Jan 2, 2019 · 23m · a16z

a16z Podcast | Of Policy, Capital, and the Startup Ecosystem

Scott Kupor · 9m spoken Bobby Franklin · 8m spoken Sonal Chokshi · 4m spoken
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In this episode of the a16z podcast, Scott Kupor of Andreessen Horowitz and Bobby Franklin of the National Venture Capital Association analyze how Washington policy, tax code reform, and capital market regulations impact startup formation and economic growth.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The host holds 18.7% of the talking time here. How this is scored →

The host as informed peer 4.6 Guest teaching 3.7 Guest disagreement 0.3 The host pushing back 0.3
05100:0010:0020:000:27–3:00 · The host as informed peer 4/10 Impact of Elections on Capital Markets and Washington Realities Sonal makes an insightful connection between modern capital bank debates and historical precedents from the Hamilton biography. Scott and Bobby explain how post-election excitement gives way to Washington legislative realities.3:00–6:07 · The host as informed peer 3/10 Washington Mechanics, Administration Timelines, and Key Agencies Sonal gently frames Bobby's background with a full disclosure note that NVCA is a lobbying group. Bobby educates the hosts on the mechanics of presidential appointments and agency commission compositions.6:07–10:50 · The host as informed peer 5/10 Tax Reform, R&D Credits, and Net Operating Loss Penalties Scott and Sonal articulate R&D tax credit mechanisms using Canada's model. Bobby details how Net Operating Loss (NOL) tax rules designed to stop corporate 'zombie' acquisitions created unintended penalties for startups.10:50–14:26 · The host as informed peer 6/10 Capital Formation, Shrinking Public Markets, and Crowdfunding Sonal cites internal a16z research on shrinking public markets and argues that IPOs allow broader wealth participation than M&A. Scott gently corrects Sonal's misconception that accredited status requires a test rather than wealth thresholds.14:26–18:22 · The host as informed peer 7/10 Breakdown of the JOBS Act: IPO On-Ramp and Sarbanes-Oxley Sonal demonstrates strong familiarity with federal policy by proactively introducing the Sarbanes-Oxley regulatory exemption provision under the JOBS Act. Scott and Bobby elaborate on the IPO on-ramp mechanisms.18:22–22:18 · The host as informed peer 5/10 Public Market Liquidity, Tick Size Pilots, and LTSE Sonal openly asks for clarification on tick size pilots, leading Scott to explain trading liquidity dynamics. Sonal later synthesizes the core value proposition of long-term stock exchanges.22:18–23:51 · The host as informed peer 2/10 Strategic Advice for Founders and Final Thoughts Bobby outlines why the two years following an election present a critical window for policy action. Scott advises founders to stay focused on execution regardless of political shifts.0:27–3:00 · Guest teaching 3/10 Impact of Elections on Capital Markets and Washington Realities Sonal makes an insightful connection between modern capital bank debates and historical precedents from the Hamilton biography. Scott and Bobby explain how post-election excitement gives way to Washington legislative realities.3:00–6:07 · Guest teaching 5/10 Washington Mechanics, Administration Timelines, and Key Agencies Sonal gently frames Bobby's background with a full disclosure note that NVCA is a lobbying group. Bobby educates the hosts on the mechanics of presidential appointments and agency commission compositions.6:07–10:50 · Guest teaching 5/10 Tax Reform, R&D Credits, and Net Operating Loss Penalties Scott and Sonal articulate R&D tax credit mechanisms using Canada's model. Bobby details how Net Operating Loss (NOL) tax rules designed to stop corporate 'zombie' acquisitions created unintended penalties for startups.10:50–14:26 · Guest teaching 4/10 Capital Formation, Shrinking Public Markets, and Crowdfunding Sonal cites internal a16z research on shrinking public markets and argues that IPOs allow broader wealth participation than M&A. Scott gently corrects Sonal's misconception that accredited status requires a test rather than wealth thresholds.14:26–18:22 · Guest teaching 2/10 Breakdown of the JOBS Act: IPO On-Ramp and Sarbanes-Oxley Sonal demonstrates strong familiarity with federal policy by proactively introducing the Sarbanes-Oxley regulatory exemption provision under the JOBS Act. Scott and Bobby elaborate on the IPO on-ramp mechanisms.18:22–22:18 · Guest teaching 5/10 Public Market Liquidity, Tick Size Pilots, and LTSE Sonal openly asks for clarification on tick size pilots, leading Scott to explain trading liquidity dynamics. Sonal later synthesizes the core value proposition of long-term stock exchanges.22:18–23:51 · Guest teaching 2/10 Strategic Advice for Founders and Final Thoughts Bobby outlines why the two years following an election present a critical window for policy action. Scott advises founders to stay focused on execution regardless of political shifts.0:27–3:00 · Guest disagreement 1/10 Impact of Elections on Capital Markets and Washington Realities Sonal makes an insightful connection between modern capital bank debates and historical precedents from the Hamilton biography. Scott and Bobby explain how post-election excitement gives way to Washington legislative realities.3:00–6:07 · Guest disagreement 0/10 Washington Mechanics, Administration Timelines, and Key Agencies Sonal gently frames Bobby's background with a full disclosure note that NVCA is a lobbying group. Bobby educates the hosts on the mechanics of presidential appointments and agency commission compositions.6:07–10:50 · Guest disagreement 0/10 Tax Reform, R&D Credits, and Net Operating Loss Penalties Scott and Sonal articulate R&D tax credit mechanisms using Canada's model. Bobby details how Net Operating Loss (NOL) tax rules designed to stop corporate 'zombie' acquisitions created unintended penalties for startups.10:50–14:26 · Guest disagreement 1/10 Capital Formation, Shrinking Public Markets, and Crowdfunding Sonal cites internal a16z research on shrinking public markets and argues that IPOs allow broader wealth participation than M&A. Scott gently corrects Sonal's misconception that accredited status requires a test rather than wealth thresholds.14:26–18:22 · Guest disagreement 0/10 Breakdown of the JOBS Act: IPO On-Ramp and Sarbanes-Oxley Sonal demonstrates strong familiarity with federal policy by proactively introducing the Sarbanes-Oxley regulatory exemption provision under the JOBS Act. Scott and Bobby elaborate on the IPO on-ramp mechanisms.18:22–22:18 · Guest disagreement 0/10 Public Market Liquidity, Tick Size Pilots, and LTSE Sonal openly asks for clarification on tick size pilots, leading Scott to explain trading liquidity dynamics. Sonal later synthesizes the core value proposition of long-term stock exchanges.22:18–23:51 · Guest disagreement 0/10 Strategic Advice for Founders and Final Thoughts Bobby outlines why the two years following an election present a critical window for policy action. Scott advises founders to stay focused on execution regardless of political shifts.0:27–3:00 · The host pushing back 0/10 Impact of Elections on Capital Markets and Washington Realities Sonal makes an insightful connection between modern capital bank debates and historical precedents from the Hamilton biography. Scott and Bobby explain how post-election excitement gives way to Washington legislative realities.3:00–6:07 · The host pushing back 1/10 Washington Mechanics, Administration Timelines, and Key Agencies Sonal gently frames Bobby's background with a full disclosure note that NVCA is a lobbying group. Bobby educates the hosts on the mechanics of presidential appointments and agency commission compositions.6:07–10:50 · The host pushing back 0/10 Tax Reform, R&D Credits, and Net Operating Loss Penalties Scott and Sonal articulate R&D tax credit mechanisms using Canada's model. Bobby details how Net Operating Loss (NOL) tax rules designed to stop corporate 'zombie' acquisitions created unintended penalties for startups.10:50–14:26 · The host pushing back 1/10 Capital Formation, Shrinking Public Markets, and Crowdfunding Sonal cites internal a16z research on shrinking public markets and argues that IPOs allow broader wealth participation than M&A. Scott gently corrects Sonal's misconception that accredited status requires a test rather than wealth thresholds.14:26–18:22 · The host pushing back 0/10 Breakdown of the JOBS Act: IPO On-Ramp and Sarbanes-Oxley Sonal demonstrates strong familiarity with federal policy by proactively introducing the Sarbanes-Oxley regulatory exemption provision under the JOBS Act. Scott and Bobby elaborate on the IPO on-ramp mechanisms.18:22–22:18 · The host pushing back 0/10 Public Market Liquidity, Tick Size Pilots, and LTSE Sonal openly asks for clarification on tick size pilots, leading Scott to explain trading liquidity dynamics. Sonal later synthesizes the core value proposition of long-term stock exchanges.22:18–23:51 · The host pushing back 0/10 Strategic Advice for Founders and Final Thoughts Bobby outlines why the two years following an election present a critical window for policy action. Scott advises founders to stay focused on execution regardless of political shifts.

speaking balance: gold is the host, purple is the guest (3 minute bins)

0:00 · the host 31% · guest 69%0:00 · the host 31% · guest 69%3:00 · the host 8.1% · guest 91.9%3:00 · the host 8.1% · guest 91.9%6:00 · the host 13% · guest 87%6:00 · the host 13% · guest 87%9:00 · the host 14.6% · guest 85.4%9:00 · the host 14.6% · guest 85.4%12:00 · the host 32.1% · guest 67.9%12:00 · the host 32.1% · guest 67.9%15:00 · the host 24.7% · guest 75.3%15:00 · the host 24.7% · guest 75.3%18:00 · the host 11.4% · guest 88.6%18:00 · the host 11.4% · guest 88.6%21:00 · the host 14.1% · guest 85.9%21:00 · the host 14.1% · guest 85.9%
Sharpest disagreement ▶ 1:16 Bobby contrasts campaign promises with Washington reality

Bobby gently counters optimistic post-election market sentiment by highlighting that passing legislation through the White House and Capitol Hill is vastly harder than campaign trail promises suggest.

Hardest push from the host ▶ 3:24 Sonal discloses NVCA lobbying status

Sonal briefly intervenes to add transparency to the discussion, reminding listeners that Bobby's organization, the NVCA, acts directly as a lobbying group for the venture ecosystem.

Biggest teaching moment ▶ 8:46 Bobby details history of NOL tax code unintended consequences

Bobby thoroughly educates the host on how anti-abuse tax policies meant to stop 'zombie company' tax havens ended up penalizing high-growth, cash-burning startups during acquisitions.

The host holds their own ▶ 17:08 Sonal brings up Sarbanes-Oxley provision independently

Sonal exhibits deep subject-matter knowledge by introducing the specific Sarbanes-Oxley regulatory relief timeline within the JOBS Act without prompt, which Scott immediately confirms.

the scores for every segment, with the reasoning behind each
ChapterTopicThe host as informed peerGuest teachingGuest disagreementThe host pushing backWhy
Impact of Elections on Capital Markets and Washington Realities 4310 Sonal makes an insightful connection between modern capital bank debates and historical precedents from the Hamilton biography. Scott and Bobby explain how post-election excitement gives way to Washington legislative realities.
Washington Mechanics, Administration Timelines, and Key Agencies 3501 Sonal gently frames Bobby's background with a full disclosure note that NVCA is a lobbying group. Bobby educates the hosts on the mechanics of presidential appointments and agency commission compositions.
Tax Reform, R&D Credits, and Net Operating Loss Penalties 5500 Scott and Sonal articulate R&D tax credit mechanisms using Canada's model. Bobby details how Net Operating Loss (NOL) tax rules designed to stop corporate 'zombie' acquisitions created unintended penalties for startups.
Capital Formation, Shrinking Public Markets, and Crowdfunding 6411 Sonal cites internal a16z research on shrinking public markets and argues that IPOs allow broader wealth participation than M&A. Scott gently corrects Sonal's misconception that accredited status requires a test rather than wealth thresholds.
Breakdown of the JOBS Act: IPO On-Ramp and Sarbanes-Oxley 7200 Sonal demonstrates strong familiarity with federal policy by proactively introducing the Sarbanes-Oxley regulatory exemption provision under the JOBS Act. Scott and Bobby elaborate on the IPO on-ramp mechanisms.
Public Market Liquidity, Tick Size Pilots, and LTSE 5500 Sonal openly asks for clarification on tick size pilots, leading Scott to explain trading liquidity dynamics. Sonal later synthesizes the core value proposition of long-term stock exchanges.
Strategic Advice for Founders and Final Thoughts 2200 Bobby outlines why the two years following an election present a critical window for policy action. Scott advises founders to stay focused on execution regardless of political shifts.

Statements from this episode (9)

Assertion Partly supported
Franklin: Volcker Rule blocked banks from investing in VC funds
“The Volcker rule was something that had been put in place, which effectively kept banks from being able to make investments into You know, VC funds or other funds into startups.”
Bobby Franklin Jan 2, 2019 ▶ 2:01
Insight
Franklin: Startup interests in Washington are drowned out by Fortune 500s
“You have to recognize Washington is really a big company town. I mean, if you think about it, once you become a big company, you're going to have a Washington office. You're going to have a lot of folks running around. And when you have so many voices talking …”
Bobby Franklin Jan 2, 2019 ▶ 6:18
Assertion Supported
Cooper: Canada lets companies deduct engineering hiring expenses from corporate taxes
“So for example, in Canada today, many companies when they hire engineers, they're able to deduct a lot of the expenses associated with those engineers from their taxes.”
Scott Kupor Jan 2, 2019 ▶ 7:48
Assertion Supported
Cooper: U.S. public companies dropped from 8,000 to 3,500 over two decades
“If you look at the numbers kind of over the last 20 years, the number of companies in the public markets is closer to 3500 to 4000 today versus 7500 to 8000 about 20 years ago.”
Scott Kupor Jan 2, 2019 ▶ 11:04
Assertion Supported
Cooper: Publicly listed companies create jobs faster than private companies
“When companies are public, they generate jobs at a much faster pace than when they stay private.”
Scott Kupor Jan 2, 2019 ▶ 11:55
Assertion Partly supported
Cooper: 95% of Americans only access capital appreciation via public markets
“I think it's like, 95, 96% of people in the U.S., The only access they have to capital appreciation is through the public markets”
Scott Kupor Jan 2, 2019 ▶ 12:20
Assertion Supported
Cooper: JOBS Act right-sized SEC filing regulations for early-stage companies
“One of the things that Job Act did was kind of modify the regulatory requirements around those filings to kind of right-size it for what is appropriate for an earlier stage company instead of what might be appropriate, for example, for a GM or a Goldman Sachs …”
Scott Kupor Jan 2, 2019 ▶ 14:46
Assertion Supported
Kupor: Eric Ries is collaborating with policymakers on Long Term Stock Exchange
“Eric is working with a lot of folks in DC to think about this concept of, he calls it the long-term stock exchange, but again, similar idea, which is how do we incent both management teams and employees, as well as incent shareholders to kind of think longer t…”
Scott Kupor Jan 2, 2019 ▶ 21:04
Insight
Kupor: Going public provides essential operational discipline beyond capital access
“Going public is a really important thing for companies to do. And it's not just because, you know, it creates access to capital, but it's a good discipline around how do you think about really running your company in a way that's responsive to a very broad cro…”
Scott Kupor Jan 2, 2019 ▶ 21:43
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