Mark Heesen, president of the National Venture Capital Association, has applauded President Obama’s 15 June call to accelerate the transition to a clean energy economy.
He says the President remains committed to finding the most promising clean technology innovations and building companies around them, creating millions of US jobs and reducing the country’s dependence on foreign oil.
“However, we must be honest and clear in our assessment of the industry’s ability to continue long term investments in high risk innovations if Congress continues down the path of equating venture capitalists with investment managers rather than recognising them as company builders when it comes to tax policy,” says Heesen. “Increasing federally funded research in clean technology is critical – but those programmes will be for naught if there is insufficient venture capital investment to bring the technologies out of the laboratories and into the American marketplace.”
In his address, the President acknowledged that the transition to a clean economy will come “only if we rally together and act as one nation – workers and entrepreneurs; scientists and citizens; the public and private sectors.”
Heesen believes that now is the opportunity for the President to connect the dots between innovation, entrepreneurship and long term risk capital. By harming one of these elements, the entire clean technology ecosystem may be harmed, he says.
“The current tax structure has encouraged the venture capital industry to fund and grow the semiconductor, biotechnology, and internet economies. Now is the time for the clean energy economy. Yet Congress, with at least the tacit approval of the Administration, is in the process of changing a tax model that has worked for decades, making the US the envy of the world. We urge the Administration and Congress to be thoughtful in its current tax policy legislation and maintain a meaningful tax differential for long term investment in start-up companies. Otherwise, the acceleration for which the President is calling will come to a screeching halt," adds Heesen.
The NVCA represents more than 425 venture capital firms in the US.
