June 18, 2021

Antitrust: VCs Stressing Out Over Federal Antitrust Legislative Initiatives

According to a recent NVCA newsletter, the venture capital industry is pretty worried about the prospect that the antitrust legislation currently floating around the nation’s capital might actually become law.  Here’s an excerpt:

Several recently proposed antitrust bills in the U.S. would restrict the ability of large technology companies to make acquisitions. That, in turn, would discourage venture investors from making deals, hurt their returns and decrease the number of new venture funds, says a new report funded by the National Venture Capital Association. A venture-backed company is about ten times more likely to be acquired than to go public, according to the NVCA.

“We are very concerned that these restrictions on acquisitions will at least partially, if not completely, shut off that avenue of exit,” said Jeff Farrah, general counsel at the NVCA, in a call with media on Monday.

The NVCA took aim at the Competition and Antitrust Law Enforcement Reform Act, sponsored by Sen. Amy Klobuchar (D. Minn.); the Trust-Busting for the Twenty First Century Act, sponsored by Sen. Josh Hawley (R. Mo.); and the Platform Competition and Opportunity Act, sponsored by Rep. Hakeem Jeffries (D., N.Y.) and introduced Friday.

Speaking of antitrust legislation that dealmakers are guaranteed to hate, remember that New York “mini-HSR” legislation that I blogged about a few months ago?  This White & Case memo says it’s still bouncing around the state legislature, and that it has a chance to become law.

John Jenkins