Ben Veghte


WASHINGTON, DC – The National Venture Capital Association (NVCA) today unveiled its submission to the Senate Finance Committee with tax reform proposals to encourage new company formation.  These proposals were provided to the committee in response to a request from Senator Orrin Hatch (R-UT), Chairman of the Finance Committee, who called on stakeholders to provide ideas, proposals and feedback to the committee on how to improve the American tax system.

“Tax reform represents a huge opportunity to spur greater economic activity for the country and critical to that will be using this opportunity to reprioritize pro-entrepreneurship tax policy,” said Bobby Franklin, President and CEO of NVCA.  “As tax reform discussions continue on Capitol Hill, we urge policymakers to not lose sight of the important economic power of our nation’s startups and consider what changes can be made to the tax code to spur new company formation.  We are submitting a blueprint for how tax reform can encourage new company formation without creating a single new credit or deduction in the tax code and call on lawmakers to include a section in tax reform legislation dedicated to entrepreneurship.”

Included in NVCA’s proposal are discussion documents for six areas where the tax code significantly affects the entrepreneurial ecosystem:

  1. Allow more startups to access the benefits of the R&D credit.
  2. Make the Qualified Small Business Stock (QSBS) rules easier to use, and expand the eligibility limits.
  3. Provide startups a safe harbor from Section 382 Net Operating Loss (NOL) limitation rules, which can arbitrarily punish startups for hiring and investing in innovation.
  4. Allow employees at startups to defer paying taxes on certain stock options.
  5. Preserve the capital gains treatment of carried interest, a fundamental policy for the economics of entrepreneurship investment.
  6. Maintain a significant differential between the capital gains rate and the top ordinary income rate, which encourages patient investment and high-risk entrepreneurial activity.

View NVCA’s Blueprint for Tax Reform

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