Fred Wilson of Union Square Ventures points out two unnecessary clauses in Dodd’s banking bill which continues to pluck the golden goose of venture capital towards a dead duck: to raise the threshold for a qualified investor to be an angel, and to remove the simplified Federal safe harbor for venture investing. He wonders why such clauses matter in a financial reform bill dealing with large commercial banks, since angel investing does not rely on these banks. Then he asks why have these thresholds at all: why make it hard for friends & family to invest in a friend’s start up?
First Sarbanes-Oxley, then demonization of options, modification of option accounting, changes in tax laws, etc etc. The VC industry is waiting for the next big shoe to drop, a change in tax treatment of carried interest. What’s the point, other than the Politics of Envy? VC had nothing to do with the credit crunch, and everything to do with keeping the US competitive.
The industry is now voicing their concerns, so maybe they can short circuit this. Hold the cynicism for the moment.
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