SUNDAY, APRIL 3 , 2022. THE WASHINGTON POST EZ EE G5
LEE JIA WEN/ASSOCIATED PRESS
Serguei Beloussov, a Russian technology entrepreneur seen in
2018, was an early and important customer for Bucher.EVGENY BIYATOV/SPUTNIK/ASSOCIATED PRESS
V ladimir Yevtushenkov, the billionaire founder and chairman of
Russian telecom and media conglomerate Sistema, in 2019.MIKHAIL SVETLOV/GETTY IMAGESAlexander Mamut, a wealthy Russian touted in fundraising pitches
under Bucher’s maiden name, in 2019. S he denies writing them.
scene, portrays her kissing her
beloved national leader. She be-
came the group’s spokesperson,
hosting a pro-Kremlin show on-
line and learning about the me-
dia 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 cus-
tomer for Bucher was Serguei
Beloussov, a Soviet-born technol-
ogy entrepreneur who had
moved abroad and founded an
electronic storage and security
company, Acronis, and a venture
capital firm, Runa Capital. Be-
loussov 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 l ast week, McFaul
said that while he hadn’t fol-
lowed 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 spon-
soring 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 in-
cluded Mamut through his firm,
according to a pitch document
from Bucher obtained by The
Post. The billionaire and former
Kremlin adviser had recently tak-
en control of blogging platform
LiveJournal. Another person Bu-
cher listed as an investor in the
same fundraising email told The
Post that he was pitched by Buch-
er but never actually invested.
She emailed a slide deck pre-
sentation 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 Yevtushenk-
ov company that has the biggest
stake in Russia’s largest mobile
telecom carrier.
She said in a 2019 magazine
interview that Day One’s first
investor was Dmitry Eremeev, a
Russian entrepreneur who over-
sees FIX, a holding company, and
Bank 131, an online banking
start-up. Both are based in Ka-
zan, Russia, according to their
websites.
Mamut could not be reached
for comment. Yevtushenkov’s
principal company did not re-
spond 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 Duck-
DuckGo and You.com, as well as
Worldcoin, which gives people its
new cryptocurrency token in ex-
change for scanning their reti-
nas.
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 preci-
sion.
Bucher told The Post the cor-
rect 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.owned bank, Sberbank. She and
another manager at Redline did
not respond to a request for
comment.
In recent weeks, some compa-
nies also have learned that rely-
ing on Russian money can have
perilous consequences.
Buyk, a New York City grocery
delivery start-up backed by ven-
ture capital firms with Russian
ties, closed its doors last month,
terminating hundreds of employ-
ees 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 bank-
ruptcy reorganization, Buyk said
the war in Ukraine confronted
the firm with “an existential and,
ultimately, fatal crisis” because it
had been relying on cash infu-
sions from its Russia-based
founders. Putin’s restrictions on
money transfers out of Russia
made it impossible for the found-
ers to keep sending those funds,
the filing said. The company said
U.S. sanctions did not impact
Buyk’s access to capital.
Before Buyk went bankrupt, a
company that it recently ap-
proached about a deal rebuffed
the Russian-backed start-up, in
part because of concerns about
possible ties to Putin’s govern-
ment, according to a person
briefed on the discussions who
spoke on the condition of ano-
nymity because the matter was
confidential.
James Walker, a former fast
food executive who became
Buyk’s chief executive in Novem-
ber, said the company failed to
raise substantial new capital
from U.S. investors before run-
ning out of cash. One of Buyk’s
backers, Fort Ross Ventures, has
taken funding from Sberbank,
which has been sanctioned 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.
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 oneture capital firms, said Jim Lewis,
director at the strategic technol-
ogies program at the Center for
Strategic and International Stud-
ies, a think tank. That makes it
difficult for companies to know if
they are getting funding from
Russian oligarchs or Russian gov-
ernment sources.
In interviews with The Post,
three partners at leading venture
capital firms couldn’t say wheth-
er their funds included money
from Russia. Even though they
were aware of no direct invest-
ment from Russian oligarchs,
they couldn’t rule out the possi-
bility that Russian investors had
directed money into funds that
invest in their firms. The three
spoke on the condition of ano-
nymity to discuss a sensitive top-
ic.
“The fact that tracks are hid-
den 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 Silicon
Valley before, particularly
around technologies with nation-
al security implications, accord-
ing to officials and investors who
spoke on the condition of ano-
nymity. In some cases, venture
capital firms have taken extra
steps to vet sensitive technology
deals that include Russian inves-
tors, the officials and investors
said.
Some companies with known
Russian ties have taken steps to
de-emphasize those links. The
website of Redline Capital Man-
agement, a London-based ven-
ture capital firm, previously not-
ed that its “funds originate from
Mr. Vladimir Evtushenkov,” an
alternate spelling for Yevtushen-
kov, the billionaire founder of
Russian telecom and media con-
glomerate Sistema.
After the Ukraine invasion,
Redline removed the “team” page
of its website, including the pho-
to and bio of Yevtushenkov’s
daughter, Tatiana, who is the
firm’s CEO and managing part-
ner, according to past versions of
the page saved by the Internet
Archive. Tatiana Evtushenkova is
a former adviser to Russia’s state-they could now be used to help
the federal government more
closely review Russian invest-
ment — even deals made indi-
rectly through wealthy investors
or individuals without clear ties
to the state. When officials dur-
ing the Trump administration
began to more aggressively ac-
cuse China of stealing U.S. tech-
nology, venture capitalists and
start-ups pulled away from Chi-
nese cash.
The Treasury Department de-
clined to comment on matters
involving CFIUS.
“I’m quite confident that, as
part of the administration’s
crackdown on Russia economi-
cally, CFIUS has been told to look
hard at any Russian deals on
their radar screen, and look hard-
er for deals that they might not
yet be aware of,” Hanke said.
Unlike Chinese companies, en-
trepreneurs and investors, which
had a long history of doing busi-
ness with Silicon Valley, Russian
involvement in high-tech ven-
tures has been viewed skepticallyby investors and companies alike,
particularly when the technol-
ogies had national security impli-
cations.
For that reason, Russian in-
vestments make up a significant-
ly smaller slice of the foreign
money flowing into Silicon Valley
than Chinese funds, said Mike
Brown, the head of the Penta-
gon’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, ven-
ture capitalists and even federal
officials to determine the pene-
tration by the Kremlin and its
allies into the American start-up
ecosystem. Unlike Saudi Arabia,
which invests through promi-
nent 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 ven-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 Russian
Federation Council.
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 indi-
vidual investors who came
through a recommendation,” he
said.
It is not always clear which
investors have meaningful con-
nections to sanctioned Russians,
and with more sanctions expect-
ed, someone acceptable now
might not be in a few months.
Nick Davidov, a longtime ven-
ture 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.
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 its website.
Undisclosed sources of invest-
ment are common in Silicon Val-
ley, because venture capital firms
and start-ups are not required to
declare their backers. That murk-
iness 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 feder-
al government to escalate its
scrutiny of Russian money flow-
ing 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 directed primarily at Chi-
nese investment, but experts say$1 billion, without accusing them
of wrongdoing or imposing sanc-
tions.
But Bucher’s investment
claims, contained in an email and
a PowerPoint presentation from
2017, show how quickly events in
Ukraine have changed how Sili-
con Valley looks at the role of
Russian money in its start-up
culture.
Bucher, 32, now says she did
not write the email identifying
Mamut and other wealthy Rus-
sians as investors and that it
must have been fabricated. She
says she has long avoided Rus-
sian 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.”
L ast week, she issued a state-
ment to The Post through her
lawyers with a clear denuncia-
tion of Putin.
“The last month has made me
realize the importance of de-
nouncing oppressive regimes, de-
spite the ramifications,” the state-
ment 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 poli-
tics 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 con-
nections are getting more scruti-
ny from U.S. investigators, who
are examining whether any of the
deals pose national security risks.
Some entrepreneurs and inves-
tors 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 discrimination
and suspicions as tensions grew
between China and the United
States.
An earlier Russian emigre, Yuri
Milner, has acknowledged taking
Russian government money
when he invested hundreds
of millions of dollars in Facebook
and Twitter more than a decade
ago. But a spokesperson said
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 charity
effort coordinated by actors Ash-
ton 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 l ast 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.
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
MASHA FROM G1
U.S. start-ups distance themselves from Russian investors
2016 PHOTO BY NICK OTTO
Masha Bucher, once a teen leader of Russian President Vladmir Putin’s youth organization, Nashi, remade herself in the U.S. as a media
relations expert with ties to powerful financial backers abroad. She has since denounced oppressive regimes and regrets joining Nashi.“I have cut ties with Russian businesses and have
been incredibly intentional about who I will and
will not do business with.”
Masha Bucher, founder of Day One Ventures