“What motivates Silicon Valley C.E.O.’s is typically not making money but making a difference,” says Zach Nelson, chief exec­utive of the software company NetSuite, which registered for an initial public offer­ing in July. “What motivates hedge fund managers is making money—and not just for themselves but for their clients.” In a Seinfeld-esque moment, he adds, “Personally, I don’t find anything wrong with it.”

Nelson’s statement is telling. Talking to tech types, you get the sense that they are increasingly awed by East Coast private money. There might even be a hint of fear.

“The hedge fund structure is an unstoppable force in the market,” says Roger ­McNamee, co-founder of Elevation Partners, a Silicon Valley investment firm divided between tech and private equity. “Possible analogies might include Sherman’s march to the sea or the spread of kudzu.”

Marc Andreessen, co-founder of Net­scape, has made a point of getting to know the hedgies. During one trip East, he visited hedge fund managers to persuade them to invest in his latest company, Ning. Such pilgrimages are likely to become more common, he says. The tech industry needs hedge fund money. The names of hedge funds are starting to be murmured at those Silicon Valley parties.

The hedgies don’t seem to have quite the same sense of wonder about Silicon Valley. “If anything, the hedge fund infatuation with tech is much smaller today than it was five years ago,” says Jeff Matthews, who runs the hedge fund Ram Partners.

What if these investors wind up in the driver’s seat of the U.S. economy? What if they are America’s new face to the world—not General Motors, Disney, Microsoft, or Google, but Steve Cohen and his SAC Capital Advisors? In other words, instead of cars, entertainment, or information, this nation’s best-known product would be a financial dark art. Gordon Gekko meets Lord Voldemort. Greed is magic.

For citizens of Tehran, Caracas, or, God knows, Paris, such dominance by U.S. hedge funds should prove to be as uplifting as it is for Americans to hear about Exxon’s profit windfall while filling their cars with $3-per-gallon gas. McNamee has concerns too. “The hedge fund phenomenon has further shortened time horizons on Wall Street,” he says, forcing C.E.O.’s to focus on near-term results. “For every Intel that spends too much on its future, there are at least 10 companies that don’t spend enough,” McNamee says. “Over time, this will hurt the U.S. economy.” The more heartbreaking commentary, though, comes from NetSuite’s Nelson: “I told my nephew, who is at Santa Clara University, if he wants to make money, be a hedge fund manager, not a high-tech C.E.O.”