Venture Capital industry at risk: it’s getting serious

Posted on June 23, 2007
Filed Under Economic/Business news |

Matt Marshall from VentureBeat has written a post that you should really read. In a nutshell that’s what he wrote:

“U.S. Congressman Sandy Levin (D-Michigan) has finally introduced the bill that venture capitalists were dreading: A higher tax on their profits.
If it passes, and there’s a possibility it may, it will change the tax treatment of carried interest, or profit that VCs and other investment professionals get from their investments. The change would tax that profit at a much higher rate — by treating it as ordinary income, rather than as capital gains, which draws a mere 15 percent tax rate“.

That’s very bad news for the VC industry, as high taxes will probably result in a decrease in interest in this kind of investments. Many startups that we write about are financed by VC. In the nearest future we are going to cooperate with a well known VC to support you guys develop projects and receive appropriate funding; time will tell.

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Comments

One Response to “Venture Capital industry at risk: it’s getting serious”

  1. Stephen Larson on June 24th, 2007 4:38 am

    I can’t stand the spin being put on this. It is only the managers that will pay the higher rate, not the investors in the funds.

    The managers compensation and only their compensation will be taxed at the higher rate, which is the way it always should have been.

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