NVCA Declares "Capital Crisis for Start Up Companies"

This second quarter has the dubious distinction of being first since 1978 where there were no venture capital backed IPOs. The National Venture Capital Association has recently launched a public relations campaign to get congress to reduce post Enron accounting regulations on startup companies. “Venture-backed companies that successfully enter the public markets represent a critical job creation engine for the United States economy, and that engine has completely shut down,” said Mark Heesen, president of the NVCA. “We need to put regulators, legislators, presidential candidates, and the private sector on notice that this situation represents a serious problem that will have long reaching economic implications if not addressed. We view this quarter as the ‘the canary in the coal mine’.”

Given comments by Brack Obama in his Wall Street Journal Interview and campaign's director of economic policy, Jason Furman, to Larry Kudlow, it seems likely to be an issue in coming debates and feature prominently in his economic agenda. Venture capital firms like Kleiner Perkins have been actively attempting to increase their influence on Capitol Hill over the last few years and cultivating relationships with leading Democratic politicians like Al Gore. Support for tax breaks for venture firms is also likely to be well-recieved by congressional leaders, particularly Speaker Nancy Pelosi (D-CA, San Francisco).