https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png 0 0 email@example.com https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png firstname.lastname@example.org 10:00:452022-05-03 09:54:45Member Spotlight: Woven Capital
https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png 0 0 email@example.com https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png firstname.lastname@example.org 00:00:062022-07-13 13:43:28NVCA Celebrates Earth Day with VC Leaders in Climate and Sustainability
https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png 0 0 Robin Ceppos https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png Robin Ceppos2022-04-11 09:00:062022-04-08 13:13:08NVCA Member Spotlight: GM Ventures
https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png 0 0 Robin Ceppos https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png Robin Ceppos2022-03-21 14:37:132022-04-05 09:58:56NVCA Member Spotlight: Dcode Capital
https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png 0 0 Robin Ceppos https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png Robin Ceppos2022-03-15 15:16:592022-04-11 14:36:08Building Better: Nationwide Ventures & Betterview
Welcome to the NVCA Blog series, Building Better, where we celebrate the dynamic relationship between our VC members and their innovative portfolio companies around the nation. For today’s Building Better, we spoke with Brian Anderson at Nationwide Ventures, and David Lyman & David Tobias of Betterview. Read more
https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png 0 0 Bobby Franklin https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png Bobby Franklin2022-03-03 10:00:412022-03-03 09:10:17Tune into the NEW Venture Capitol podcast!
We are excited to announce that NVCA has launched its first-ever podcast and we hope you will tune in! It’s called the Venture Capitol podcast, and that’s Capitol with an “O” as in Capitol Hill where we focus a great deal of attention on advocating for America’s startup ecosystem.
Why did we decide to do a podcast?
We wanted another way to communicate, educate, support and maybe even entertain folks in the venture industry, as well as lawmakers on Capitol Hill and across the country. This podcast will give listeners a unique look at public policy priorities, premier research, and industry initiatives through the eyes of America’s venture capitalists.
As host of the show, I will be interviewing expert guests from the VC industry as well as policymakers to talk about the issues that are important to our nation’s startup ecosystem, and highlight how the VC industry has a dynamic impact on America’s economy and job creation.
Our 1st Episode
We are excited to bring you the very first episode of the Venture Capitol podcast! Our first episode features our Venture Forward Executive Director Maryam Haque. She and I discuss the important work that is being done to make our industry more diverse. You will also hear from a rising star in the venture industry. We hope you enjoy the podcast and will share it with your friends!
Here at NVCA, we believe investing in tomorrow starts with smart policies today. Click below to listen to our 1st episode.
Also listen on Apple Podcast, Spotify, or wherever you listen to great podcasts.
https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png 0 0 Michael Chow https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png Michael Chow2022-02-22 11:43:242022-02-22 11:43:24New Research Quantifies the Breadth, Growth, and Resilience of Jobs at VC-backed Companies
From coast to coast, the venture capital industry is fueling resilient American jobs, and we have new data to prove it. NVCA, Venture Forward, and the UNC Kenan-Flagler Institute of Private Enterprise embarked on a first-of-its-kind study to explore the employment dynamics of workers at VC-backed companies in the U.S. Using a list of over 67,000 companies that received venture financing as early as 1970 and administrative data on employment for U.S. establishments dating from 1990 to 2020, we successfully mapped the location of workers at VC-backed companies in 2020 by both state and congressional district. Our results, as detailed in this newly released report, were striking.
First, we found that workers at companies that received venture financing are distributed broadly across the U.S. Despite 73% of VC investment dollars going to California, Massachusetts, and New York in 2021, our analysis shows that 62.5% of employees at the companies in our national data set were located outside of those three states. The distribution of VC-backed jobs is geographically dispersed with workers at VC-backed companies located in all 50 states and all 435 congressional districts (as well as Washington, D.C. and Puerto Rico). These results add grist to the sentiment that venture capital is spreading through the country and benefiting labor markets and local economies that span the whole country.
The dynamics of these jobs at VC-backed companies over time were also eye-opening. We found that employment at VC-backed companies grows faster than employment at non-VC-backed companies. What we did not expect was how much faster employment at VC-backed companies grows. The annualized growth rate of employment at VC-backed companies in our dataset between 1990 and 2020 is 8.2%. In comparison, the growth rate of total private sector employment (as provided by the Bureau of Labor Statistics) between January 1990 and February 2020 is just 1.1%. This means that employment at our set of VC-backed companies grew at roughly eight times the pace of employment at non-VC-backed companies.
Finally, we were struck by the resilience of job growth at VC-backed companies and noted that growth rates of employment at VC-backed companies were strong and positive regardless of the stage of the business cycle. To provide one example of this resilience, consider employment dynamics following the most recent financial crisis of 2007-2008. Following the financial crisis and during the Great Recession, annual job growth at our set of VC-backed companies exceeded 4% for every year between 2009 and 2018. In contrast, total private sector employment shrank by 4.3% in 2009, contributing to a decrease of 7.4 million private sector jobs during the recession.
We believe the findings in our report concerning the breadth, growth, and resilience of VC-backed jobs provide motivation for further exploration of this subject, and hope that others will build on our research. In addition, we hope that our findings indicating that VC investment serves as a catalyst for job creation not merely in a select few metropolitan hubs will promote policies that encourage more VC activity in the U.S., helping to fuel broad-based prosperity across the entire nation.
https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png 0 0 Jeff Farrah https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png Jeff Farrah2022-02-02 14:32:302022-07-26 14:38:02Coalition for International Entrepreneurship Sends Open Letter Recommending Changes to International Entrepreneur Parole
Support for IEP
Immediately establish premium processing for IEP applications so qualified entrepreneurs can rapidly launch their businesses in the United States.
Yesterday, 36 organizations and individuals from the immigration and startup communities sent an open letter to Secretary of Homeland Security Alejandro Mayorkas. The letter, available here, commends the administration for reviving International Entrepreneur Parole (IEP) and recommends important procedural changes to make the program easier to use.
Numerous other countries, including the UK, Australia, Canada, New Zealand, and Singapore have designated visas to attract entrepreneurs, unlike the United States, which have helped them to cut into the United States’ lead in attracting talent from around the world. The IEP holds promise to be the United States’s foremost pathway for migrants to found businesses here, filling this missing gap in US immigration policy.
Changes are needed to make sure the program is effective, attractive, and efficient. Resolving the existing procedural issues could unlock the full economic potential of IEP. As stated in the letter, “if it were functioning smoothly, IEP…has the potential to create a million jobs over ten years.”
Read the full letter here.
Support for IEP
“For too long, the US has told international students and temporary workers brimming with good ideas and eager to start new ventures that they have to choose between building companies and staying in the United States,” said Jeremy Neufeld, Senior Immigration Fellow at the Institute for Progress. “These changes would unleash the potential of many stifled entrepreneurs.”
“The National Venture Capital Association was pleased to play a lead role in development of the International Entrepreneur Rule, including in the NVCA v. Duke lawsuit that challenged the Trump Administration’s attempt to delay and end the program before it began. Going forward, it is important the International Entrepreneur Rule be implemented in a way that supports the foreign-born founders who want to start high-growth companies in the United States,” said Jeff Farrah, General Counsel at the National Venture Capital Association. “NVCA is proud to stand with this coalition to continue to work with the Biden Administration so the benefits of the International Entrepreneur Rule are realized.”
“International students are vital contributors to our knowledge economy and innovation agenda,” Presidents’ Alliance on Higher Education and Immigration Senior Policy Advisor Jill Welch said. “The International Entrepreneur Parole program, if fully implemented, will provide a much-needed pathway for those who graduate from our colleges and universities to stay here and innovate.”
“The current visa options are inadequate to accommodate the modern practices of entrepreneurship and emerging companies,” said Tahmina Watson from Watson Immigration Law and author of The Startup Visa. “Therefore, it is crucial to implement these suggestions; otherwise, the program will remain unusable.”
The Honorable Alejandro Mayorkas
Secretary of Homeland Security
Department of Homeland Security
Washington, DC 20528
RE: U.S. Innovation and Job Creation through International Entrepreneur Parole (IEP)
Dear Secretary Mayorkas:
As the U.S. recovers from the COVID-19 pandemic, it is essential that we take advantage of every opportunity for economic growth and job creation. One of the biggest untapped resources to create new opportunities for Americans is international entrepreneurs’ and students’ strong motivation to launch their startup businesses in the United States. Over half of the billion-dollar startups launched in the United States were founded by immigrants—despite the incredibly challenging and outdated immigration system.1 Immigrants also start businesses at higher rates than native-born Americans.2
We commend the Biden Administration for its recent actions reviving International Entrepreneur Parole (IEP).3 It is the last remaining action item of your predecessor, Secretary Jeh Johnson’s 2014 plan to support high skilled businesses and workers.4 This announcement strongly signaled to the world that the United States welcomes talented minds from around the globe and strives to lead the world in technological and scientific achievement.
For the United States to stay competitive and remain attractive to talented individuals all over the world, it is vital that the IEP application process be as efficient and smooth as possible. It is currently our best option to bring innovative entrepreneurs to our country and allow those who are already here to stay. Unlike many of our international rivals, the United States does not have a dedicated visa for startup entrepreneurs. There are limited pathways for international students transitioning from their student visas to start their own businesses. But, if it were functioning smoothly, IEP could fill this gap and has the potential to create a million jobs over ten years.5
Unfortunately, there are several procedural issues which make the IEP process volatile, uncertain, complex, and ambiguous. As currently situated, it is very difficult to actually use the program. Some of these barriers, such as the large backlogs at U.S. consulates, will lift as the COVID-19 crisis recedes, but others will continue to make the program ineffective.
As experienced immigration lawyers, venture capitalists, and policy experts, we have five key recommendations to improve the efficacy of IEP:
Immediately establish premium processing for IEP applications so qualified entrepreneurs can rapidly launch their businesses in the United States.
USCIS has in the past agreed to adhere to a 14-day processing time for certain cases without premium processing (e.g. O and P visas).6 Additionally, a clear procedure was established to allow applicants to follow-up should processing times exceed that timeframe. We would encourage the USCIS to implement a similarly defined and prompt timeframe for the adjudication of these cases.
Establish and communicate suitable processing systems at the USCIS service centers. Currently, IEP applications are adjudicated at the EB-5 Immigrant Investor Program Office. We respectfully suggest that the agency consider whether IEP applications should be redirected to officers who routinely adjudicate and are familiar with L-1 and E-2 cases as IEP applications are more similar to E-2 and L-1 petitions.
Incorporate the use of the Validation Instrument for Business Enterprises (VIBE) program to streamline the qualification process for investors. This program is already being used to validate information about companies petitioning to employ nonimmigrant and immigrant workers through Forms I-129 (for the H-1B, for example), I-140, I-360, and I-485.7
Modify USCIS guidance on the term “qualified investor” to ensure that investors with passive foreign limited partners are not unnecessarily excluded.
Restart the USCIS Entrepreneur in Residence initiative to develop routine feedback loops with stakeholders and consider a hybrid model with both virtual and in-person activities to improve entrepreneurs’ ability to participate and decrease the agency’s administrative and badging burdens.
Establish regular interaction with stakeholders in the academic, entrepreneur, legal, and investment communities to further refine the program. As the IEP program continues to develop, there will certainly be additional administrative or procedural hurdles that come to light, and the communities most impacted by these hurdles will be able to most readily and reliably recognize these hurdles ahead of time. Increased interaction can include more events hosted by the Public Engagement Division, or the creation of an entrepreneurship subcommittee for the Homeland Security Academic Advisory Council (HSAAC).8
To build our economy back better than before, we need immigrant entrepreneurs and innovative startup founders. By making these changes, the United States will have the opportunity to maintain its reputation as the top destination for entrepreneurship and innovation in the world and continue to be able to create new jobs for our citizens.
Coalition for International Entrepreneurship
American Immigration Council
American Immigration Lawyers Association
Angel Capital Association
Carnegie Mellon University Graduate Student Assembly
Center for American Entrepreneurship
Consumer Technology Association (CTA)
Digital Irish Inc
Economic Innovation Group
Federation of American Scientists
Illinois Institute of Technology
Illinois Science & Technology Coalition
Information Technology Industry Council (ITI)
Institute for Progress
National Immigration Forum
National Venture Capital Association
Presidents’ Alliance on Higher Education and Immigration
Washington Technology Industry Association
Katie Allen, Senior Vice President, Center for American Entrepreneurship
John R. Dearie, President, Center for American Entrepreneurship
Brad Feld, Partner, Foundry Group
Kumar Garg, Vice President, Schmidt Futures
Elizabeth Goss, Esq., Goss Associates LLC
Troy Henikoff, Managing Director, MATH Venture Partners
Jaclyn Hester, Foundry Group
Brienne Maner, Executive Director of Startup Sioux Falls
Fiona McEntee, Managing Attorney of McEntee Law Group
Blake Patton, Founder and Managing Partner of Tech Square Ventures
Nik Rokop, Coleman Foundation Clinical Associate Professor of Entrepreneurship, Stuart School of Business, Illinois Institute of Technology
Leslie Lynn Smith, National Director, GET Cities
Tahmina Watson, Immigration Attorney, Author of The Startup Visa; Watson Immigration Law
Stephen Yale-Loehr, Of Counsel, Miller Mayer
For the featured illustration, we thank Nick Matej for his great work.
This piece originally appeared in Institute for Progress
https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png 0 0 Robin Ceppos https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png Robin Ceppos2022-02-02 10:56:092022-02-02 10:56:09NVCA Member Spotlight: Cortado
https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png 0 0 Jeff Farrah https://nvca.org/wp-content/uploads/2019/06/42865ff45b916762c541e2bffe9fa791b4165a45.png Jeff Farrah2022-01-28 14:45:102022-07-26 14:47:11SEC Could Pull More ‘Unicorns’ Into Public Reporting Regime
The U.S. Securities and Exchange Commission could compel more large private companies to comply with public reporting requirements in order to bolster transparency, potentially inviting resistance from so-called unicorns objecting to greater oversight.
The SEC’s current regulatory agenda indicates it is considering a proposal to amend how “shareholders of record” are defined under Section 12(g) of the Securities Exchange Act of 1934. Any change to existing criteria could be significant, because that provision of securities law triggers when companies must begin filing public disclosures regardless of whether they plan to conduct an initial public offering.
Morrison & Foerster LLP partner David Lynn said if rules around unicorns — or private startups valued at $1 billion or more — become more stringent, then a “pretty significant number of companies would have to rethink their approach going forward.”
“It changes the landscape of how they finance themselves and how they would structure their ownership,” said Lynn, a former counsel at the SEC’s Division of Corporation Finance, which reviews corporate disclosures for accuracy and materiality.
One scenario is that private companies could go public sooner, either through a direct listing or traditional IPO. Otherwise, “they’ll have the burdens of reporting under the Exchange Act without the upside of having their securities being publicly traded,” said K&L Gates LLP partner David Bartz, who works in the firm’s corporate practice.
Private companies disclose little information regarding their operations and financial conditions compared with their public counterparts. Public companies also have to abide by additional rules regarding accounting procedures and corporate governance.
As the ranks of unicorns have swelled in recent years — venture capital database CB Insights lists 986 unicorns worldwide — so have concerns that a large swath of companies with vast economic impact are operating without public oversight.
SEC Commissioner Allison Herren Lee raised transparency concerns in a speech in October in which she called for updating how shareholders of record are counted for public reporting purposes, expressing worry that much of the American economy is “going dark.”
“It’s time for us to reassess what it means to be a holder of record under Section 12(g),” Lee, one of the three Democrats in the majority on the SEC, said at the time.
Potential new SEC rules would add to the agency’s broader efforts to increase scrutiny of private markets under Chair Gary Gensler. On Wednesday, the SEC proposed rules that would beef up disclosures for hedge funds and private equity funds.
The SEC declined to comment on how it may propose to change Section 12(g) rules beyond a brief description listed on its regulatory agenda, which indicates the agency could propose amendments to the shareholder of record definition by October.
As it stands now, companies with 2,000 shareholders of record, with certain conditions, must register with the SEC and submit periodic filings applicable to public companies.
This threshold had stood at 500 shareholders dating back to 1964, when Congress created Section 12(g) of the Exchange Act aiming to ensure that companies would enter the SEC’s reporting system once their assets and investor base grew to a certain size.
The Jumpstart Our Business Startups Act of 2012 quadrupled that minimum to 2,000 shareholders, part of a larger legislation designed to stimulate IPOs and private capital raising. The bill effectively provided companies the flexibility to stay private longer.
The SEC is powerless to revise statutory thresholds enacted by Congress. But the agency can revisit its rules determining how shareholders of record are determined, which has become a sticking point.
Stock ownership of public companies now are often held in “street name,” by a broker rather than the beneficial owner. This enables brokers to keep electronic records of ownership, allowing for faster trading as it reduces reliance on paper certificates.
Thousands of shareholders can be covered under one “street name,” which one securities law professor said creates a misleading picture of a company’s investor base.
“This belies reality, and it is also contrary to investors’ best interests,” said Marc Steinberg, Radford professor of law at Southern Methodist University. “The reason is the lack of disclosure in the marketplace. Simply, this is not what Congress could have intended when it adopted the statute in 1964.”
Steinberg said nothing requires the SEC to count shareholders of record under “street name,” though that has been the practice for decades. In her speech, Lee of the SEC noted that the agency has the authority to require companies to look deeper to count beneficial owners.
It’s not fully certain to what extent investor records of private companies are held under “street name,” though Lee called on the SEC to further study the matter.
The SEC can also opt to count investors that participate in private investment vehicles known as feeder funds on an individual rather than collective basis. The agency could likewise count individually the number of investors in a venture capital fund, which could push companies closer to the 2,000-shareholder threshold that triggers public reporting.
If such options are pursued, one attorney said companies seeking to avoid inadvertently becoming a reporting company may respond by limiting the pool of their investors.
“It opens the door and shifts the scales in favor of wealthy individual investors who are capable of writing larger checks and only representing one shareholder on their cap table,” said K&L Gates partner Matthew Miller, who represents private investors.
Companies have various reasons for wanting to stay private longer, including the fact that activist shareholders expect results on a quarterly basis, which can hinder long-term strategic planning. Entering the SEC’s reporting system also opens a company’s disclosures to the plaintiffs bar, potentially inviting litigation.
Morrison & Foerster’s Lynn added that companies may also fear that disclosure requirements could be “used as a way to shame companies” into taking some sort of action, be it on climate change or other hot-button social issues.
In her speech last fall, Lee said employees who depend on stock compensation would benefit from more disclosure from large private companies. She also noted that labor unions bargaining for worker rights may want a clearer picture of a company’s finances.
While it’s unclear what an SEC proposal may look like, advocates for venture-backed companies are concerned about potential new rules. The National Venture Capital Association contends that such companies have delivered immense value to the public, including helping to mitigate effects of the coronavirus pandemic through innovation.
“We are concerned that unnecessary regulation of this vibrant sector will hamper entrepreneurship when jobs and technological leadership are needed,” National Venture Capital Association general counsel Jeff Farrah said in a statement to Law360. “Instead, the SEC should focus on making the public markets more inviting to high-growth companies as all stakeholders have a strong interest in more American public companies.”
If the SEC does proceed, support is likely not to be unanimous. Republican SEC Commissioners Hester Peirce and Elad Roisman, who recently left the agency, expressed concern last month that the SEC could counter the JOBS Act, which sought to provide private companies greater flexibility in deciding if and when to go public.
SMU’s Steinberg noted that private companies have additional tools to reduce their shareholder count if they want to avoid tripping over a minimum threshold, including reverse stock splits or tender offers by which they repurchase shares from investors.
“It’s not as if companies today are stuck with going public if they’re over this number,” Steinberg said. “There are internal corporate governance procedures that can be used to enable the company to stay private.”
Read more at: https://www.law360.com/articles/1459446/sec-could-pull-more-unicorns-into-public-reporting-regime?copied=1