Contact:

Ben Veghte
NVCA
202.864.5923
bveghte@nvca.org


FOR IMMEDIATE RELEASE:

Offer lawmakers detailed policy recommendations to strengthen entrepreneurial ecosystem

WASHINGTON, DC – Venture investors Scott Kupor, Managing Partner at Andreessen Horowitz and Chair-elect of the NVCA Board of Directors, and Ali Behbahani, MD, Partner at New Enterprise Associates (NEA), testified today before the Senate Committee on Small Business and Entrepreneurship at a hearing to examine the role of venture capital in supporting innovation and spurring entrepreneurial activity in the U.S.

Venture’s Role in the Entrepreneurial Ecosystem

During testimony, Kupor and Behbahani walked Senators through the basics of the venture capital model, debunking misperceptions about venture and detailing the hands on work venture investors put in to growing successful startups.

“The reality is that those who are successful in our field don’t just pick winners.  We work actively with our investments to help them throughout the company-building lifecycle over a long period of time,” said Kupor during his opening testimony.  “We will support our portfolio companies with multiple investment rounds generally spanning five to ten years, or longer.  We serve on the boards of many of our portfolio companies, provide strategic advice, open our contact lists, and generally do whatever we can to help our companies succeed.  We hope all of our companies succeed against huge risks and grow into successful companies, but the honest truth is that the majority fail.”

“Despite the success of so many venture-backed companies, some wrongly believe that venture capitalists merely write a bunch of checks and hope that one or two of their investments hit it big.  But nothing could be further from the truth,” added Behbahani during his opening testimony.  “As a life science VC, I partner with scientists and entrepreneurs at the earliest stages of an idea and am actively involved as the company grows and prospers.  Great companies are built by a team that includes the startup leadership, scientific founders, advisors, industry partners, and venture capitalists.  You need all of these key ingredients to build an innovative company.”

A Policy Agenda to Strengthen Ecosystem

Recognizing the economic benefits that have resulted from venture capital investment into the entrepreneurial ecosystem, Kupor warned lawmakers that other countries have taken notice and are implementing policies to directly compete with the U.S.  The result of this being the precipitous drop in the U.S.’s share of global venture capital investment from 90 percent to 54 percent in only 20 years.

“This innovation arms race is a virtuous competition where the byproducts are new technologies that improve the way we live, new jobs and economic opportunities, greater productivity and greater economic growth,” said Kupor.  “But we must recognize that this competition is happening and engage before we cede too much ground.  To that end, if I could leave Congress with one message it would be this: please understand that innovative entrepreneurship is now a global game.  It is time to prioritize policies that support the American entrepreneurial ecosystem.”

Economic and Societal Benefits

The benefits of a successful venture investment extend far beyond the venture capitalist and the startup founder.  Behbahani described for lawmakers how the success of venture-backed startups can have an outsized impact on our economy and society.

“What is really exciting about venture capital is when we succeed, a few things happen: the country get the benefit of a new industry or company; your constituents get high-paying and rewarding jobs; and investors into venture funds gain a sizeable return on their investment,” said Behbahani.  “These investors include educational institutions, charitable organizations, and pensions in many of your states.  And more significantly we help bring forth new drugs and devices that can transform how medicine is practiced.  Simply put, when venture capital does well, the United States does well too.

Download Kupor’s written testimony here.

Download Behbahani’s written testimony here.


About National Venture Capital Association

Venture capitalists are committed to funding America’s most innovative entrepreneurs, working closely with them to transform breakthrough ideas into emerging growth companies that drive U.S. job creation and economic growth. As the voice of the U.S. venture capital community, the National Venture Capital Association (NVCA) empowers its members and the entrepreneurs they fund by advocating for policies that encourage innovation and reward long-term investment. As the venture community’s preeminent trade association, the NVCA serves as the definitive resource for venture capital data and unites its member firms through a full range of professional services. For more information about the NVCA, please visit www.nvca.org.