While government may seem a completely separate subject from entrepreneurship, the former can affect the latter in big ways. According to Techcrunch, the EU is considering rules that would significantly harm the venture and therefore startup community. While this blog normally covers developing world startup issues, this is a perfect example of government intervention that burgeoning as well as industrialized economies should seek to avoid. Mike Butcher of TC writes:
The European Union’s proposed Alternative Investment Fund Managers Directive sounds relatively innocuous. But its impact could have far reaching consequences for Europe’s emerging startup tech scene, imposing higher costs, red tape and put off most institutional investors from investing in VC funds. The Directive could – to be blunt – completely shaft VC, and thus venture backed startups in Europe.
The AIDM Directive is part of wider moves by the European Commission to regulate the ‘riskier’ end of the financial system. But in seeking to impose greater transparency and accountability on hedge funds and private equity firms, like a cod trawler killing dophins, this drag net could destroy the early stage investment scene in Europe.
TC also includes a call to action to help prevent this disaster:
The European Venture Capital Association is calling on European entrepreneurs to lobby the EU and sign a petition it has drawn up against the Directive.
The idea is to email them and thus become a co-signatory to a letter they are sending to the EU.
To do this you can send a mail to email@example.com stating name, company name, HQ location. Use the subject line “Entrepreneur Petition against AIFM Directive”
So far 483 VCs and startups have signed the letter.
Tonight (Sunday night, April 25) is the deadline.
If you happen to be in Europe, I’d encourage you to sign the petition. If you are a government official or involved in the startup scene in the developing world, be aware of the impact your government can have on entrepreneurship. Governments that are trying to promote entrepreneurship should be especially on top of any other laws and regulations that might inadvertently cancel the effects of any positive policies.