House Advances Tax Bill with Several NVCA Tax Reform Priorities

WASHINGTON, DC – The National Venture Capital Association (NVCA) issued the following statement after the House of Representatives passed H.R. 1, the Tax Cuts and Jobs Act.

“Throughout the process we have been championing tax reform recommendations that would encourage new company formation, and we are pleased to see some of those incorporated into the House bill,” said Bobby Franklin, President and CEO of NVCA.  “Preservation of the Qualified Small Business Stock rules and the R&D credit payroll tax offset are key to ensuring a vibrant entrepreneurial ecosystem, and we appreciate lawmakers providing relief to startup employees that are unfairly hit with a tax bill on phantom income they haven’t yet received.   (more…)

NVCA Cheers Changes to Senate Tax Reform Legislation

WASHINGTON, DC – The National Venture Capital Association (NVCA) issued the following statement after the Senate Finance Committee dropped from its tax reform legislation language that would have wreaked havoc on the equity-based compensation system of startups.  In the modified mark of the Tax Cuts and Jobs Act released by Senate Finance Committee Chairman Orin Hatch (R-UT), the updated bill removed a provision that would have taxed stock options at vesting, which would have forced employees of emerging growth companies to pay taxes on income that has not yet been received and in some cases never realized.  In addition, the committee took the extra step of adding new language to the bill that would provide a deferral to emerging growth company employees that are forced to pay taxes on their exercised stock options without a market to sell them.

“The entrepreneurial ecosystem can breathe a sigh of relief.  After hearing our concerns, the Senate Finance Committee joined their House Ways and Means Committee colleagues in removing language from their respective bills that would have radically altered the equity-based compensation model that has been so fundamental to the success of the entrepreneurial ecosystem for decades,” said Bobby Franklin, President and CEO of NVCA.  (more…)

More Work Remains in Senate Tax Bill to Support Entrepreneurial Ecosystem

WASHINGTON, DC – The National Venture Capital Association (NVCA) today issued the following statement after Senate Republicans unveiled their draft tax reform legislation.

“Senate Republicans have taken an important first step to modernize the code with the introduction of their tax reform legislation, and we are encouraged to see the preservation of some important priorities for the entrepreneurial ecosystem,” said Bobby Franklin, President and CEO of NVCA. (more…)

House Tax Bill Preserves Key Priorities for Entrepreneurial Ecosystem

WASHINGTON, DC – The National Venture Capital Association (NVCA) issued the following statement today after House Republicans unveiled their draft tax reform legislation.

“We view tax reform as a unique opportunity to encourage new company formation by modernizing the tax code to better reflect the realities of the entrepreneurial business model,” said Bobby Franklin, President and CEO of NVCA.  “We are pleased the House Ways and Means Committee heard our message and is preserving several issues important to the entrepreneurial ecosystem, including Qualified Small Business Stock Rules and the R&D credit payroll offset.  (more…)

Tim Curt of Warburg Pincus Presented with NVCA Industry Impact Award

WASHINGTON, DC – The National Venture Capital Association (NVCA) today announced that Tim Curt, Managing Director at Warburg Pincus, is the 2017 recipient of the NVCA Industry Impact Award.  The Industry Impact Award is dedicated to recognizing CFO, operations, and compliance professionals at venture firms who have provided an exceptional public service to the VC industry through the dedication of their expertise, resources and commitment to the NVCA CFO Task Force.

A long-time participant and leader of the NVCA CFO Task Force, Curt was honored for all his work in spearheading some of the group’s most detailed policy engagements as well as his active participation on the NVCA Board of Directors.  He was instrumental in NVCA’s efforts to ensure that the Financial Accounting Standards Board’s rules and definitions are compatible with venture capital fund and private company business models.   (more…)

Total Venture Capital Dollars Invested in 2017 On Track to Reach Decade High

Investors Pressed Pause on Fundraising as They Pump Capital into World’s Most Promising Companies, Meanwhile PE Firms Provide Much Needed Liquidity for VC’s Sluggish Exit Market

SEATTLE, WA – Investment into venture-backed companies in 2017 is on track to match or exceed dollars deployed in 2016, and if this pace holds, full-year 2017 venture capital (VC) dollars invested could be the highest in the past decade, according to the 3Q 2017 PitchBook-NVCA Venture Monitor. Venture investors deployed $21.5 billion to more than 1,699 venture-backed companies during the third quarter, bringing 2017’s total investment to $61.4 billion deployed across 5,948 deals to date. Mega-deals completed in the third quarter, like WeWork’s $3 billion infusion of VC, helped inflate deal value and have become the new normal in VC where investors pump larger amounts of capital into fewer companies, especially in the later stages. In fact, deals that carried a valuation of $1 billion or more represented less than 1 percent of 2017 deal count, but nearly 22 percent of the aggregate deal value. Meanwhile, private equity firms are increasingly providing an alternative liquidity option for a tepid exit market, which is pacing for the lowest number of exits since 2010.

“We are witnessing an upward trend in the amount of capital deployed while the number of companies receiving investment continues to shrink.  However, if you peel back the onion, you uncover the influence unicorns are having on market dynamics, with investments by non-traditional investors into these companies inflating the overall dollars invested and valuations,” said Bobby Franklin, President and CEO of NVCA. (more…)

Motion for Preliminary Injunction Filed to Compel DHS to Implement International Entrepreneur Rule

WASHINGTON, DC – The National Venture Capital Association (NVCA), entrepreneurs and startup companies today filed a motion for a preliminary injunction in federal court in Washington, D.C. to compel the Department of Homeland Security (DHS) to implement the International Entrepreneur Rule (IER) pending final judgment of the suit brought by NVCA and the other plaintiffs on September 19.  Represented by the American Immigration Council and Mayer Brown LLP, NVCA and the other plaintiffs are challenging DHS’s delay in implementing the IER, arguing that because DHS did not solicit advance comment from the public on the delay, it violated clear requirements of the Administrative Procedure Act.  Because NVCA and the other plaintiffs are substantially likely to prevail on the merits of the lawsuit, they are seeking the preliminary injunction so that the rule can be implemented immediately and DHS can accept and adjudicate applications from entrepreneurs while the case proceeds.

“Making it easier for talented entrepreneurs to come to the U.S. so that they can grow the next generation of American companies is a no-brainer.  By all measures, their contributions would be a net positive for our country and our economy, which is why it’s confusing that the rule was delayed in the first place” said Bobby Franklin, President and CEO of NVCA.  (more…)

NVCA Recommends Changes to Volcker Rule to Support VC Investment into Emerging Ecosystems

WASHINGTON, DC – In its submission to the Office of the Comptroller of the Currency (OCC), the National Venture Capital Association (NVCA) today recommended key changes to the Volcker Rule that would support investment into high-growth companies in emerging ecosystems across the U.S.  NVCA outlined all the ways in which the scope for the covered funds provision of the Volcker Rule is too broad and the impact the prohibition has had on the economy, while demonstrating that it was never Congress’s intent to include venture capital funds in the prohibition and changes are required to correct this regulatory overreach. (more…)

PitchBook and NVCA Mark One-Year Anniversary of Partnership to Advance U.S. Venture Capital Community

WASHINGTON, DC – PitchBook, the leading data provider for venture capital (VC), and the National Venture Capital Association (NVCA), the leading  voice and advocate for the U.S. VC community, announced today the one-year anniversary of their data and publishing partnership. One year ago, the two organizations came together with the combined goal to increase clarity, insights and advocacy to advance the U.S. venture capital ecosystem. PitchBook serves as NVCA’s official data provider, enabling the association to present to U.S. policymakers data-driven research that demonstrates the positive and far-reaching impact of venture capital. Together, PitchBook and NVCA also jointly produce the PitchBook-NVCA Venture Monitor, the authoritative quarterly report on VC activity in the U.S. entrepreneurial ecosystem.  (more…)

NVCA, Entrepreneurs, and Startups File Lawsuit Challenging Delay of International Entrepreneur Rule

WASHINGTON, DC –The National Venture Capital Association (NVCA) today joined entrepreneurs and startup companies in filing a lawsuit in federal court in Washington, D.C. challenging the Department of Homeland Security’s (DHS) delay of the International Entrepreneur Rule (IER).  Finalized by the Obama Administration, the rule would have allowed talented foreign-born entrepreneurs to travel to or stay in the United States to grow their companies for two and a half years with the possible extension of another two and a half years.  NVCA and the other plaintiffs are represented by the American Immigration Council and Mayer Brown LLP.

Less than a week before the IER was to go into effect on July 17, DHS announced that the rule would be delayed and that DHS will be proposing to rescind the final rule.  Because DHS did not solicit advance comment from the public on the delay, it violated clear requirements of the Administrative Procedure Act.  As a result of the suspension of the IER, immigrant entrepreneurs that intended to use the rule have been and will be harmed.  The U.S. economy will miss new businesses and jobs that would have been created but that unfortunately will now be created overseas.  To remedy this unlawful action, the plaintiffs are asking the court to compel DHS to implement the IER, and begin processing applications of foreign-born entrepreneurs so that they can come to the U.S. on a temporary basis to grow their businesses. (more…)