Trump Jr.’s 1789 Capital Cashes In on Proximity to Power
Donald Trump Jr.’s venture capital firm, 1789 Capital, has grown from managing a few hundred million dollars to overseeing more than $3 billion in assets, as ethics experts and government watchdogs raise alarms about what they describe as an unprecedented conflict of interest involving the president’s adult son. The firm’s portfolio companies have secured over $1.6 billion in federal contracts during the first 500 days of the second Trump administration, according to CNN, intensifying scrutiny of the ethical lines surrounding family members of a sitting president.
Background: What Is 1789 Capital?
Founded on October 3, 2022, by Omeed Malik, Rebekah Mercer, and Chris Buskirk, 1789 Capital is a Palm Beach, Florida-based venture capital firm that promotes what it calls “patriotic capitalism” — investing in companies aligned with conservative values and “America First” principles. The firm’s name references the year the U.S. Bill of Rights was adopted. As Wikipedia notes, the firm emerged from the Rockbridge Network, a conservative donor network, and was designed to create a “parallel economy” combining businesses, media outlets, and political organizations associated with the America First movement.
Donald Trump Jr. joined the firm as a partner shortly after his father’s re-election in November 2024, opting for the private sector over a government role. The firm’s early backers included prominent conservative figures such as Marc Andreessen, Charlie Kirk, and Clay Travis, with Peter Thiel playing an instrumental role in its creation.
Explosive Growth and Federal Contracts
The financial trajectory of 1789 Capital has been remarkable. According to a May 2026 report by the Financial Times, the firm’s assets under management grew from approximately $200 million to $3.5 billion over the course of roughly one year — a 17-fold increase. By September 2025, the firm reported $861 million in assets, a figure that has since multiplied several times over.
More striking than the asset growth is the flow of federal dollars to companies in which 1789 Capital has invested. A CNN analysis found that 10 defense, space, and software companies backed by the firm received over $1.6 billion in federal contracts and grants within the first 500 days of the Trump administration — a 79 percent increase compared to the same period at the end of President Joe Biden’s term. The Independent reported that critics described the rate at which the firm has benefited from its proximity to the White House as “unprecedented.”
The Vulcan Elements Case
Perhaps the most scrutinized investment involves Vulcan Elements, a rare-earth magnet startup with just 30 employees. In August 2025, 1789 Capital invested in the company at a $200 million valuation. Three months later, the Pentagon awarded Vulcan Elements a $620 million loan — the largest ever from the Office of Strategic Capital — along with $50 million in CHIPS Act incentives. Bloomberg reported in March 2026 that the company’s valuation could reach $2 billion.
Trump Jr. told The New York Times that he has never met or spoken to anyone at Vulcan Elements, and Malik said he learned about the loan from a news release. “It’s not like it takes a genius to figure this out,” Trump Jr. said of the investment’s obvious appeal to the administration. The timing of the investment and subsequent federal loan has become a focus of an ongoing inquiry by Democrats in Congress.
The Polymarket Connection
Another case raising eyebrows involves Polymarket, a cryptocurrency prediction market platform. 1789 Capital invested in Polymarket at a $300 million valuation, and Trump Jr. joined the company’s advisory board. Shortly thereafter, the Commodity Futures Trading Commission (CFTC) dropped its investigation into Polymarket and reversed a Biden-era ban on the platform’s U.S. operations. Polymarket’s valuation has since soared to $15 billion.
Critics point to the sequence of events as a clear example of regulatory relief following political connections. Better Markets president Dennis Kelleher questioned the circumstances, noting that the FBI had raided Polymarket’s CEO’s home under the previous administration, only for both the CFTC and Department of Justice to close their investigations after the change in administration.
Ethical Concerns and Expert Reactions
Because Donald Trump Jr. holds no official government position, he is not subject to federal ethics rules that apply to executive branch employees. Ethics experts argue this creates a significant loophole.
“There is no modern or historical comparison for what Don Jr. and the President are doing,” said Donald Sherman, executive vice president and chief counsel at Citizens for Responsibility and Ethics in Washington (CREW). “The rules themselves aren’t designed, unfortunately, to force the adult children of government officials to report their financial entanglements.”
Angela Lee, a venture capital professor at Columbia Business School, offered a blunter assessment: “People are paying for proximity to power.”
Dylan Hedtler-Gaudette of the Project on Government Oversight (POGO) highlighted the taxpayer impact: “There’s money from my paycheck and your paycheck that is being taken out in the form of taxes and is going directly into the pocketbooks of these companies and by extension to the Trump family.”
The Defense
The White House and 1789 Capital have pushed back against accusations of impropriety. White House spokesperson Anna Kelly stated: “President Trump only acts in the best interests of the American public — which is why they overwhelmingly re-elected him to this office, despite years of lies and false accusations against him and his businesses from the fake news media. There are no conflicts of interest.”
Trump Jr. maintains that he speaks to his father only “every few weeks” and that they never discuss business. Malik said he has never “set foot in the White House.” A spokesman for 1789 Capital told The New York Times that the firm “maximizes transparency and compliance, even though no one at the fund has ever worked in government.”
What’s Next
The controversy shows no signs of abating. Democratic lawmakers on the House Natural Resources Committee have pursued subpoena efforts related to the firm’s investments. Questions remain about whether existing ethics laws could be applied or challenged, and whether Congress will move to close what critics call the “adult children of presidents” loophole.
As 1789 Capital continues to raise new funds — including a reported $1 billion real estate fund for properties in South Florida — and as its portfolio companies pursue additional federal contracts, the debate over the ethical boundaries of presidential family members engaging in business is likely to intensify. The fundamental question remains: In an era of unprecedented wealth at the intersection of politics and private equity, where should the line be drawn?