YouSaid · the spoken record
Bobby Goodlatte
- lines on the record
- 38
- first
- 2017-01-21
- most recent
- 2017-01-21
- sittings or episodes
- 1
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- podcast
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“People want to be a part of those discussions, you know, they should definitely plug in at the same time, certainly for all people out there who are doing the hard work of building businesses. Look, the most important thing still is to go build your business and do what you have to do. These things will happen one way or another, and you'll react to them and you'll do the things you have to do to run your business, but there's no substitute for actually building a successful business, regardless of what the political landscape looks like.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“You realize the point that the first two years of a new administration is when most big things happen. And so you think back over the last eight years of President Obama's term and now the next four years of President Trump's term, these next two years will be the most active in a decade span because the second term usually isn't as active as the first term. And so this next two-year period is when big things will happen and it's rare that you have that two-year period with the total control of one political”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's a really important point, but I just want to underscore that because a lot of people hear this stuff and they say, hey, look, this is kind of a way for people to kind of not have to follow the rules and stuff like that. Your point is exactly right, which is we've said this publicly as a venture capital from a lot of times. Going public is a really important thing for companies to do. And it's not just because it creates access to capital, but it's a good discipline around how do you think about really running your company in a way that's responsive to a very broad cross-section of public investors. And so everything that we're talking about here, whether it's long-term stock exchange or some of these other ideas, this is not to say, hey, let's have a sloppy public market. The idea is, hey, we can do this and we ought to have that discipline of being a public company, but let's make sure that people understand the incentives and align the incentives around more long-term behavior as opposed to short-term behavior.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Eric is working with a lot of folks in DC to think about this concept of he calls the long term stock exchange. But again, similar idea, which is how do we incent both management teams and employees as well as incent shareholders to kind of think longer term around these product cycles as opposed to the daily and minute by minute by minute by-min”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“For tech companies, look, these are product companies, right? Because they're product samples, they have things called product cycles. And, you know, revenues go up in those cycles, but then there's times where you have to invest more R&D to kind of get to that next product cycle. And as a public company, it can be challenging sometimes because by definition, those investments are dilutive to your earnings in the short term, with the hope, of course, that they create long product cycles that are very positive from earnings. And so these kind of exchanges that might better orient and take into account the fact that we're trying to accomplish a long-term goal and how do we affect trading and other stuff. You know, there's somebody who I'm sure many people have heard from Eric Rees, you know, who's very famous for the lean startup activity he did.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Another thing we talked about the on ramp to the public markets, there are a number of people that are trying to think about is there a better place by which these small cap companies could go and be on an exchange that looks different than those exchanges where the largest companies are? The idea is that the companies that would be listed on this exchange might have sort of a different set of rules. For example, it might be more long-term in nature as we think about it as opposed to high-frequency trading or quarter to quarter results or things like that. And there might be benefits to which people that were trading on this type of exchange might be saying to those companies, look, we want you to think more long term and not just about what your earnings are this year or that year.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Due to that. Whereas, look, if you own Apple or Google Stock, we could trade $100,000, $10,000. It's not going to move the price very much because there's so much volume happening in those trades. So the big picture theory behind the tick size pilot was, are there ways to kind of constrain the pricing around how these things work and limit the increments at which people trade so that you kind of get a lot more volume at fixed price points? And that helps alleviate some of this kind of illiquidity problem that you have”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, right. And then when I try to sell on the other end, right, every time I try to sell, I'm going to drive the stock price down because it's not a very liquid market. There's not a lot of transactions.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“The big picture idea behind the tick size pilot was if you could improve what's called the trading liquidity for the stock, right? So kind of make these things more liquid in the sense that one of the reasons why institutions don't want to buy these stocks is because if the stock's trading at a dollar and I go in and buy 100 shares, I'm going to probably drive the stock price up to $2 or $3 just because my small...”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“It's obviously a smaller company. Right, which makes a lot of sense. Another recurring theme besides the incentives so far is this idea that there's no one size fits all. And it really depends on company size to a great extent, which is really the difference between a startup and a big company at the end of the day.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Analogy before. About Sarbox. That's exactly right. Once you're on the freeway, what's it like to be a public company? And you're right. One of the areas that they did was to kind of, again, right-size the regulatory requirements as it relates to Sarbanes-Oxley for what is appropriate for a company that is obviously a smaller company. Right”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, one very concrete example comes to mind for me is, wasn't there a provision of the Jobs Act that you don't have to comply with Sarbanes-Oxley until a certain point? Because in the past, tiny startups would literally not have the kind of regulatory apparatus in place to do all the paperwork. And they're trying to like build their freaking business for God's sake. And they don't even have the kind of scope that you're talking about. That Sarbanes-Oxley was intended to help regulate. But now they have like a little bit of a little bit of runway to use your on-ramp analogy before they have to actually worry about Starbucks.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. And one of the things that was called for in there, and it's currently being done right now, was let's do a pilot project and see if we went back to tick-size trading, meaning we went to decimalization. And so stocks are traded at pennies as opposed to the old way at a certain tick size. Is there anything else to improve the on-ramp?”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“The other thing that the Jobs Act did was it looked at, well, okay, once you're on that public, you've gone on the on-ramp, you're on the highway, how can we make it smoother to be successful on that highway?”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Been there before. The SEC was very worried about this idea, which is are you trying to kind of hype your IPO before it goes out and kind of, you know, tell people how wonderful you are, but without the full benefit of all the documentation and everything else that would allow them to make an informed decision. But what the SEC, I believe rightly so, said is, hey, look, in a limited context, it's okay for you to go talk to the research analysts at Fidelity or at T-Row Price or others and get feedback from them on how you're thinking about the business and how they as public market investors might think about it. So if you kind of put all that together analogy, that works quite well, which is as you're going on to the freeway to the IPO, how do we get rid of the potholes and make it a much smoother drive on that on-ramp?”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Simple way to think about the Jobs Act, and there were lots of people who were involved in that is think about it as kind of how do we improve the on-ramp to getting onto the freeway, that is, the IPO. There's a lot of things you have to do, right? You have to do all kinds of filings. And one of the things that JobDAC did was kind of modify the regulatory requirements around those filings to kind of right-size it for what is appropriate for an earlier stage company instead of what might be appropriate, for example, for a GM or a Goldman Sachs or a Ford companies who do this. The other thing the Jobs Act did, and we see this today for those of you who follow this, is this concept of confidential filings that companies can do. So in the old days, companies, when they were going to go public, they would file with the SEC. And then while they were waiting for the SEC to kind of green light them to go do their process, their filing was out there in the public domain. And so lots of their competitors would kind of take pot shots at them, but the company were in what was called a quiet period, which is the SP that allowed it, right? So it's kind of like, you know, fighting with one hand tied behind your back. And what the confidential filing.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it's a really interesting testament to just the formation of law and regulation in general is ever evolving as things, you know, unintended consequences, as Bobby talked about, intended consequences, finding things out, kind of figuring things out as you go. It's a super fascinating process. Back to the Jobs Act though, because we hear a lot about it. I'd love you to actually break down what is a jobs act, the high level, why it matters. We hear so much about it.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“But it's an interesting. This is a really risky asset class, right? So we want to be careful that we don't have people losing money that they actually really, truly need. And then there's some other regulatory things which are still working their way through it.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“That is a really interesting kind of opportunity, actually, because it's a sort of democratizing venture capital and new company formation in a way. Yeah. And I understand that there are concerns as well. It's a new thing. So there's probably a lot that needs to still happen. But it's an interesting”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Right, but so the idea, one of the ideas behind the crowdfunding rules is to allow people who may not yet be at that state of financial success, but to be able to say, hey, look, I'm going to try and, you know, figure this stuff out and in limits. So there are constraints on how much money you can invest if you're not accredited, which is probably a smart thing to do.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“That's exactly right. There's the idea behind the new crowdfunding rules that are coming out in the Jobs Act is number one is allowing people who are what we call unaccredited investors, basically, right? Accredited investor really just basically means you're rich. Is it a simple way to describe it?”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“In that category. Potential growth, which is amazing. That's certainly true if you look at the numbers, right? You know, I think it's like 95, 96% of people in the US, the only access they have to capital appreciation is through the public markets. And so if all of this growth is accruing to the benefit of, quite frankly, largely wealthy institutions who can afford to invest in venture capital as an asset, then you're right. You kind of leave out a very, very broad cross-section of people to be able to benefit from hopefully what is appreciation in their 401k accounts and other retirement accounts and things of that sort.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“I was also just going to say that the difference between MA and an IPO is that a broader swath of the American public gets to participate in that capital. Like you get to invest in a Google, whereas before you would have no access to that potential growth, which is amazing.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Since you brought up the J word when companies are public, they generate jobs at a much faster pace than when they stay private because as a public company, you've got access to a very, very broad base of money out there to fuel your growth.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Companies do die. They do fail. And so we have to think about how are we creating more companies. And part of creating more companies is having an opportunity for those companies to graduate and go do something else, right? Or get bigger, like the Jobs Act a couple of years ago, what could the next Jobs Act look like?”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right. We have a lot of stuff Companies are not going public either at the size and scale that they used to, which is many companies used to go public at an earlier stage in their life cycle. And we have a smaller number of companies.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“That's exactly what we're saying. Let's start from the premise that as a general better, it's a good idea for competitiveness for the U.S. economy, for us to be investing in R&D and trying to build new technologies. And that creates jobs. And that's what creates obviously broader equality and everything else in the world. And so what are the things that government can do to, number one, hopefully at least not disincent that activity and then to actually encourage activity, which we all agree is actually net positive. Believe it or not, actually tax policy can incent behavior. Another really interesting area that we should talk about is kind of this concept of capital formation and capital markets, right? And to give everybody a broader context, we got two things going on in the US. One is the number of publicly listed companies continues to fall. And if you look at the numbers kind of over the last 20 years, the number of companies in the public markets is closer to 3,500 to 4,000 today versus 7,500 to 8,000 about 20 years ago. We probably shouldn't debate how we got here.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“So, my understanding is that there's not a one size fits all. I mean, yes, there might be some good reasons for not having large companies do sort of the shake and bake with their P&L. But for small companies, you might want to think about this case where, by the way, you do want to incent, because it really boils down to incentives at the end of the day.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“For startup companies who are doing all the things that we would want them to do, hiring all this stuff. And so for them to take this haircut, so to speak, when they are being acquired just doesn't make sense. It does in the context by which those rules were passed, but it's an unintended consequence on the entrepreneurial ecosystem.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Years ago, there was an effort in Washington to limit what those losses, how they could be carried forward to an acquiring company or change of control, which could be in our case a new financing round. But the purpose of that was really to get at a lot of established companies buying what you might want to refer to as a zombie company. And they were simply doing it to lower their taxes. So there were all these net operating losses on the books. And so another company would come in. And it was purely for a tax benefit. And so Congress and others went in and said, okay, we're going to limit how much you could do it. So they put all these tests and rules in there. And once again, it's thinking about established companies and what happens and the unintended consequence of that was to make it more difficult.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Potential benefits don't necessarily only apply to venture backed startups. It would apply to any small and medium sized business, a mom and pop business, a family-owned business, a three-person business. And it would any basically non-large for-profit entity.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“It's a great example that. And limitations, there are a lot of very technical rules in the tax code, as I said, that were really developed and thought about when they're thinking about some big company that's already turned a profit. How can we make it equally important for those startups to benefit?”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Know if you're a startup, right? What's the most critical resource you have? It's basically your cash, right? And every conversation, of course, we have with our companies is how do you get to the next milestone, understand the fact that you've got limited amount of cash. So one of the things we could do from a capital formation perspective is think about things like R&D tax credits, for example. So, for example, in Canada today, many companies, when they hire engineers, they're able to deduct a lot of the expenses associated with those engineers from their taxes.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Have to recognize Washington is really a big company town. I mean, if you think about it, once you become a big company, you're going to have a Washington office. You're going to have a lot of folks running around. And when you have so many voices talking to policymakers on the tax writing committees about what's important to this Fortune 500 company or that Fortune 500 company, it tends to sort of drown out everything else. And I think that's one of the biggest challenges for the startup community is until you get to be a big company, you don't have the resources to really engage in this, we have to make sure that as policymakers are thinking about tax reform, that we don't forget that tax reform could be used to encourage capital formation and entrepreneurs to take risks.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“But if we kind of drop down to our ecosystem, the broader venture ecosystem, we think about kind of younger early stage companies, how do you think about kind of what, if anything, might be of interest for people to follow?”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“And three, no more than three can be from the same political party. So the way you think about it is whoever is the occupant of the White House will get three picks. Now there are staggered terms, et cetera, but they'll likely be three Republicans, commissioners at the SEC, the FCC, the FTC on privacy and other tech-related issues. So that's how we think about staffing up a new administration.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Sure. Well, obviously, who is running the Department of Treasury has a lot to say about tax reform. I mean, that's where the IRS sits under. That's where the Assistant Secretary of Tax sits. So when the administration weighs in on what they would like to see in tax reform, that's the department that will come forward. There are also these independent agencies like the Securities and Exchange Commission. So when we're thinking about rules around capital markets and we're thinking about crowdfunding and we're thinking about what that on-ramp and the IPO market looks like, a lot of things happen at the SEC. And the SEC Securities and Exchange Commission, like the FCC, Federal Communications Commission, typically are what are known as independent agencies with five commissioners.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely right. The NVCO is created in the 70s and we're the lobbyists for this industry. So when you think about a transition and a new administration coming in and what happens in the first few months and what happens first 100 days and six months and 12 months, what we know is for a four-year presidential term, the first two years are where the big things happen. And then the next two years is when you're thinking about running for a second term. So from the White House perspective, having a new administration, it's first all about your cabinet picks. So we're in the midst today of all of the confirmation hereings in the Senate for cabinet picks. And that's what all the talk is. Deputy Assistant Secretary. So the staffing up, at least at the political level, which is the leadership level of agencies and departments takes some time.”
2017-01-21 · a16z Podcast · a16z Podcast: Of Policy, Capital, and the Startup Ecosystem · IDENTIFIED FROM THE TRANSCRIPT · source