Venture Capitalists May Be Left Out Of Burdensome Regulations On Private Equity

from the good-news dept

Wed, Oct 14th 2009 1:00am — Mike Masnick

Last month, we were a bit worried that an admittedly clueless Congress might lump venture capitalists in with other private equity firms in putting forth new regulations. Venture capital is quite different from basic private equity, and the proposed regulations would be quite burdensome for VCs without having any benefit. These "systemic" risk rules don't make sense for VCs who aren't investing in public investment vehicles for short times, but instead do long term strategic investments in private startups. VCs have been pushing Congress on this, and it looks like they finally got through to someone, as it appears that Barney Frank is looking to exempt VCs from any such regulation. This makes a lot of sense as venture capital and traditional private equity are very different animals, and putting them both under the same regulatory rules makes little sense. Putting VCs under systemic risk regulations makes even less sense, considering how unlikely it is that VCs investing in startups are involved in any sort of systemic risk issues.

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Filed Under: barney frank, innovation, private equity, regulations, silicon valley, systemic risk, venture capital

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Anonymous Coward, 14 Oct 2009 @ 4:08am

Dear Music Industry:

How hard is this for you to understand? As a heavy consumer of music, I'm willing to pay at least $25 a month for an unlimited subscription to a digital music service.

I don't care about being able to listen to music while I'm online and connected to your internet site. That is not any kind of a thrill.

If I subscribe to your service, I want access to a huge catalog of music, as well as the ability to play these songs on my IPOD. I'm not going to buy a Zune so that I can use it with your service.

I'm also not going to install another music-management software program onto my computer - if it doesn't play in Itunes, then I'm not paying for it. Right now, I can buy music from Amazon's MP3 service, which I can play without restriction using Itunes or my IPOD.

I disagree with TechDirt Mike on a few things when it comes to digital music. I'll put up with a limited amount of DRM so long as I'm borrowing your music, but if I pay for individual songs, they need to be DRM-free, with absolutely no restrictions on how I use that content - burn to a CD, to my IPOD, to another music device. Otherwise I'll just buy the songs from Itunes or Amazon.
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Anonymous Coward, 14 Oct 2009 @ 4:33am

Oops
I think you're in the wrong topic...
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SkypeIsHype, 14 Oct 2009 @ 5:18am

Skype is hype
www.SKYPEISHYPE.COM We are the team of inventors behind US Patent 7,089,319 issued in 2006 titled "Method and system for instantaneous on-demand delivery of multimedia content over a communication network with aid of content capturing component, delivery-on-demand client and dynamically mapped resource locator server". We introduce "Skype-killer" application, with new innovative "Internet broadcasting" functionality, as well as unmatched web browser centric cross-platform, cross-device reach. We will be able to compete on VoIP signal quality, innovative "Orbing" (P2P live and pre-recorded video broadcasts by individuals), as well as lower cost base. Skype is facing multiple litigations and is about to either be shut down permamently, or enter very expensive settlement arrangements. Plus, Skype is not is control or ownership of Global Index technology, the node forming augmentation of delivery system which they push to each user computer. We are actively pursuing venture capital. Please visit www.skypeishype.com for more detail.
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Ady, 14 Oct 2009 @ 7:08am

Sounds greedy
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fogbugzd, 14 Oct 2009 @ 9:16am

Defining VC
The problem with this type of exclusion is that lots of people who aren't Venture Capitalists will try to get themselves under those rules. That kind of things always happens. Minivans look like cars and they are used like cars, but the industry insists they are "light trucks" because that designation exempts minivans from a whole lot of regulations that really should apply to them. We'll probably see the same thing going on here with a lot of traditional investment firms trying to sneak into the VC tent.
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