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Venture Capital industry at risk: it’s getting serious
- donna 19y agoI'm curious about what a loop-hole might look like. I am not sure of what I'm asking however I'm putting it out there. Could a VC investment somehow become more like accumulated loss toward operations cost, therefore enabling them to write it off and receive a refund??? Way over my head, but am interested in the spin.
- natrius 19y ago"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." From my understanding of the law, it won't do this. VCs get paid a cut of the profits of the fund, which is (mostly) other people's money. I don't see why those should be classified as capital gains when they're not making money as a result of their own investment. They're making money as a result of doing their jobs, and should be taxed on it just like everyone else. This won't affect how much investors put into VC funds, since that will still be classified as capital gains. It will just make working for a VC firm a little less profitable. I don't see why VCs should be exempt from the rules everyone else has to play by.
- iloveyouocean 19y agoI believe this validates your point. From the pmarca(Mark Andreesen) blog post "The truth about VC, part 2" How to Make a Venture Capitalists Head Explode: Point out to her that her compensation from carried interest should be taxed as ordinary income, not capital gains, since she's receiving a fee for service and it's not her capital at risk.