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Counterpoint from Matt Ocko (DCVC): https://twitter.com/mattocko/status/1005367508910596096 https://twitter.com/mattocko/status/1005367508910596096 1/ TL; dr:

Counterpoint from Matt Ocko (DCVC): https://twitter.com/mattocko/status/1005367508910596096 https://twitter.com/mattocko/status/1005367508910596096 1/ TL; dr: “Having gotten immensely rich in part due to a tax break, I now solemnly opine that it should be denied to others... with no consequence to me...” This is “pulling up the rope ladder behavior” - here’s why: 2/ Fred’s stance screws over underrepresented VCs the most... They are most likely to have smaller funds that - when they win (& I hope they do) - they have big carry events. They are then disproportionately taxed vs old white dudes living on big fees w/ cunning tax structures; 3/ and, every dollar coerced by the state from emerging women & PoC VCs for largely noise-level financial impact (vs killing Prop 13) and only really for political posturing means less $ to anchor their next fund’s GP commit, putting them at a fundraising disadvantage; and... 4/ ...smaller funds mean smaller mgmt fee, fewer women and PoC hired by those funds, and less reward for everyone from the partners on down - where a carry centric bonus/win for an associate might be hugely meaningful for their family.

pvg 8y ago
This isn't a tl;dr, you're pasting the entire contents of someone else's twitter thread into an HN discussion. That's confusing and generally not good since it's not your comment and that person is presumably not here to participate in the conversation.
- sincerely 8y ago
  The first tweet in the linked thread begins with "TL; dr:", it's not a statement by the comment author
harryh 8y ago
I'm not sure why Ocko is bringing women & PoC into the debate when they remain a very small minority of VC GPs. The minority is even smaller when you weight by AUM (and likely future gains) vs just counting the number of people. The fact is that a change to how carried interest was taxes would, by far, mostly affect older white dudes. I'll for hearing a legitimate counterpoint but this one strikes me as a fairly cynical manipulation.
- toomuchtodo 8y ago
  Right. Someone is going to miss out when you fix a loophole. You should still fix the loophole.
- klipt 8y ago
  > I'm not sure why Ocko is bringing women & PoC into the debate It's this generation's "think of the children!" Just like Prop 13 was passed via "think of grandma losing her house!"
ggg9990 8y ago
LOL. Suddenly a VC cares a lot about minorities.
tptacek 8y ago
If really the most persuasive argument for the carried interest deduction is that it prevents new entrants from becoming middlemen financiers, that bodes pretty poorly for the policy. An opinion that seems to be widely shared between conservative and liberal economists is that the financial sector is bloated. If the carried interest deduction serves to inflate it, that's actually by itself an argument to eliminate it.
- harryh 8y ago
  I'm sympathetic to this line of reasoning but we don't really measure the bloat of finance by number of people involved but instead by % of GDP consumed. Perhaps reducing new entrants to the field would reduce competition, raise prices and further bloat the field? (Just thinking out loud here.)
jadedhacker 8y ago
The policy is less about fairness to funds and more about fairness to the rest of the taxpayers (comprising >99% of the population).
adventured 8y ago
> They are then disproportionately taxed vs old white dudes living on big fees w/ cunning tax structures; As opposed to the young white guys that overwhelmingly dominate VC in that age group. What an obviously racist, bullshit statement. It's directly accusing Fred Wilson of being a racist (that his motivation is racial in nature), casually, like it's no big deal. It's nothing more than pandering to put that in as an argumentation point, it indicates intellectual weakness on the part of the author.
djur 8y ago
If the concern is about newcomers not getting a fair shake, why not just assess a one-time wealth tax on VCs with over a certain net worth and use some of it to establish a fund to lend to underrepresented founders? The current president of the US proposed a one-off 14.75% wealth tax on estates over $10 million. Maybe he should dust that one off.

pvg 8y ago

This isn't a tl;dr, you're pasting the entire contents of someone else's twitter thread into an HN discussion. That's confusing and generally not good since it's not your comment and that person is presumably not here to participate in the conversation.

sincerely 8y ago
The first tweet in the linked thread begins with "TL; dr:", it's not a statement by the comment author

harryh 8y ago

I'm not sure why Ocko is bringing women & PoC into the debate when they remain a very small minority of VC GPs. The minority is even smaller when you weight by AUM (and likely future gains) vs just counting the number of people. The fact is that a change to how carried interest was taxes would, by far, mostly affect older white dudes. I'll for hearing a legitimate counterpoint but this one strikes me as a fairly cynical manipulation.

toomuchtodo 8y ago
Right. Someone is going to miss out when you fix a loophole. You should still fix the loophole.
klipt 8y ago
> I'm not sure why Ocko is bringing women & PoC into the debate It's this generation's "think of the children!" Just like Prop 13 was passed via "think of grandma losing her house!"

ggg9990 8y ago

LOL. Suddenly a VC cares a lot about minorities.

tptacek 8y ago

If really the most persuasive argument for the carried interest deduction is that it prevents new entrants from becoming middlemen financiers, that bodes pretty poorly for the policy. An opinion that seems to be widely shared between conservative and liberal economists is that the financial sector is bloated. If the carried interest deduction serves to inflate it, that's actually by itself an argument to eliminate it.

harryh 8y ago
I'm sympathetic to this line of reasoning but we don't really measure the bloat of finance by number of people involved but instead by % of GDP consumed. Perhaps reducing new entrants to the field would reduce competition, raise prices and further bloat the field? (Just thinking out loud here.)

jadedhacker 8y ago

The policy is less about fairness to funds and more about fairness to the rest of the taxpayers (comprising >99% of the population).

adventured 8y ago

> They are then disproportionately taxed vs old white dudes living on big fees w/ cunning tax structures; As opposed to the young white guys that overwhelmingly dominate VC in that age group. What an obviously racist, bullshit statement. It's directly accusing Fred Wilson of being a racist (that his motivation is racial in nature), casually, like it's no big deal. It's nothing more than pandering to put that in as an argumentation point, it indicates intellectual weakness on the part of the author.

djur 8y ago

If the concern is about newcomers not getting a fair shake, why not just assess a one-time wealth tax on VCs with over a certain net worth and use some of it to establish a fund to lend to underrepresented founders? The current president of the US proposed a one-off 14.75% wealth tax on estates over $10 million. Maybe he should dust that one off.