Barney Frank Won't Mess with VCs or Angels

Posted by: Nick Leiber on May 11, 2010

Barney Frank was very direct when I pressed him on the myriad restrictions that are being discussed in the Senate bill around angel investing and the discussions about taxing carried interest.

This is a post by guest blogger Jeff Bussgang. It is cross-posted on his blog, Seeing Both Sides.

jeff_bussgang.jpgBarney Frank was crystal clear in his briefing with a group of CEOs that I participated in this afternoon: he is going to make sure that the final Financial Reform bill that gets worked out with the Senate won’t mess with the angel or VC communities.

I came to Washington DC today with the Progressive Business Leaders Network (PBLN) group that I co-chair. It was our group’s annual trek to DC where 80 CEOs and business leaders from Massachusetts had the opportunity to dialog with the leadership from the congressional and executive branch. We met with Congressman Markey to talk about cap and trade (Senator Kerry is releasing his bill tomorrow and one of his staffers briefed us on its content), Senator Warner to discuss innovation investments and deficit reduction, and Congressmen Frank and Capuano to talk about financial reform.

On Financial Reform, Barney Frank was very direct when I pressed him on the myriad restrictions that are being discussed in the Senate bill around angel investing and the discussions about taxing carried interest. Here’s what he said:

“We will exempt venture capital from the carried interest tax.”
“We will not tighten the regulations on angel investing.”
“We will fight back on any attempts to regulate or register venture capital funds.”
“When this is passed, we will look to loosed RegA to facilitate IPOs.”

He confidently stated that the Senate would pass a bill by Memorial Day and that the reconciliation process would be done such that the President would sign a bill by the 4th of July.

Encouraging support from a powerful source—let’s hope he follows through!

If you want to lend your support on this issue, keep track of the NVCA’s activities and write your own representative. Mark Heesen, NVCA executive director, wrote an email to thousands of VCs today stating: “This morning we delivered the letter to every U.S. Senator with more than 1700 signatures from 41 states plus the District of Columbia. You can view the letter here and our corresponding press release here.

President Obama’s staffers told us: “We understand that start-ups and entrepreneurs are the key to leading the US out of the recession.” Again, let’s hope both sides of the aisle get the message.

Serial entrepreneur Jeff Bussgang is a partner at venture capital firm Flybridge Capital in Boston. Follow him on Twitter @bussgang.

Reader Comments

Priscilla

May 17, 2010 9:04 AM

Trusting Barney Frank with a promise about your money is like trusting a Kindergartener with a plate full of warm chocolate chip cookies to not eat any!
He's done a horrible job with Fannie Mae and Freddie Mac, if he were a CEO he would have been fired long ago. Why would anyone believe he has a clue about economics when you look at his new request for more money to bail them out?

Christopher Choate

June 4, 2010 2:43 PM

Let us be grateful for the amendments to the so called "Dodd Bill"! In its original form, it could have spelled the end for America's history of innovation and booming growth by stifling small businesses completely.

See this interesting article-
http://www.articledashboard.com/Article/Amendments-To-Financial-Reform/1613583

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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