While there were a lot of important topics addressed at the recent National Venture Capital Association board meeting in DC, the central item involved the recently passed JOBS (Jumpstart Our Business Startups) act by the Senate and supported by the Obama Administration and is now before the House. The act, which is strongly supported by the Republican leadership in the House, is bundled with a series of other important capital formation bills.
Some of the other topics we reviewed were:
- Crowd funding: seems to be an emerging reality that legislators are quickly going to school on. While there are concerns about potential abuses, a company’s ability to sell a modest amount of stock without registering but using trusted (i.e., regulated) intermediaries appears to be gaining wide support. Can eBay be used to facilitate this?
- Tax reform: notwithstanding the rhetoric around carried interest, and Romney’s tax returns, there is a sense that no real effort will be made to modify existing tax code before the national elections this fall.
- Cleantech: there does not appear to be real support now for new cleantech initiatives. The opposition of the utilities industry appears to have stifled any new regulations. Notably we learned of a mock cyber-attack on the power grid in early March – will be interesting to hear of their findings.
- Life sciences: there seems to be considerable government interest in crafting a set of new user fees which will be placed on life science companies. As if things weren’t tough enough…
- Accounting: for those CFO’s out there, it appears that the SEC will accept the International Accounting Standards board recommendations and that the US will move to be more in line with international jurisdictions. Additionally, and this is good news, the Financial Accounting Foundation (which oversees FASB but reports to the SEC) is preparing to make concessions for non-public companies by providing relief from needlessly burdensome accounting provisions.
As we were wrapping up the board meeting, we discussed the fall general election. Two interesting – non-scientific, non-authoritative – observations were made:
- If Obama wins, the Republicans will most like hold the House and take back the Senate, in which case absolutely nothing will get done for the next four years, or,
- If Romney wins, shortly into his administration he will realize that the situation is worse than he expected and he will (ironically) have to raise taxes.