notes on reading # 11

notes on reading # 11 - likely put some smaller venture...

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“Fight against Regulation Intensifies” By Deborah Gage November 1, 2009 Venture Capital News Who: Venture capital and private equity trade groups Where: House Financial Services Committee Why: to argue whether Venture Capital should be exempt from registering with the Securities and Exchange Commission under the Private Fund Investment Adviser Act. Venture Capital Position: Yes they should be exempt. Private equity groups Position: No they should not be exempted and smallest members shouldn’t have to register with the SEC. What: Investment advisers registered with the SEC are required to provide clients with information about their business, fees, risks customers can expect and conflicts of interest. If Congress lets venture capitalists off the hook, “bubbles and fraud” will grow The NVCA claims that the cost of hiring compliance officers and lawyers would
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Unformatted text preview: likely put some smaller venture firms out of business. • Registration could cost venture firms as a group hundreds of millions of dollars, which he would prefer be directed into growing new companies. • Venture capital funds were exempt from the draft because they approached the congressional committee with an “amendment idea which would get us the information we are interested in having for systemic regulation.” • While private equity firms should be regulated, Congress should be careful about trying to regulate venture capitalists because they perform a distinct economic function that other investors don’t. • What I think of as venture capital is by nature a small operation running out of somebody’s house.”...
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