In the past, NVCA has argued that a change to carried interest tax treatment would result in a significant decrease of venture capital investments to U.S. startups. It was always specious, given that not a single VC would say on the record that they’d stop being a VC if the law was changed.

So Franklin has abandoned that claim, acknowledging that “current VCs will continue to invest.”

His new tack is to argue that a tax treatment change would discourage the next generation of VCs from emerging, particularly in geographic regions outside of VC hotbeds like Silicon Valley, Boston and New York.

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