back to article VCs to Trump: You know what would really make America great? Tax breaks for VCs

A group of venture capitalists are asking US President-elect Donald Trump to implement a series of tax cuts and policies they say will bring more funding for startups. In a letter (PDF) to the real-estate mogul turned-politician, the National Venture Capital Association (NVCA) asks for tax breaks for ventural capital companies …

  1. Ole Juul

    two sides

    There is something to be said for encouraging investment in startups, but we must not forget that there is money in the VC business even when a startup fails. Could this suggestion end up making the VC business more profitable without startups actually gaining much ground? I note that liquidation preference is designed to protect an investor's capital.

    1. Blank Reg

      Re: two sides

      Another way is to eliminate tax advantages for capital gains from the secondary stock market. The secondary market does little to help the economy outside of the financial institutions skimming their fees for all those transactions.

  2. Anonymous Coward
    Anonymous Coward

    Instead, how about we simplify both the corporate and individual tax codes and tighten down H1-B programs that are abused to replace American workers?

    1. Mark 85

      I quite agree, but the VC's seem to want the H1-B program expanded and made "easier"...

  3. Anonymous Coward
    Anonymous Coward

    Tread carefully Mental Jujitsu in play

    This from those people who brought us Uber?

    That ride sharing program who's sole objective is to buy market share at almost any cost, and ignore all local regulations whist doing so. When monopoly is achieved monopoly pricing will result, up until it can replace drivers with autonomous vehicles.

    I don't think allowing those guys a bigger tax write off is a good thing.

  4. Anonymous Coward
    Anonymous Coward

    90% of start ups go bust - blah blah blah

    So it's a deductible loss 90% of the time, and already is a tax break as per the non payment of Income Tax by President Elect Trump.

  5. Pascal Monett Silver badge

    And so it starts

    This is just a "hey buddy" call. It's obvious that these VCs look at the President Elect, see a billionaire, and imagine him razing all those pesky rules that prevent them from becoming trillionaires overnight.

    There will be more of this, every time served with an excuse to make people think it is "for the good of the American worker", even though the only "worker" they're thinking about is themselves.

    In the linked PDF, there's no less than 3 paragraphs on how to reform immigration rules to allow more skilled labor in. A passing mention to illegal immigration is made to confuse the readers into thinking the argument is valid. America's immigration rules have always been about limiting immigration to skilled labor only. There is no need to "Encourage talented immigrants to build or work at American startups", they're beating their heads at the door already.

    I sincerely hope that this disastrous election will not result in the complete destruction of the legal framework that has been 200 years in the making. Unfortunately the bull is in the china shop now, so hope is all that remains.

    1. Fatman
      Joke

      Re: And so it starts

      <quote>Unfortunately the bull is in the china shop now, and the ropes come off on January 20th, so hope is all that remains.</quote>

      Edited for additional clarity.

  6. graeme leggett Silver badge

    "loosened regulatory controls on medical companies"

    Now what could go wrong there?

    Or have I overlooked how this will reduce healthcare bills for all and make America great again

    1. herman

      Re: "loosened regulatory controls on medical companies"

      Well, what doesn't kill you makes you stronger - and people who die don't sponge on society, so loosened regulation tends to kill several flies in the ointment with one swat...

    2. Anonymous Coward
      Anonymous Coward

      Re: "loosened regulatory controls on medical companies"

      Yeah, "loosened" isn't quite the word I'd use.

      Fewer, clearer, less onerous regs would be great - IF swiftly and fairly enforced.

  7. a_yank_lurker

    VCs?

    Given Blowhard's appointments and background I doubt this will happen. The VCs are typically looking for the next Chocolate Factory or Slurp to make fortune when the IPO is done. Blowhard comes from real estate which require an income to payoff the construction loans and make money. Often the rents come from small to mid size businesses for commercial or hotel guests for casinos and resorts. It is a different type of play, much more long term and requires the middle and working classes to have a decent amount disposable income to pay the rents or visit the resorts for many years. Thus Blowhard's concern about Americans having good paying jobs that will be around for many, many years. Otherwise, who will pay the rents or visit the resorts?

    The VC game is borderline pump-and-dump stock fraud were one finds a company that might have viable product/idea build them up to cash out at the IPO. Much shorter term play and often does not require the company to be successful after the IPO. Theranos is an almost perfect example of many of these plays, a dubious business idea hyped as the next great thing. Get ready for an IPO and sell out at the IPO. If timed right, the company can go under a few years later and they get to key their money.

    1. Yet Another Anonymous coward Silver badge

      Re: VCs?

      Fortunately Hedge fund managers paid for Trump and have been rewarded with all the cabinet posts. And of course Hedge funds, unlike VCs, have a long term worker-centric view of the economy.

      1. veti Silver badge

        Re: VCs?

        Mercifully for us all, "cabinet posts" are pretty much irrelevant in American government. Unlike the UK version, US cabinet ministers have nothing resembling actual power. The post is basically a well-paid and prestigious sinecure given out as a reward for faithful support.

        Who does matter is the people who surround the president personally. Watch out for announcements of people with titles like "chief of staff", "chief strategist", "appointments secretary".

        They'll tell you what particular flavour of scum will really be running the show.

  8. Anonymous Coward
    Trollface

    If I were Trump

    I'd say... "Thank you, Mr. Thiel, for what you did to Gawker. I cannot in good conscience honor this request, but I'll find some way to thank you for your service. The rest of you, go **** yourselves!!"

    1. bombastic bob Silver badge
      Devil

      Re: If I were Trump

      I'd add that he's already planning on lowering the top tax rates, which is going to have an even BIGGER effect on boosting the economy and startup businesses.

      After all, if you have a potential to win BIG with a VC investment, your odds of it being "worth while" improve quite a bit when your tax rates on 'the big money' are lower...

      Anyway, targeted tax breaks are how politicians empower themselves. We need *LESS* of that. And less regulation. And more freedom. *THAT* will work!

      Bush Jr's biggest problem was *TARGETING* his tax cuts, i.e. *NOT* fixing the *REAL* problem. So their effect was limited. Had they been significant rate reduction for *EVERYONE* and not just "families with kids under 13" or whatever, we'd all have been better off.

      1. quxinot

        Re: If I were Trump

        Bush Jr's biggest problem was rather more fundamental than you describe, sir.

        1. Adrian Tawse

          Bush Jr's biggest problem was rather more fundamental than you describe, sir.

          Bush jr was a dick head. He had the foreign policy appreciation of the village idiot. And, in spite of all his protestations, the invasion of Iraq was all about grabbing oil. In even that he failed. He was advised by self serving idiots, including, I am deeply ashamed to say, Tony Blair.

  9. Anonymous Coward
    Anonymous Coward

    Yeah, right

    Of all Trump's policies, the one I don't see him doing a U-turn on is making it harder to hire non-Americans.

  10. Winkypop Silver badge
    Devil

    Only little people pay taxes

    Hey Mr Trump?

    1. Adrian Tawse

      Re: Only little people pay taxes

      And only, it would appear, their honest liability. I found it quite shocking that Trump should find it a source of pride, that he should boast that, having shamelessly cheated students at the Trump U, he should get out of paying fair recompense. Here is a man completely devoid of any morality or any sense of shame.

  11. Anonymous Coward
    Anonymous Coward

    There's TOO MUCH funding for startups

    Look at the crazy valuations, there is too much money chasing them already. We don't need to encourage even MORE money being put to develop Yet Another Useless App (i.e. copies of what is already out there) or create another Overhyped Buzzword of the Year product (i.e. let's fund more VR or IoT startups)

  12. Howard Long

    VCs: listen up!

    I have a way VCs can do just fine with the talent already at home. Work a bit harder on your due diligence skills before you piss away other people's money on fundamentally flawed projects when looking for your next unicorn.

    Oh, such short memories. Anyone remember Theranos? I am not one for regulation, but the VC "industry" is crying out for it. If ever there were a bunch of suits lining themselves up for negligence claims it's the VCs.

    If the talent is so much better overseas then invest there. But it's not better. It is cheaper though. Funny that.

  13. John Smith 19 Gold badge
    Unhappy

    Is anyone thinking "Corporate welfare" ?

    Or is that just me?

  14. Anonymous South African Coward Bronze badge

    Rather give tax breaks to startups and small corps, big corps can pay their just dues, after all, they have bigger contracts and the such...

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