California, once the deep-blue jewel in the Democratic crown, is turning purple.
Almost 40 percent of Californians voted for Donald Trump in the 2024 presidential election.
It’s a fact that stings Ethan Agarwal, a tech entrepreneur and self-proclaimed Clinton Democrat, but it is also the foundation for his campaign to replace Gavin Newsom.
‘The Democrats nationally feel alienated by the direction of the Democratic Party,’ Agarwal says.
He highlights the obsession with progressive policies like transgender rights and argues that the number one priority should be the economy.
The Silicon Valley venture capitalist calls himself a ‘lost Democrat’ and believes that there are legions of California voters who see the likes of Bernie Sanders and Alexandria Ocasio-Cortez and think: that’s not my party.
He has raised over $100 million across multiple start-ups, including an audio fitness app and a fintech platform.
Now he plans to raise $30 million ahead of the June primary – in a crowded field where he remains a rank outsider.
President Donald Trump followed by First Lady Melania Trump, shakes hands with California Governor Gavin Newsom upon arrival at Los Angeles International Airport, California, on January 24, 2025, to visit the region devastated by the Palisades and Eaton fires
Among his greatest attributes, he says, is a Canadian passport and a background free from the national political ties that are hamstringing California.
‘I wasn’t born in America. I was born in Canada. So I can’t run for president,’ he says.
Agarwal is no fan of Newsom, who he says has used the governorship as a pulpit from which to launch a presidential bid.
‘Newsom has wanted to run for president his whole life. And the easiest way to not piss people off is to not actually do anything,’ he says, arguing that ‘big swings’ are needed ‘in order to fix this place.’
Agarwal, 40, is a Wharton finance graduate who cut his teeth at Lehman Brothers and understands the economy perhaps more than some of his rivals.
Ethan Agarwal, 40, is running for California governor
It’s the issue that handed Trump the White House as Americans battled sky-high inflation at the grocery store.
In the run-up to the election, Agarwal was struck by a commercial the now-president was running: ‘Kamala is for they/them, President Trump is for you.’
‘Trump ran this ad nationally and it hit so hard,’ he recalls.
‘People felt like they couldn’t afford groceries, and meanwhile one of the major parties is focused on the 0.1 percent of the country that’s trans.’
Agarwal says that he agrees with the Democratic Party’s positions on LGBTQ and DEI but that these are not the top concerns for Californians.
‘If you think that DEI or trans rights are the biggest issue, that’s fine. I respect you. But you should not vote for me,’ he says.
So what is his top priority? Bureaucratic bloat.
Agarwal accuses Newsom of essentially buying votes through California’s colossal civil service.
‘The largest employer is not some tech company. It’s not some Hollywood company. It’s the state of California. It employs 275,000 people,’ he says.
‘They are going to vote for this guy because he’s paying their salaries.’
Agarwal says that $50 billion – one-sixth of the state’s budget – goes to paying the state’s civil servants.
‘This year alone, Newsom added 20,000 civil service workers while the population of California is actually declining,’ he adds.
He claims that Newsom’s motivation for this is a cynical ploy to keep his base happy and the campaign coffers filled.
‘The reason he does that is the union, SEIU 1000, are massive donors to his campaign,’ Agarwal says.
Perhaps even more egregiously, he reveals that many of the state’s employees don’t even live in California.
‘So they’re getting paid by the state of California, and they’re spending their money in Nevada or Arizona,’ he adds.
He notes that the state is hemorrhaging residents – around 1.5 million people left California between 2020 and 2024.
‘It’s because living here is too expensive. Like the median house price here is $900,000,’ Agarwal says.
But he’s up against a crowded field.
He’s polling at barely 1 percent in a pack dominated by establishment Democrats like former Congresswoman Katie Porter (21 percent) and ex-HHS Secretary Xavier Becerra (14 percent).
Two Republicans – Riverside County Sheriff Chad Bianco and Fox News commentator Steve Hilton – are also in double digits, raising the prospect that Democratic vote-splitting could send two Republicans to the general election.
But the implications for the California race are national.
‘The California gubernatorial election is the largest election coming up prior to the presidential in ’28. It’s critical for the Democratic Party to go back to common sense,’ Agarwal says.
He believes that it could be a bellwether for 2028 and flip the script on the Republicans’ success in 2024.
It comes after recent Democratic wins in New York, New Jersey and Virginia, focused on messages of ‘affordability’ where the Trump administration is struggling to deliver on a campaign promise to tackle runaway inflation.
Whether he wins or not, Agarwal’s diagnosis of the Democratic Party’s acute problem might just be what saves them. If the party can’t win back that 40 percent who voted for Trump in their safest state, 2028 looks bleak.
‘I’m just telling my story over and over again to as many people that will listen,’ he says. ‘My story will work or it won’t work.’
Either way, the Democratic Party’s reckoning with its ‘lost Democrats’ has begun – in the last place they expected to fight for survival.
