VCs to Obama: Don't regulate us |
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VCs to Obama: Don't regulate us
Flickr photo via Aussiegall
In an op ed piece in The New York Times, venture capitalist Alan Patricof and finance professor Eric Dinallo slam the Obama administration's plan to regulate the venture capital industry. They also blame Sarbanes-Oxley legislation for the slump in IPOs, writing that additional regulation could hurt small, venture-backed companies.
"Because their business is contained within the ecosystem of limited partners, venture-capital funds and the companies in which they invest absorb all the risk: there can be no domino effect in the world financial system," they write.
OVP Venture Partners' Chad Waite offered some similar opinions in a piece with TechFlash in March, noting that venture firms were unfairly gettng slapped with the same regulations as hedge funds and other financial instruments.
"We don't play games with numbers. We take a gal, a guy and a dog in a garage and start a company around it," said Waite. "If you look back, the NVCA numbers don't lie. A huge amount of the U.S. economy -- our GDP -- is based upon companies that didn't exist 30 years ago. And their foundation and roots were in people in our community who started them, or at least provided the capital to fuel them."
The National Venture Capital Association also is paying close attention, with the NVCA's Emily Mendell telling VentureBeat in March that they have "a big concern" that the venture capital business may get "swept up into regulation meant for other asset classes."
[Flickr photo via Aussiegall]
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