In a recent interview, venture-capital pioneer Arthur
Rock discussed his early days in the venture-capital industry and
why he’s now investing in corporate governance and education issues. He
also waded into a contentious debate about venture-capital carried
interest.
Carried interest is the profits that venture capitalists make on
their start-up investments. For years, such profits have been taxed at
the rate of capital gains taxes, which are currently at 15%. But there’s
been a move afoot by legislators to tax carried interest at the rate of
ordinary income taxes, which can go as high as nearly 40%.
The National Venture Capital Association and many venture capitalists from firms such as Scale Venture Partners and Kleiner Perkins Caufield & Byers have opposed the potential change, which is currently awaiting a legislative vote in Washington D.C. The NVCA says it’s possible that a higher tax rate could hurt the risk-taking among venture capitalists, among other things.
To read the full, original article click on this link: Arthur Rock on Venture-Capital Carried Interest - Digits - WSJ
Author: Pui-Wing Tam
