
Venture Capital industry at risk: it&#8217;s getting serious - szczupak
http://www.businesshackers.com/2007/06/23/venture-capital-industry-at-risk-its-getting-serious/
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natrius
"That's very bad news for the VC industry, as high taxes will probably result
in a decrease in interest in this kind of investments."

From my understanding of the law, it won't do this. VCs get paid a cut of the
profits of the fund, which is (mostly) other people's money. I don't see why
those should be classified as capital gains when they're not making money as a
result of their own investment. They're making money as a result of doing
their jobs, and should be taxed on it just like everyone else. This won't
affect how much investors put into VC funds, since that will still be
classified as capital gains. It will just make working for a VC firm a little
less profitable.

I don't see why VCs should be exempt from the rules everyone else has to play
by.

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iloveyouocean
I believe this validates your point. From the pmarca(Mark Andreesen) blog post
"The truth about VC, part 2"

How to Make a Venture Capitalists Head Explode:

Point out to her that her compensation from carried interest should be taxed
as ordinary income, not capital gains, since she's receiving a fee for service
and it's not her capital at risk.

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donna
I'm curious about what a loop-hole might look like. I am not sure of what I'm
asking however I'm putting it out there. Could a VC investment somehow become
more like accumulated loss toward operations cost, therefore enabling them to
write it off and receive a refund??? Way over my head, but am interested in
the spin.

