Recently, we had the pleasure of hosting Navin Sethi with Ernst & Young LLP on a webinar to discuss the new Opportunity Zones program created by the recent tax cut law (if you missed it, click here for a recording). Navin frequently counsels wealth and asset management firms on partnership tax matters as well as providing guidance on how Opportunity Zones can apply to venture capital investments.
The goal of the Opportunity Zones program is to drive more investment in underserved areas. Because venture capital investment is critical to economic growth and opportunity, our intent is to explore how compatible Opportunity Zones are to the startup investment model. This post will build off the great content we got from the webinar, provide a brief overview of the program, and go through some frequently asked questions from NVCA membership. (more…)
Policymakers are constantly looking for ways to boost economic growth. They tweak the tax code, write and rewrite regulations, and deploy a variety of other tools at their disposal. But one underutilized tool is immigration policy; specifically immigration policy that facilitates the creation of new companies, which research shows is the true growth engine of the economy. The best part is it won’t cost the federal government one red cent. (more…)
TL; DR: YES.
Okay, for those of you still with me: I’ve previously written about foreign investment scrutiny and its impact on the venture and startup ecosystem, including how the legislative process played out, how the new pilot program rules impact VCs, and what to expect next. In a nutshell, earlier this year Congress greatly expanded the authority of the Committee on Foreign Investment in the U.S. (CFIUS) to examine foreign investment deals for national security implications. Through the Foreign Investment Risk Review Modernization Act (FIRRMA), Congress gave CFIUS the authority to review minority, non-controlling investments by a foreign person into U.S. critical technology companies. (more…)
Last week, NVCA sent a letter to the Securities and Exchange Commission (SEC) offering recommendations for how the agency could modernize the definition of “venture capital fund” to more accurately reflect the industry as it looks today. Why is this important? Because this definition governs which private funds can be Exempt Reporting Advisors (ERAs) and which must register with the SEC as Registered Investment Advisors (RIAs). (more…)
VCs and entrepreneurs continue to be impacted by new foreign investment scrutiny. In August, the Foreign Investment Risk Review Modernization Act (FIRRMA) delivered enhanced powers to the Committee on Foreign Investment in the U.S. (CFIUS), a U.S. government entity that has been called the “ultimate regulatory bazooka” for its ability to reject foreign investment for national security reasons. Recently, NVCA members and startups heard from CFIUS leaders at our Emerging Technology Meets National Security conference. That included the Treasury Department’s Heath Tarbert, who leads FIRRMA implementation and has a major role in how the new powers will impact the venture industry going forward. (more…)
NVCA is working to allow banks to invest in venture capital funds again. As part of this effort, we recently filed a comment letter proposing two solutions for how the various federal agencies can accomplish this priority while still adhering to the broader goals of the Volcker Rule. Through this post, our aim is to share some background on the current regulation and provide an overview of what our proposal seeks to accomplish and why.
Before the Volcker Rule became the law of the land, banks served as an important source of capital for venture capital funds, particularly for smaller funds in emerging startup ecosystems. (more…)
Venture investors and startups are waking up to a new reality as the U.S. government is newly empowered to scrutinize foreign investment, including into venture funds and by foreign strategic investors. We’ve written previously about the big impact the Foreign Investment Risk Review Modernization Act (FIRRMA) will have on venture capital. The Treasury Department recently made a bold gambit when it issued Pilot Program rules under FIRRMA (fact sheet here). All aspects of the startup ecosystem are wise to understand these rules and buckle up going forward. (more…)
If you’re a VC with a foreign LP or have foreign co-investors, then you should know the law is about to change.
Later this week, Congress is expected to pass legislation that will impact foreign investment into the venture and startup ecosystem in new ways. President Trump is expected to sign the Foreign Investment Risk Review Modernization Act (FIRRMA), as he chose to back the bill rather than move forward with China-specific restrictions. NVCA is pleased to see key changes in the final bill, but it still stands to affect VC funds with foreign limited partners and/or co-investors. We will continue to engage on your behalf and encourage you to be in touch with questions or comments. (more…)
At a time when the startup ecosystem is intersecting more and more with policies coming out of Washington, it seems like an ideal time to bring venture capitalists, entrepreneurs, and policymakers together to discuss the future of policy impacting America’s innovation industry.
Last week, NVCA did just that at VCs-to-DC. Our event brought together the entrepreneurial ecosystem and policy decision makers in Washington, D.C. to take part in conversations on policy issues to strengthen the U.S. startup ecosystem. (more…)