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SAN FRANCISCO — Five years ago, an up-and-coming venture capitalist with an unusual past was raising money to invest in hot Silicon Valley start-ups.

“We want to be part of start-ups’ journeys from the very start,” Masha Bucher allegedly wrote of her new firm, Day One Ventures, in an email to potential investors.

Bucher, a former teen leader of Russian President Vladmir Putin’s youth organization, Nashi, had moved to San Francisco and remade herself as an expert in media relations. But what really set her apart were her purported connections to powerful financial backers abroad.

In fundraising pitches under her maiden name, Masha Drokova, she touted her ties to wealthy Russians, including billionaires Alexander Mamut, whom she listed as an investor in a Day One fund, and a Russian conglomerate owned by Vladimir Yevtushenkov, according to documents obtained by The Washington Post.

The U.S. Treasury Department<a href="https://www.clearytradewatch.com/wp-content/uploads/sites/410/2018/01/US-Treasury-CAATSA-241-Report-Unclassified-January-29-2018.pdf" target=_blank> listed </a>both men as oligarchs in a <a href="https://www.clearytradewatch.com/wp-content/uploads/sites/410/2018/01/US-Treasury-CAATSA-241-Report-Unclassified-January-29-2018.pdf" target=_blank>2018 response</a> to a law directing it to name all in that class. Officials said then they simply picked those worth more than $1 billion, without accusing them of wrongdoing or imposing sanctions.

The West has imposed a barrage of sanctions on top Russian figures. See how they’re connected to Putin.

But Bucher’s investment claims, contained in an email and a PowerPoint presentation from 2017, show how quickly events in Ukraine have changed how Silicon Valley looks at the role of Russian money in its start-up culture.

Bucher, 32, now says that she did not write the email identifying Mamut and other wealthy Russians as investors and that it must have been fabricated. She says she has long avoided Russian funding.

“It is toxic money since 2014, after Crimea,” she said in one of a series of interviews with The Post last month, referencing Russia’s 2014 invasion of the Ukrainian territory. “I would not have been able to open a bank account, if any of these people were on board.”

This week, she issued a statement to The Post through her lawyers with a clear denunciation of Putin.

“The last month has made me realize the importance of denouncing oppressive regimes, despite the ramifications,” the statement said. “So let me be clear: I deeply regret ever joining Nashi and supporting Putin and his government. Since 2009, I have disconnected from Russian politics and politicians and have quietly supported individuals and organizations that oppose Putin’s regime. I have cut ties with Russian businesses and have been incredibly intentional about who I will and will not do business with.”

Interviews in Silicon Valley show that in the wake of Russia’s invasion of Ukraine, Russian connections are getting more scrutiny from U.S. investigators, who are examining whether any of the deals pose national security risks. Some entrepreneurs and investors are worried their sources of capital may be tainted. Others are afraid that any involvement with wealthy Russians might unfairly stigmatize their firms or start-ups, in the same way that Chinese Americans faced <a href="https://www.washingtonpost.com/history/2021/03/18/history-anti-asian-violence-racism/" target=_blank>discrimination</a> and suspicions as tensions grew between China and the United States.

Mikhail Svetlov

An earlier Russian emigre, Yuri Milner, has acknowledged taking money from a government-controlled bank when he invested hundreds of millions of dollars in Facebook and Twitter more than a decade ago. But a spokesperson said that Milner hasn’t taken any money from Russian investors since 2011 and that he repaid an investment from the government-controlled VTB Bank in 2014, the year the bank was first sanctioned by the United States.

Milner, whose net worth is estimated at $4 billion, and his wife, Julia, recently donated $2 million to a Ukrainian <a href="https://www.washingtonpost.com/world/2022/03/05/mila-kunis-ashton-kutcher-ukraine-refugee-fundraiser/" target=_blank>charity effort</a> coordinated by actors Ashton Kutcher and Mila Kunis. His company, DST Global, donated another $3.5 million.

Another prominent Silicon Valley investor, American Esther Dyson, resigned from the board of Russia’s top search engine, Yandex, on March 7, 11 days into the Ukraine invasion.

Y Combinator, a major Silicon Valley start-up incubator, put out a notice this week requiring all potential investors to confirm that they are not a target of U.S. sanctions and that all “direct or indirect” investment partners are also not targets of U.S. sanctions. The group said it was tightening its standards in light of Russia’s invasion.

Tech was creating a new economy in Eastern Europe. Then came the war in Ukraine.

Other venture capitalists who once bragged of their access to Russian money and engineering talent have split off from their longtime partners out of personal beliefs or to avoid questions from entrepreneurs, lawyers and banks.

“People are scared,” said Pavel Cherkashin, a venture capitalist who in 2021 left a firm that had raised most of its money from Russian investors, including a Swiss firm he said was affiliated with the children of Suleyman Kerimov, a billionaire sanctioned by the United States in 2018 for being an official in the <a href="https://home.treasury.gov/news/press-releases/sm0338" target=_blank>Russian Federation Council.</a>

Cherkashin said that all the people funded by his new firm, Mindrock Capital, ask where the money is coming from and that all the Russian investors are screened by lawyers. “We have no oligarchs, no family offices, no corporate investors — only individual investors who came through a recommendation,” he said.

It is not always clear which investors have meaningful connections to sanctioned Russians, and with more sanctions expected, someone acceptable now might not be in a few months.

Nick Davidov, a longtime venture capitalist in the United States, said he split with his partner at Gagarin Capital not because of risky investors, but because the partner wanted to stay in Russia and keep investing there. The former partner said the split was for other reasons and that few of the firm’s investments were in Russian companies.

Davidov’s new firm with his wife, Davidovs Venture Capital, doesn’t invest in companies with a presence in Russia, and it asks every company it backs to sign a side letter stating it will not establish one, he said.

“We can’t believe there can be any justification for a military invasion and strongly condemn Putin’s actions,” the new firm says on <a href="https://davidovs.com/" target=_blank>its website</a>.

Undisclosed sources of investment are common in Silicon Valley, because venture capital firms and start-ups are not required to declare their backers. That murkiness also means many firms fear being unfairly tarred for having taken international funding or specialized in companies with Russian founders or technical talent, which are abundant.

Legal experts expect the federal government to escalate its scrutiny of Russian money flowing into Silicon Valley, probably through a national security panel called the Committee on Foreign Investment in the United States (CFIUS), which has gained new powers and resources to examine the foreign money flowing into sensitive technologies such as artificial intelligence, quantum computing and cybersecurity.

“You might say Congress put CFIUS on steroids,” said David R. Hanke, a lawyer at Arent Fox Schiff who previously served as a congressional staffer focused on CFIUS reform.

To date, these new powers have been <a href="https://www.washingtonpost.com/technology/2020/09/29/cfius-review-past-chinese-investment/" target=_blank>directed</a> primarily at Chinese investment, but experts say they could now be used to help the federal government more closely review Russian investment — even deals made indirectly through wealthy investors or individuals without clear ties to the state. When officials during the Trump administration began to more aggressively accuse China of stealing U.S. technology, venture capitalists and start-ups pulled away from Chinese cash.

The Treasury Department declined to comment on matters involving CFIUS.

“I’m quite confident that, as part of the administration’s crackdown on Russia economically, CFIUS has been told to look hard at any Russian deals on their radar screen, and look harder for deals that they might not yet be aware of,” Hanke said.

Unlike Chinese companies, entrepreneurs and investors, which had a long history of doing business with Silicon Valley, Russian involvement in high-tech ventures has been viewed skeptically by investors and companies alike, particularly when the technologies had national security implications.

For that reason, Russian investments make up a significantly smaller slice of the foreign money flowing into Silicon Valley than Chinese funds, said Mike Brown, the head of the Pentagon’s Defense Innovation Unit (DIU), a division that invests in technology companies whose products may be useful to the military.

“The Russian economy being so much smaller, they have not been nearly as active as China has been,” Brown added.

The opacity of Russian money in Silicon Valley has made it harder for start-up founders, venture capitalists and even federal officials to determine the penetration by the Kremlin and its allies into the American start-up ecosystem. Unlike Saudi Arabia, which <a href="https://www.washingtonpost.com/technology/2018/10/23/silicon-valley-struggles-voice-its-concerns-over-khashoggi-killing-amid-vast-saudi-money-influence/" target="_blank">invests</a> through prominent state-backed funds, there are only a handful of venture capital funds with overt ties to Russia.

Instead, money is more likely to flow indirectly into companies or funds that then invest in venture capital firms, said Jim Lewis, director at the strategic technologies program at the <a href="https://www.csis.org/" target=_blank>Center for Strategic and International Studies</a>, a think tank. That makes it difficult for companies to know if they are getting funding from Russian oligarchs or Russian government sources.

The search for oligarchs’ wealth in U.S. is hindered by investment loopholes

In interviews with The Post, three partners at leading venture capital firms couldn’t say whether their funds included money from Russia. Even though they were aware of no direct investment from Russian oligarchs, they couldn’t rule out the possibility that Russian investors had directed money into funds that invest in their firms. The three spoke on the condition of anonymity to discuss a sensitive topic.

“The fact that tracks are hidden with the money makes it more difficult to track,” Lewis said. “They’re going to have to spend a bit more time peeling back the layers of where the money comes from.”

Some Russian investments have raised red flags in the Valley before, particularly around technologies with national security implications, according to officials and investors who spoke on the condition of anonymity. In some cases, venture capital firms have taken extra steps to vet sensitive technology deals that include Russian investors, the officials and investors said.

Some companies with known Russian ties have taken steps to de-emphasize those links. The website of<a href="https://www.redline-capital.com/" target=_blank> Redline Capital Management</a>, a London-based venture capital firm, previously noted that its “funds originate from Mr. Vladimir Evtushenkov,” an alternate spelling for Yevtushenkov, the billionaire founder of Russian telecom and media conglomerate Sistema.

Evgeny Biyatov

After the Ukraine invasion, Redline removed the “team” page of its website, including the photo and bio of Yevtushenkov’s daughter, <a href="https://www.linkedin.com/in/tatiana-evtushenkova-49408a94/" target=_blank>Tatiana</a>, who is the firm’s CEO and managing partner, according to past versions of the page saved by the Internet Archive. Tatiana Evtushenkova is a former adviser to Russia’s state-owned bank, Sberbank. She and another manager at Redline did not respond to a request for comment.

In recent weeks, some companies also have learned that relying on Russian money can have perilous consequences.

Buyk, a New York City grocery delivery start-up backed by venture capital firms with Russian ties, closed its doors last month, terminating hundreds of employees and contractors and cratering a business that had raised tens of millions of dollars to expand its 15-minute delivery app to cities across the United States.

In a March 17 filing for bankruptcy reorganization, Buyk said the war in Ukraine confronted the firm with “an existential and, ultimately, fatal crisis” because it had been relying on cash infusions from its Russia-based founders. Putin’s restrictions on money transfers out of Russia made it impossible for the founders to keep sending those funds, the filing said. The company said U.S. sanctions didn’t impact Buyk’s access to capital.

Before Buyk went bankrupt, a company that it recently approached about a deal rebuffed the Russian-backed start-up, in part because of concerns about possible ties to Putin’s government, according to a person briefed on the discussions who spoke on the condition of anonymity because the matter was confidential.

James Walker, a former fast food executive who became Buyk’s chief executive in November, said the company failed to raise substantial new capital from U.S. investors before running out of cash. One of Buyk’s backers, Fort Ross Ventures, has taken funding from Sberbank, which has been <a href="https://home.treasury.gov/news/press-releases/jy0608" target=_blank>sanctioned</a> by the United States since the first week of the invasion. “We are taking all necessary measures to isolate and stop any relationship with any sanctioned investor if this is mandated by regulation,” Victor Orlovski, managing partner at Fort Ross, said in an email.

Putin’s prewar moves against U.S. tech giants laid groundwork for crackdown on free expression

Though Bucher has a relatively small fund in Silicon Valley terms, her case may be the most notable example of how the Ukrainian conflict has colored thoughts about Russian money.

When she arrived in Silicon Valley, she was well-known in Russia, where as a teen she joined the group Nashi, meaning “ours,” a fervently patriotic, Kremlin-funded Russian youth group, and starred in the 2012 documentary “Putin’s Kiss,” which showed her role in the group and, in one scene, portrays her kissing her beloved national leader. She became the group’s spokesperson, hosting a pro-Kremlin show online and learning about the media during the experience. When she departed the group, she told others she was leaving politics for a career in public relations.

An early and important customer for Bucher was Serguei Beloussov, a Soviet-born technology entrepreneur who had moved abroad and founded an electronic storage and security company, Acronis, and a venture capital firm, Runa Capital. Beloussov later became a citizen of Singapore and last year changed his name to Serg Bell.

Bucher worked at Runa and then moved to the United States to help Beloussov pursue new technology projects. She first came on a visa backed by the Russia-friendly investor Dyson. Michael McFaul, the former U.S. ambassador to Russia, endorsed her admission to the United States in a letter to the U.S. Citizenship and Immigration Service in May 2015, calling her departure from Nashi “brave.”

In an email this week, McFaul said while he hadn’t followed her career in the United States, her “defection from Nashi, which was when I was serving in Moscow, generated attention — good attention in my view — about the Kremlin’s role in sponsoring Nashi.”

“I liked her and thought she deserved a chance to live in the U.S.,” Dyson told The Post.

Bucher leveraged her media skills and network into her own venture company, Day One. In seeking limited partner investors in Day One funds, she told one target that others investing included Mamut through his firm, according to a pitch document from Bucher obtained by The Post. The billionaire and former Kremlin adviser had recently taken control of blogging platform LiveJournal. Another person Bucher listed as an investor in the same fundraising email told The Post that he was pitched by Bucher but never actually invested.

She emailed a slide deck presentation to another possible limited partner that included claims she had led media efforts for science education start-up MEL Science and “made 10+ introductions to investors that helped to close $2.5 million round led by Sistema Venture Capital,” owned by a Yevtushenkov company that has the biggest stake in Russia’s largest mobile telecom carrier.

She said in a 2019 <a href="https://medium.com/authority-magazine/women-leading-the-finance-industry-setting-yearly-goals-for-the-number-of-women-promoted-into-cf6109a0a076" target="_blank">magazine interview</a> that Day One’s first investor was Dmitry Eremeev, a Russian entrepreneur who oversees FIX, a holding company, and Bank 131, an online banking start-up. Both are based in Kazan, Russia, according to their websites.

Mamut could not be reached for comment. Yevtushenkov’s principal company did not respond to questions. Eremeev did not respond to a request for comment; Bucher told The Post he had Maltese citizenship.

Day One’s portfolio companies include search engines DuckDuckGo and <a href="http://you.com/" target=_blank>You.com</a>, as well as Worldcoin, which gives people its new cryptocurrency token in exchange for scanning their retinas.

Lee Jia Wen

Bucher told The Post she could not take Russian money in part because it would offend critical early backer Beloussov. But the investor said he had no problem with Day One taking money from independent Russians, as his Runa did. He told The Post that “less than 15 percent, maybe 10 percent” of Day One’s money came from that country, referring questions to Bucher for precision.

Bucher told The Post the correct number is zero.

“I haven’t taken any money from Russia. I simply don’t know anyone,” she said.

Menn and Dwoskin reported from San Francisco, MacMillan and Zakrzewski from Washington.

An earlier version of this story incorrectly said that Yuri Milner had acknowledged taking Russian government money when he invested in Facebook and Twitter. He acknowledged taking money from a government-controlled bank. This version has been corrected. The story has also been updated to include a response from Nick Davidov's former partner about the reason for their split. 

Top 10 nonfiction books of 2019, Hudson Booksellers

Top 10 nonfiction books of 2010, Hudson Booksellers

Book of the year finalist in 2003, Investigative Reporters & Editors 

Best in Business awards in 2017 and other years, Society for Advancing Business Editing and Writing

Gerald Loeb Awards finalist in 2017 and other years

Cult of the Dead Cow: How the Original Hacking Supergroup Might Just Save the World

Fatal System Error: The Hunt for the New Crime Lords who are Bringing Down the Internet

All the Rave: The Rise and Fall of Shawn Fanning's Napster

Harvard College, A.B. in English

Joseph Menn joined The Post in 2022 after two decades covering technology for Reuters, the Financial Times and the Los Angeles Times. His books include "Cult of the Dead Cow: How the Original Hacking Supergroup Might Just Save the World" (2019) and "Fatal System Error: The Hunt for the New Crime Lords who are Bringing Down the Internet" (2010). 

Joseph Menn

Winner of the 2017 Overseas Press Club Bob Considine Award for "Behind the Firewall" Series on Silicon Valley China

 2010 Finalist, Livingston Award for Young Journalists

 2009 Finalist, Livingston Award for Young Journalists 

Columbia University, BA. 

Columbia Graduate School of Journalism, MS.

Lizza joined The Washington Post as Silicon Valley correspondent in 2016, becoming the paper's eyes and ears in the region. She focuses on social media and the power of the tech industry in a democratic society. Before that, she was the Wall Street Journal's first full-time beat reporter covering AI and the impact of algorithms on people's lives. 

Elizabeth Dwoskin

Knight-Bagehot Fellow for Business Journalism at Columbia University, 2016-2017

Gerald Loeb Award for Breaking News, 2019

Vanderbilt University, BA in English 

Columbia University, MA in journalism

Doug MacMillan is a corporate accountability reporter for The Washington Post. He previously covered technology for the Wall Street Journal, Bloomberg News and Businessweek.

Douglas MacMillan

Northwestern University, BS in journalism

Cat Zakrzewski is a national technology policy reporter, tracking global efforts to regulate the tech industry. She focuses on AI policy and the battles over free speech online.