Agarwal: I think Section 230, when it was first drafted (in 1996), was clear. The goal was for platforms to act as hosts. But the way they’ve changed, they’re now realizing what we’re seeing because of the algorithms they push. I don’t think it makes sense to make social media companies responsible for what people post – the volume is huge, and having someone else decide what’s harmful is entering very dangerous territory.

That said, I think it’s worth revisiting the long-term impact on young people’s health. If you talk to Meta, or X, or anyone else, they will all say that they don’t benefit from harming the youth. We all agree that we do not want this to be the result.

TC: What about controlling the AI ​​industry, many of which are behind you?

Agarwal: I think about national security. I am confident that having strong role models is important for America, and if we don’t, China will beat us.

Some restrictions make sense – AI should not help you harm yourself or someone else. But I don’t think we should limit the power of companies to create and promote these models. It is imperative that we allow them to thrive, for national security reasons, if nothing else.

TC: Do you think we need something like the FDA for AI?

Agarwal: I have heard that idea. The FDA has done a fantastic job of keeping Americans healthy and safe – I trust the people who work there, which I can’t say for many government agencies. If there is a way to create an independent, political authority with a flexible voice, that makes sense to me. But I want to make sure that it’s designed to strengthen America’s national security, not politics.

TC: What about the prediction markets – Polymarket, Kalshi? Do they need more rules?

Agarwal: To be clear, Kalshi and Polymarket are both regulated by the CFTC. I think part of the problem is that betting software has created confusion about what is allowed which Polymarket and Kalshi have come up with as alternatives. But the laws they have today are very good.

TC: How do you plan to run this campaign? Do you do this all the time?

Agarwal: This is 110% of my life. I went to (private school in San Jose, Ca.,) Harker, which is in the district. I grew up nearby. I know hundreds, maybe thousands of people who live there. My campaign is a grassroots game – I’m going to Chinese and Hindi education schools, to cultural events. Holi is coming; Chinese New Year, Purim, is on Tuesday. I’ll be on all of that, meeting people, going to small businesses.

I think that’s the biggest difference between Ro and me: he’s building a world record, and I’m fine with that if that’s what he wants to do. But he is doing this by abandoning the people of his district. I’m not leaving California. I don’t use this as a stepping stone. He is of the world; I’m local. And I think that 17-year-olds know that they need someone to focus on themselves.

TC: What inspired you to get into politics in the first place?

Agarwal: Maybe this is corny, but – my father he came here with nothing, making $14,000 a year when he first arrived. He started a company, took it public, sold it. I was born on the third base because of that. I have started two companies and sold both.

And then I see the people around me are no longer benefiting from the same system that made it all possible. People here are hardworking, have great potential – but the environment is not helping them either. I’ve been complaining about this for a long time, and I felt like it was time to stop and do something about it.

TC: Is this the beginning of politics?

Agarwal: This is not the beginning of work. I see a specific problem in section 17 that I would like to address. I’ll set a time limit for myself – I won’t do more than five sessions – and then I’ll get back to business. Ministry should be a calling, not a job. And honestly, I don’t think it helps people who have it better when it comes to work. Even if the border restriction bill passes, I will push myself. That’s what I believe.

(This is also in line with Khanna’s previous experience – an outsider who comes with no interest in becoming a politician unless ordered by the tech industry to shake things up. Whether Agarwal succeeds in Khanna’s first attempt in 2014 may depend on whether Khanna makes his own difficult money, he seems to be doing everything in his power to ensure that he doesn’t.)