The WSJ is reporting that Congress has rejected the Treasury’s plan to regulate venture capital firms as “systematic risks” to the US economy. This is good news to all my VC friends, and to the startup ecosystems that they finance. As I’ve mentioned before, I am against regulating venture firms as they do not create real risk to the banking and financial system because they do not aggressively use leverage. We’ll see what the Treasury comes back with, but there has to be some sort of a way to tell the difference between a hedge fund and a VC that is backing small companies.
