Two months ago, Silicon Valley could not have been more agog about Matt Mahan, the moderate Democrat who had just entered the California governor’s race as a Silicon Valley ally opposed to a billionaires’ tax.
Those billionaires saw Mr. Mahan, the mayor of San Jose, Calif., and a former start-up executive, as something of a golden child with a solid path to the governorship — if only Silicon Valley ponied up.
Mr. Mahan quickly raised millions, including contributions from Sergey Brin, the Google co-founder. But he has struggled to gain traction among voters. Now, with the June primary fast approaching, Mr. Mahan’s supporters have concocted a rather unusual campaign-finance strategy.
The pitch: Help us raise $35 million by April 17, and you’ll get your money back if we fall short.
The approach relies on an “escrow” account and is being described as an “all or nothing” effort, according to donor communications and pitch documents reviewed by The New York Times and confirmed by three people close to the campaign.
The conditional ask may sway donors who want greater assurances that they are contributing toward a candidate with momentum. And if it fails, it could signal that Silicon Valley has lost confidence in his ability to win.
The novel structure also reflects the sense of desperation around the once promising candidate: It amounts to a belief that $35 million is needed to make Mr. Mahan competitive — and that any lesser amount would not change his trajectory.
The campaign is organized by David Crane, an influential California political fixer whose advocacy group, Govern for California, is popular among tech executives. Mr. Crane has told people in recent days that the group’s “escrow” account has $13.5 million so far with $5 million more in the pipeline, according to communications The Times reviewed. Donors pitching it include Michael Moritz, a billionaire venture capitalist and one of Mr. Mahan’s biggest supporters, and Blake Byers, a tech executive and investor.
“We believe this is the amount that can secure the win for Matt and we believe this fundraise is mission-critical,” Noelle Moseley, a supporter of Mr. Mahan, wrote of the $35 million target in an email sent Monday to potential donors. Mr. Byers and Mr. Moritz co-signed the message, which The Times reviewed.
Ms. Moseley called it an “all-or-nothing fundraise” and noted the group was over halfway to the goal.
Part of the appeal, according to the communications and documents, is the lack of disclosure. In California, large donations before an election must be reported within 24 hours. But Mr. Crane and his aides have told potential contributors that their donations to support Mr. Mahan would be publicly reported only if the target is hit and the money is released to Back to Basics, a pro-Mahan outside group.
If it isn’t, the donations and refunds would be recorded on a report filed in July by Govern for California — but with no tie to Mr. Mahan.
Jessica Levinson, an expert on California campaign finance, said it was a “creative” approach that could “function as a cloaking device” for donors.
“I have not heard of this type of setup before,” she said. “It’s an ice cube until you hit a certain boiling point — and then it’s water.”
Mr. Crane did not return requests for comment Tuesday.
Despite his Silicon Valley backing, Mr. Mahan has trailed several other Democrats in polls, including Representative Eric Swalwell, former Representative Katie Porter and Tom Steyer, a billionaire and former presidential candidate who has now donated $112 million to his own campaign. It is extremely expensive to break through as a candidate in the nation’s most populous state.
Tasha Dean, a Mahan campaign spokeswoman, acknowledged the mayor “isn’t a household name” but said he’d emerge as the campaign intensified.
Silicon Valley billionaires had gravitated to Mr. Mahan’s campaign in part because of his distance from the state’s powerful labor unions and his moderate positions on issues like housing. He was a classmate of Mark Zuckerberg’s at Harvard, and he rose in Silicon Valley alongside many of his contemporaries from the Facebook era who amassed enormous power and wealth in the start-up ecosystem.
Some prominent tech leaders were quick to endorse Mr. Mahan. But his campaign has encountered turbulence, splitting with his top consultant last week.
Significant tensions have at times flared between Mr. Mahan’s inner circle and those Silicon Valley donors in group chats and conference calls in recent weeks, according to eight people with knowledge of the dynamic and donor presentations The Times reviewed.
Some of Mr. Mahan’s aides and friends have been frustrated that those donors have given much less than initially anticipated, the people said. Mr. Mahan’s campaign has raised about $12 million, and his independent groups have together raised just under $15 million.
And yet in turn, some of Mr. Mahan’s donors have felt impatient and want to see better polling before donating more money, the people said.
That dynamic came to a head late last month, when, on two separate calls, several potential big Mahan donors voiced skepticism about his tactics and those of his outside group, the people said, and pushed for a more aggressive strategy.
Laurel Rosenhall contributed reporting from Sacramento.
Theodore Schleifer is a Times reporter covering billionaires and their impact on the world.
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