The amount is tiny by industry standards, but it is significant to Hamilton's year-old seed fund, which has about $US5 million in commitments, according to a report by Inc.

The stymied deal reflects the growing divisiveness in the run-up to the US presidential election, which is spilling into everyday business. Hamilton took to Twitter to air her political protest.

"Because of my Peter Thiel stance, my company just lost half a million $US in new funding," Hamilton wrote on Twitter. "Couldn't have Thiel money flowing through our company. Hard problem. Easy decision."

Thiel has become one of the Valley's most controversial figures this year after backing the Republican presidential nominee. He has steadily increased his support for Trump since May, when he signed on as a delegate.

Thiel endorsed Trump at the Republican National Convention, is making a campaign donation of $US1.25 million and will give a speech in Washington on October 31 to address the election. A spokesman for Thiel didn't respond to a request for comment.

Thiel's political views put him in the minority among tech leaders and venture investors. A letter signed by more than 100 tech professionals called a Trump presidency a "disaster for innovation".

Ryan Petersen, CEO of freight software provider Flexport, said at a conference in June that he would have "probably not" taken cash from Thiel's Founders Fund if he knew of the investor's political affiliation at the time.

Bloomberg Beta, the venture capital arm of Bloomberg LP, is also an investor in Flexport.


As Thiel remains steadfast in his support for Trump even as the candidate drops in the polls, the VC has become a target of scorn from many of his tech peers.

Ellen Pao, a former Kleiner Perkins Caufield & Byers partner, said her diversity group Project Include would sever all ties with tech incubator Y Combinator because Thiel is a part-time partner there.

Y Combinator President Sam Altman said although he disagrees with Thiel and will vote for Hillary Clinton, he stands by Thiel's right to hold opposing political views.

Silicon Valley has disavowed Trump for his comments about women and his stance on immigration, two hot-button issues in the tech industry.

Hamilton's Backstage Capital invests in entrepreneurs who are underrepresented in the Valley, including women, minorities and lesbian, gay, bisexual and transgender people. The firm has backed 20 start-ups, including makers of background noise reduction software and wearable tech jewellery, Hamilton said.

Backstage Capital's investors include Marc Andreessen, Swati Mylavarapu of Kleiner Perkins, Chris Sacca of Lowercase Capital and his wife Crystal English, David Rose of Rose Tech Ventures and Box Inc chief executive officer Aaron Levie, Hamilton said.

Bloomberg