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Carried Interest Off Table, Thank You to All PDF Print E-mail

Mark Heesen

Written by Mark Heesen   

Last night the House of Representatives passed a tax bill which keeps the Bush-era provisions in place through 2012. The bill did not contain any provisions to change the tax treatment of carried interest and, at this point, we can safely assume that there will be no such change enacted with the 111th Congress.

On behalf of the NVCA, I would like to take this opportunity to thank our membership and staff who have worked tirelessly on this issue for the last three years. Our position, that carried interest for venture capital investment should receive a meaningful tax differential to reward long-term investment in company formation and job creation, was heard by lawmakers loud and clear - thanks to the efforts of a dedicated and committed venture community.

The 112th Congress begins its work in January. It will be a  very different Congress than the previous one. While the carried interest debate may arise again over the next two years, the likelihood of a change in this provision has been greatly diminished. Still, we at the NVCA will continue to advocate for fostering an environment that supports venture capital and motivates entrepreneurs as the issues of partnership tax, capital gains rates, and the utility of many tax credits and deductions may arise as a part of overall tax reform. Thanks to our membership and staff, we are well positioned to make our case.





NVCA Presses Congress to Extend Two Energy Tax Credits PDF Print E-mail

Emily Baker

Written by Emily Baker   

Yesterday NVCA and TechNet submitted a joint statement to Congress strongly encouraging lawmakers to include the extension of two critical incentives for renewable energy in the tax bill that is currently being considered.

The Treasury Grant Program, Section 1603 and the Advanced Energy Manufacturing Credit, Section 48C are both due to expire at the end of the year. We are concerned that if they are allowed to lapse, investment into clean energy technology companies in the U.S. will suffer. While both of these tax credits have been very successful, they are unfortunately falling victim to partisanship since they were originally part of the Administration's economic stimulus package.

Late yesterday afternoon, the Senate Finance Committee released their draft of the tax bill which included Section 1603.  We were pleased to see this inclusion.   NVCA will continue to press lawmakers on including Section 48C.  Several members of the House have indicated their support for its inclusion as well.  Thank you to all the NVCA members who made calls to their Senate offices in support of this effort.  We are montioring the situation as the larger negotiations on the tax bill take place.





NVCA Supports SEC Increasing Offering Limit PDF Print E-mail

Mark Heesen

Written by Mark Heesen   
Today the House Financial Services Committee will hold a hearing to examine "A Proposal to Increase the Offering Limit Under SEC Regulation A".  The proposal seeks to raise the offering limit from $5 million to $30 million under which companies can be exempted from certain regulatory requirements when accessing the public markets.  The current $5 million dollar limit has been in place since 1992.
The NVCA  has submitted a statement to the Committee today, articulating our support for this proposal.  While this year we have seen significant improvements in the IPO market (YTD 2010 there have been 63 IPOs and 44 U.S. VC-backed companies in registration), we are well below the levels necessary to declare a full IPO recovery and the path to IPO continues to be longer than necessary.  Increasing the offering limit for regulatory exemption will offer an additional liquidity option for these promising companies.  We are encouraged that Chairman Frank has taken up this issue and hope it will move forward in the 112th Congress.




NVCA Cautiously Optimistic on Tax Proposal PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   

The tax proposal unveiled yesterday, if ultimately passed by both the House and Senate, should be good news for the venture industry.  Perhaps most significantly, the package did not include any carried interest provision to pay for tax extensions.

The compromise between the President and Congressional Republicans addresses almost every major outstanding short-term tax concern including:  a 2 year patch on the AMT; a 2 year deal on estate taxes; and a 1 year extension on most of the traditional “tax extenders” like the R&D tax credit.  It also included other provisions that many Members of Congress had previously sought to pair with a carried interest revenue source, such as the 13 month extension of unemployment insurance.

The big hurdle now will be in getting this deal across the finish line, given strong opposition by many within the liberal wing of the Democratic Party.  We’ll be watching this process closely.  Until the legislative language is locked in, there is always the chance that the outline could change.  In the clean tech area, that could be positive for the venture industry, especially if items like the 48c credit (the advanced energy manufacturing credit) that were left out of the tax deal are ultimately added back in.  However, it also means that there’s a risk, however small, of a change that could be detrimental for the industry.  Stay tuned.






Three NVCA Members Appointed to DOE Advisory Committee PDF Print E-mail

Emily Baker

Written by Emily Baker   

NVCA is pleased to announce that 3 of our members have been appointed to serve on a newly created Energy Efficiency and Renewable Energy Advisory Committee (ERAC).  The committee, which will report directly to Secretary Chu, is tasked with providing advice and expertise on clean energy issues to DOE’s Office of Energy Efficiency and Renewable Energy (EE/RE). The Committee will have 19 members, three of which are venture capitalists investing in clean energy technologies.  The committee members will also provide advice on the portfolio on DOE’s Office of EE/RE . 

In the press release announcing the formation of the ERAC, Secretary Chu remarked on the caliber of the committee:

"We are fortunate to have such knowledgeable people volunteering their time and efforts to the Department’s clean energy endeavors," said Secretary Chu. "They will be contributing their expertise and experience to help address the energy challenges faced by our Nation.”

The selected members of the ERAC, with NVCA members highlighted in blue,  are as follows:

Yet-Ming Chiang

Kyocera Professor of Ceramics, Massachusetts Institute of Technology

Lonnie Edelheit

Senior Vice President, Research & Development, General Electric Company (Retired)

Ira Ehrenpreis

General Partner, Technology Partners

Philip Giudice

Commissioner, Massachusetts Department of Energy Resources

Hal Harvey

CEO, ClimateWorks Foundation

Mark Jacobson

Professor of Civil and Environmental Engineering and Director, Atmosphere/Energy Program, Stanford University

Jay Keasling

CEO, Joint BioEnergy Institute and Professor, University of California, Berkeley

Neal Lane

The Malcolm Gillis University Professor, Rice University

Ed Lazowska

Bill & Melinda Gates Chair in Computer Science & Engineering, University of Washington

Richard Lester

Japan Steel Industry Professor, Head of the Department of Nuclear Science and Engineering, and faculty co-chair and founding Director of the Industrial Performance Center, Massachusetts Institute of Technology

Kathleen McGinty

Operating Partner, Element LLC

Arati Prabhakar

Partner, U.S. Venture Partners

Stanley Pruss

Partner, 5 Lakes Energy LLC

Burton Richter

Paul Pigott Professor in the Physical Sciences Emeritus, Senior Fellow Freeman Spogli Institute of International Studies, Stanford University; and Director Emeritus, Stanford Linear Accelerator Center

Arthur Rosenfeld

Distinguished Scientist Emeritus, Lawrence Berkeley National Laboratory

Janette Sadik-Khan

Commissioner, New York City Department of Transportation

Subir Sanyal

President and Manager of Reservoir Engineering Services, GeothermEx, Inc.

Maxine Savitz

General Manager, Honeywell/AlliedSignal (Retired)

Mark Stoering

Vice President, Portfolio Strategy & Business Development, Xcel Energy







NVCA Reaction to SEC Proposal to Define VC PDF Print E-mail

Jennifer Dowling

Written by Jennifer Connell Dowling   

Today the SEC voted unanimously to move forward on a proposal to define venture capital for the purposes of exempting such firms from SEC registration as directed by Congress in the Dodd-Frank Act.  The SEC staff provided a high level description of the proposal, which seeks to define venture capital investment based on several criteria including a lack of leverage and the non-public start-up nature of the companies in which we invest, rather than using a size-based criteria.  Finally there is a broad grandfathering provision so that only new funds must meet the definition. 

These parameters are all very consistent with the messages NVCA has conveyed to SEC staff and Commissioners about the industry in recent weeks.  We are awaiting details of the proposal and will be better able to share a complete reaction once we have that information. 





FDA Impact on Innovation Study Out Today PDF Print E-mail

Kelly Sloane

Written by Kelly Slone   

This morning a study on the FDA approval process for medical technologies was released by Dr. Josh Makower, consulting professor at Stanford Universityand CEO of ExploraMed.  NVCA along with the Medical Device Manufacturers Association (MDMA) supported the study which surveyed more than 200 CEOs at medical technology companies in the United States.  The survey found that due to inefficiencies at the FDA, innovative new medical devices are available to U.S. citizens on average two full years later than patients in other countries. In some cases, American patients wait as long as six years longer than patients elsewhere.  The study cites specific challenges faced by small innovative medical device companies seeking FDA approval for their technologies.  In the end, both American patients and the U.S. economy are negatively impacted.

The NVCA has long been an advocate for FDA reform in hopes of making the approval process for medical technologies more predictable, transparent and efficient.  We commend this study for quantifying what we have been hearing anecdotally for some time.  We feel the FDA shares our commitment to improving the current approval path and look forward to working with them to ensure that U.S. patients have access to safe medical innovations in a more timely manner.

To view Dr. Makower’s full white paper click here

To view slides on the study, click here.

To view the NVCA statement on the study click here

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