Ted Schlein, a partner at Kleiner Perkins Caufield & Byers and chairman of the National Venture Capital Association, had words of advice Thursday for attendees at a venture industry conference in Hong Kong: Use the burgeoning influence of local Asian venture capital markets to fight policy moves that he said are hurting U.S. venture capitalists.
As reported by
Reuters, Schlein said regulatory costs of complying with Sarbanes-Oxley to prevent accounting fraud have raised the cost of going public. In an argument that may not be terribly appealing to promoters of emerging Asian markets, he said restrictive immigration policies have limited the ability of U.S. technology firms to access cheaper labor among students who have come from other countries to receive higher education. Schlein also urged investors to make their voices heard as policies are formed in Asian countries.
Kleiner Perkins has had a vested interest in maintaining a healthy market for entrepreneurship in Asia since launching a
$360 million fund in China with a team of veteran local investors in April.
Schlein said the U.S. has done some good things in public policy to support tech investment, but he characterized some of the regulation as overly stringent. He claimed that Sarbanes-Oxley compliance costs startups $1million to $2 million a year, raising the bar for how big a company must get to make a public offering feasible. But the VC acknowledged some advantages to forcing companies to achieve greater maturity before going to the public markets, perhaps in a nod to the lingering skittishness of U.S. investors the tech bubble collapsed.
"Is it better these companies are forced to be far more mature before they access the public markets? Probably in some cases," he said.
And in a note that may not seem to support the cause of greater startup activity in emerging markets, Schlein said U.S. immigration policies should encourage U.S.-educated foreign students not to return to their native countries. "Let's staple a green card to their diploma and keep them in the U.S. Why discourage them and have them go back home to go build their companies?" he asked.
- Clifford CarlsenSee Nov. 15 story from Reuters
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