Antitrust reform could impact VC & startups in a big way.

New proposals restrict acquisitions and as drafted could make it harder for VC-companies to be acquired; impacts FAR more than FAANG acquirers.

Here is how:

Sen. Klobuchar's bill (CALERA) calls out acquisitions that pose "significant risks to competition" and shifts the burden to the parties to "prove" the acquisition does "not create an appreciable risk of materially lessening competition." These categories are directly VC lane:

Acquisition where the acquiring party has market cap of more than $100 billion & the acquisition is for $50 million or more. That pulls in a TON of VC-backed company acquisitions. And the text appears to pull in CVC minority investments as well if it meets the $100b/50m test

Burden shifting would also occur for acquisitions of "nascent competitors by a dominant firm" or "a disruptive firm by a competitor." These terms are not spelled out in CALERA but are implicit in antitrust law so will take time to determine full impact.
https://tinyurl.com/3apcnrzj 

Beyond CALERA, the House Judiciary staff report on digital markets competition recommends antitrust law "look unfavorably upon incumbents purchasing innovative startups [by] codifying a presumption against acquisitions of startups by dominant firms."
https://tinyurl.com/298boz9a 

. @nvca is engaged with lawmakers - we're discussing the importance of acquisitions to the entrepreneurial ecosystem and recycling effect that often happens where founders post-acquisition go on to found new companies or become angels or VCs and support new company formation.

Last year there was a ~10:1 ratio of acquisitions to IPOs. Occurring against backdrop of it being harder for companies to go public: small cap IPOs are rarer; companies undergoing IPO in last decade had average age of 10.7 yrs as compared to 7.5 years in 80s & 8.5 yrs in 90s. END