NEWSFLASH: National Venture Capital Association Says Klobuchar-Cotton Bill Would Harm America’s Startup Ecosystem
By banning acquisitions of many venture-backed companies, the Platform Competition and Opportunity Act would be a “major disincentive to entrepreneurship,” says the National Venture Capital Association (NVCA) in their statement against the bill.
NVCA President and CEO Bobby Franklin explains: “Startups are the source of American innovation. Instead of embracing this activity, this bill discourages entrepreneurship by blocking many acquisitions even when there is no anti-competitive behavior. The entrepreneurial ecosystem strongly opposes this misguided policy and urges Congress to focus its energy on making the United States the best place in the world to launch a high-growth company.”
View the full statement here.
Meanwhile, earlier this month, former SEC economist Susan Woodward released a study that found the bill would discourage venture capitalist investment, harming a key source of funding for startups. The study also found that the legislation would have blocked 21 percent of the sources of spending on tech startups between 2002 and 2020.
And a 2021 Developers Alliance poll of the developer community found: “more than half of developers believe being acquired is beneficial to them, and an even larger percentage see the benefits to acquisition, even if they aren’t currently pursuing it. “
Read Springboard’s explainer on the startup ecosystem here.