Silicon Valley is in turmoil after rumors surfaced that Peter Thiel will fund Donald Trump's campaign. The venture capitalist took the floor at the Republican National Convention in July when it endorsed Trump for President of the United States.

Insider information shows that Thiel is preparing to donate $1.25 million, divided between the campaign and a pro-Trump Super PAC.

A direct result of the rumor was that Project Include, an important diversity initiative from the Valley, has axed cooperation with the Y Combinator venture incubator, as Thiel is a prominent part-time partner of the startup accelerator.

Project Include cofounder Ellen Pao labeled Thiel's donation as a way to create hate and instill fear.

In a blog post, Pao commended Y Combinator's approach to assuring workforce diversity. She goes on to say that YC companies demonstrated allegiance to crafting "vibrant and diverse organizations."

Despite Project Include cutting its ties with YC directly, Pao affirms that she is prepared to keep working with YC companies, but strictly on a business-to-business level.

"We hope this situation changes, and that we are both willing to move forward together in the future," she notes.

Pao was with the venture capital firm Kleiner Perkins before she sued the enterprise on accounts of gender discrimination. She then took the reins of Reddit, but a surge of hatred leading to user revolt caused her to leave the message board platform.

Keep in mind that Y Combinator's president, Sam Altman, already affirmed his support for Democrat candidate Hillary Clinton. However, he explains in a blog post why he thinks keeping Thiel on board is a good idea.

Altman stands by his choice of keeping the controversial venture capitalist in his team. Also, he points out that Trump getting the nomination is the result of the country's problems and not what caused them. He searches for the middle ground and urges people to cooperate more, despite the polarizing political differences that are tearing the country apart.

"The [...] two parallel political realities is not good for any of us. We should talk to each other more, not less," he notes.

Matt MacInnis, CEO at startup Inkling, explains why more people in the Valley are embarking on the political clash. He observes that until 2016, elections have maintained a reasonable level of rationality.

"This election isn't presenting two rational worldviews," he affirms.

The custom in the Silicon Valley used to be that investors and entrepreneurs do not get involved in the meanders of political positioning, but this year's election is a game changer. MacInnis points out that the prospect of having Trump as president caused a lot of Valley people to go public with their political views, regardless of business consequences.

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