It’s really hard to get DC to understand Silicon Valley

Danny Crichton:
Bobby, thank you so much for joining us.

Bobby Franklin:
Thanks for having me.

Danny Crichton:
So, you've been the longtime head of the National Venture Capital Association, the main industry body that interacts with both the federal government, Capitol Hill, the executive branch, the presidency, and the regulatory agencies as well as increasingly at the state level as more and more states are sort of getting into venture capital and the regulatory business. Give us a 360 lay of the land. What's top of mind for you? We're recording this in end of April 2025. What are you thinking about as we are heading into the legislative session this year?

Bobby Franklin:
Oh, great question. I'm thinking about a lot of things. We have a whole matrix of issues that are important to the entrepreneurial ecosystem that we have to keep tabs on. I often get the question like, "Well, what are the three top priorities you're focused on this year?" And I always have to give the same answer. It's like, we don't control our priorities, somebody else does, and that makes it very difficult.
So, we've got to react most of the time. Obviously, we're in this period of a new administration, the first 100 days. There's some shock and awe. There's some chaos in certain areas. And you've got to find the signal through the noise and understand what's going to impact entrepreneurs and startup companies and the investors that help them along the way.
So, that's what we're doing. We know that there will be a tax bill. It's really being written now, and there's kind of a timetable that is aggressive. We'll see if they can meet that, but it's something that is coming along. And we're going to be in the middle of that. We know there's a lot of regulatory issues that we need to try to get in a better place based on what happened in the last administration.
So, you sort of think about each of your issues. Are you playing offense or defense? Is it live right now? Are they talking about it? Are they drafting a bill? Are they about to pass something? Is there going to be a regulatory rule written or undone? And that's kind of how you lay out your schedule and what you've got to focus and prioritize your time.

Danny Crichton:
And you joined The National Financial Capital Association back in 2013, so second term of the Obama administration. So, you saw the Obama-Trump one, Biden-Trump two. How does that affect, in terms of thinking about those first 100 days, getting the legislative agendas? We've gone through a couple of these transitions with both parties. How do you adapt to that with this particular administration in 2025?

Bobby Franklin:
Well, I think we were starting to adapt when the election was still going. And the question that we had with our board was, "Okay, if this is the outcome, these are the things we're going to be playing offense on. These are the things we're going to be playing defense on." By the way, there's some issues that it didn't matter the result of the election. And so, you're still in the same posture, so you don't have to do anything new.
When you've been in Washington as long as I have hate to admit, you sort of get numb to the change when it happens. A lot of political appointees lose their job. Now, we have more than just political appointees losing their job because of DOGE and some of the things going on in Washington. But it's still a bit of a routine that you go through and you don't have to quickly discern, "Okay, who are the decision-makers? Are there power differences at certain levels?" It doesn't work like, okay, the next chair of the SEC is going to be just like Gary Gensler, not just for policy, but just about, are they aggressive? Are they going to be active? Are they going to be less active?
So, you're trying to understand the new players. You're trying to understand what their focus is, not just on the issues but their priorities and figure out what you've got to pay attention to.

Danny Crichton:
When you think about the rise of technology in DC, I started my career 15 years ago, and Silicon Valley could not be farther from Washington DC. This about 2011, 2012, probably right before you sort of joined in your current position. And back then, it was basically try to avoid Washington, don't engage, don't fly. There are very few direct flights from San Francisco to DC. And if I recall, there wasn't even a direct to DCA, which I think got introduced a couple of years ago. You had to go to Dallas in order to get into the city.
And so, it was just as far as possible away. Obviously, California's always been a donor hub and certainly the venture capital industry itself has always been a hub for donations to both parties. But widely across the startup ecosystem, the innovation of ecosystem, people were trying to ignore DC or DC was just bad people trying to make innovation stop.
I'm curious, we've seen particularly with Kamala Harris coming as senator of California and sort of bringing in a certain tech crew now, a very popular group of techies surrounding the Republican administration today. How has that changed your job as you think of an advocate for the innovation ecosystem where no one was engaged, and now everyone is starting to get engaged?

Bobby Franklin:
Well, I have a different perspective. I know that I remember folks that were part of the entrepreneurial ecosystem or even the venture space that were active in the Obama administration. They probably weren't as vocal about being active with the administration, but they were.
And so, I sort of see this as, "Okay, what's new and different now?" I think it's just more people around this particular administration wanted to be more vocal about supporting this administration when the election was at its height. And obviously, several of them raise their hand, said, "I'd like to serve and I'd like to come in and be a part of that."
So, I see a lot of folks from our industry that have been a part of several administrations before, but you just didn't hear about them. To the point about, leave us alone. That's a story that's as old as certainly longer than I've been here. I remember coming to Washington in the late '80s, early '90s, and I remember some of the big... I remember Microsoft and ignore Washington, ignore Washington, and then they get summoned.
I remember being in the telecom industry and hearing when Ma Bell got broken up, I mean, so this story repeats itself. I'm from Arkansas, I remember Walmart. I remember being on the hill going to the markup and the Senate Finance Committee, I did international trade issues with my boss, and as we're walking out the door for the final vote in committee before NAFTA went to the floor, we get a call from Walmart saying, "Hey, we've got some concerns." They really didn't have a Washington office here. They are the largest retailer, right?

Danny Crichton:
Oh, well.

Bobby Franklin:
And so, you see this evolution time and time again where companies, they just are trying to grow. They're trying to survive. They're trying not to be that failure number that happens so often. They're just trying to make it. At some point, they wake up and look around and go, "Oh, wait, yeah, right. We've got to think about this." And then, obviously, some industries are more regulated or more impacted by public policy than others. It's a story or a lesson I guess that has to get relearned many times.

Danny Crichton:
Lawrence and I were just down in Austin recently where Michael Kratsios, the Director of the Office of Science Technology Policy for President Trump gave his first public address, sort of addressed to the innovation ecosystem. And this was at a place called the Endless Frontiers Retreat with the idea of bringing back American manufacturing, redoubling down on innovation and the economy.
And he had a concept of a golden age is only possible if we choose it. I don't know if this speech showed up in your world, it was his first public address since coming into office. But I was curious, did this set out the right sort of messaging that you think is good for the innovation ecosystem in general?

Bobby Franklin:
I think so. Actually, when Michael Kratsios was in the first Trump administration, we met with him often. We would go down to the White House and meet. I think it's great that he's in that position. I signed onto a letter with other trade association CEOs in support of it and urging the Senate to move his nomination forward.
So, it did resonate with me the concept of a country. I love when you say endless frontiers because as you know, the CHIPS and Science Act that passed in the Biden administration, the science part of that was what started as the Endless Frontier Act, which was a bipartisan bill that both the House and Senate, Democrats and Republicans were part of pushing. It didn't go anywhere until... Then, we had a vehicle when everybody needed CHIPS and the pandemic realized the supply chain challenges and everything else.
And so, that was the train that we could put that boost on to get it across the finish line. The spirit behind that is the right one. It's like we are a great country. We've had great innovations happen. A lot of those innovations that have happened that keep us in such the right position vis-a-vis competition with other countries, being an innovation leader is a partnership that the government and the private sector have done well over and over again.
But if you look back over decades, you can see this precipitous drop in the level of R&D spending that the government has provided to basic research that sometimes only the government can be the one that provides that funding that has waned over the years. And you see other countries that have increased theirs. So, if we all feel like we're in a global race, and I think many of us do, then you've got to kind of look at the data and see what's it telling you. And I think the recognition that both Republicans and Democrats came to the conclusion was that it's important for us to address that.

Danny Crichton:
One of the big topics that we were talking about right before the share was antitrust. And as we sort of record these two major blockbuster cases underway right now in United States v. Google, and FTC v. Meta platforms, Google, I think just last week was found liable or I don't even know the right term in this particular civil case with the FTC and DOJ. But basically could potentially be forced to divest Chrome. Meta sort of having a lawsuit over its acquisition of Instagram back in 2015.
And antitrust has been in the news quite a bit. I mean, I think Lawrence and I are both on the circuit. We go to a lot of political events. I think antitrust is one of the most interesting open-ended areas of tech and policy right now where ideologies and sort of policies that have been in place for both parties for really decades since the '80s and the Bork rules have really opened up in new ways.
I'm curious your position on a lot of these sorts of things where there seems to be a lot of change. How do you think about antitrust today from the technology perspective?

Bobby Franklin:
Well, I think about it from the entrepreneurial ecosystem perspective. And I think about it from the perspective that the flywheel has to keep turning and we've got to have exit opportunities for the investors that make the ideas that the entrepreneurs come up with a reality. And if there's not that exit, then there's not that next fund, then there's not that check for the great idea that needs to be funded.
And so, that's the challenge that we have. And the previous administration, obviously Lina Khan was the target of lots of ire because she seemed to be putting a distinct wet blanket on all mergers and acquisitions, and that seems to be carrying over a little bit. And there's a real question mark. I mean, we were excited about getting out from under that, but it's not clear we are out from under that at this point between the views of the Vice President singing the praises of Lina Khan and the announcement by the new chair of the FTC, Mr. Ferguson saying, "Hey, those merger guidelines that FTC and DOJ came up with, they're still in place and we're not looking to change them anytime soon."
And my frustration and our advocacy to policymakers here in Washington is like, you have to understand how this flywheel works and you have to understand that it's important. And you can't get so myopic about one particular company or another company and whether or not something should have been approved years ago, "Hey, go take that up with them. Go look in the rearview mirror with somebody else and talk about why they did or didn't approve something. But don't stop the flywheel from moving forward." Because guess what? IPOs are not the exit that happens most of the time, right? It's the M&A activity. Not every company was meant to be a competitor to some company you don't like.

Danny Crichton:
Yeah. Well, we saw this with Wix was confirmed and then was pulled back and then was confirmed again. Figma obviously blocked and Adobe ended up sort of giving up on that. Microsoft managed to get through with Blizzard. But these big transactions are obviously very, very meaningful.

Laurence Pevsner:
Yeah. I mean... So, I'm newer to VC. I am not as, maybe I can speak for the listener here who doesn't understand the flywheel as well. Maybe you can unpack it a bit, right? Because I think most of us see what was it last year like, three quarters of VC exits where sub 100 million acquisitions basically went offloaded to big tech. And I think that's the real question is, okay, how is that actually advancing our competitiveness and innovation? So, how does the flywheel work in that scenario?

Bobby Franklin:
So, the flywheel works in that you've got to have distributions, you've got to have returns, you've got to have exit opportunities for the investors so you can go raise the next fund and you can keep writing checks and you can keep serving the entrepreneurial ecosystem. That's very important. And when I say that not every company is meant to be a competitor, that's just true, right? And if a big company can get some new little security thing from a little company and that can provide an exit opportunity for those both investors, LPs and GPs as well as the employees there, usually what happens is those successful entrepreneurs go on to do something else.

Danny Crichton:
Mm-hmm.

Bobby Franklin:
I mean, I love to ask this sort of hypothetical question, listening to whenever it came out, Walter Isaacson's book about Elon Musk and thinking about the zip to it and the exit that Elon had and he bought a Mclaren or whatever. What if he didn't have that exit? Would he still have been a part of PayPal Mafia? I mean, I don't know. But it's like an interesting question to go back and look at some of the most successful serial entrepreneurs and say, "What if Lina Khan would have been somewhere along the way and that entrepreneur wasn't able to exit that company and look what else they did, would that have happened or would've not happened?"
There's no way to know, but it's like an interesting philosophical question because it goes to when you're looking at a merger and acquisition, it feels like she... And maybe now, there's still this myopic view only looking at one side of the table, the acquiring company, and you don't like the acquiring company. Well, what about the company that needs to be acquired? How do you balance out that? And that's what we hope policymakers will appreciate, that there's more to the story than just somebody that you don't like.
By the way, there's other ways to get at companies that you don't like as opposed to just keeping them from being able to be a buyer in the space of other companies.

Danny Crichton:
Well, we mentioned Wiz, which sold to Google for or in the process of selling to Google, but these were second-time founders. I actually had founded a company called Adallom, sold to Microsoft in 2015 and left as a group after several years to found Wiz back right around the time of COVID, a couple years later now at multi-tenths of a billion dollars a company.
So, we do see that recirculation, obviously other companies have De Novo founders have never started a business before. But the flywheel of exits is one that I think is top of mind for a lot of VCs today where the IPO markets have now been closed for about two to three years, depending on how you want to count.
And so, M&A sort of becomes the only avenue for an exit. And as that becomes more perilous, the question becomes what does this asset class look like if every company has to stand on its own two shoulders, and there's sort of no liquidity options for the private businesses. I want to turn a little bit to tax policy real quick.
Last year, I wrote a piece on Section 174 as the R&D tax credits were expiring for a lot of different startups. And from the venture capital perspective, Lux has something a couple hundred companies, let's say 300 in the portfolio. We started getting these tax bills, and it's sort of funny how much founders, particularly our youngest, newest founders, suddenly file taxes and realized they had a massive bill to pay and a bunch of micro crises as people went to their accounts and had to figure out what to do.
There was a huge goal of trying to pass a reform last year to make 174 permanent and bring back the R&D tax credit, which would kind of allow CEOs to depreciate and their software engineering salaries, which were the largest expense early on in the development of a company. What is happening now with those? Have they come back? Why are they held up? Because I feel like the R&D tax credit was one of those bipartisan like magic solutions that had been there for decades that everyone really enjoyed.

Bobby Franklin:
In 2017, the Tax Cuts and Jobs Act when it passed, we had a lot of issues that we were dealing with here at NVCA. And one of the issues we weren't able to stop was them raising money in the scoring of passing a tax bill by changing what you're talking about, where instead of taking that expense in the year you make it, you had to amortize it over five years.
And so, that's why it took a while. First it had to pass, then it had to be implemented, and then the clock starts. And then, it's not until years later that the pain really starts to hit. We got calls. We knew it was going to be a problem. Here's the good news, good news, bad news. Good news is we've gotten Body of Congress to pass a bill to fix it. We did that last year. Bad news is it was only one of the bodies of Congress. It wasn't both bodies of Congress.
So, we got it through the house and it was so close to, or at least in the eyes of some senators, it was so close to the election that they thought, "Hey, we think we're going to do good in this election. We think, meaning Republicans in the Senate that we're going to take the Senate and we think we could cut a better deal. So, we're not going to let this one go forward."
So, now we have the 2017 bill, many provisions expire except this one that was made permanent. So, we have to go back and change it. It will certainly, it is, and it will be a part of the debate. It's something that we are spending a lot of time and advocacy on up on the hill, talking to members about how important it's to the entrepreneurial ecosystem to make sure that those expenses can be taken in the year that they're expended and not have to be amortized over five.
So, we're all over it. A lot of people are all over it. The Hill knows it's an important issue. So, I am hopeful and optimistic, but there are a lot of tax issues on the table. I mean, it's carried interest. It's qualified small business stock 1202, it's this R&D issue. It's what's the overall capital gains rate going to be.

Danny Crichton:
And how do you think the prospects of R, because obviously there's so many different issues in some cases, the direct tradeoffs of each other, because you do have to go through the scoring system. There has to be revenues that match, particularly if you use reconciliation.
They have to match fences and revenues, which was the issue with the 2017 bill with the R&D tax credit, which was made permanent to add in all these future revenues. And it was sort of this ticking time bomb that was designed to be fixed, and then the bomb went off as it does these days in the legislative process. And we were sort of left with the mess in our industry. How do you think about where things are today on the tax bill? And is it on course for passage by the end of the year?

Bobby Franklin:
I think it's on course to pass by the end of the year, exactly when is a debate that we're having in Washington. If you hear people, they say it's going to happen by Memorial Day. I think there's a chance that the house might do something by Memorial Day, but that's a few weeks from now. So, we'll see.
I think that once the Senate gets involved, et cetera, it's going to be a little bit longer. There are a lot of factors that will influence that, including what is the actual date for the debt ceiling limit to be hit. And there's questions now, how were the receipts coming in on Tax Day April 15th? Did they come in better than not? Does that extend the debt ceiling limit debate longer? All of that stuff is being talked about now.
Even on the reconciliation, this was a little different. The little cute by half almost was the House and Senate really had different ideas. And so, they sort of passed this range of ideas. And unlike other things where you're trying to get a law and at the end of the day something has to exactly pass the House and exactly pass the Senate before it goes to the president become law.

Danny Crichton:
I watched the Magic School Bus and how or the Schoolhouse Rock...

Bobby Franklin:
Schoolhouse Rock.

Danny Crichton:
Yeah.

Bobby Franklin:
Exactly. I'm just a bill. The challenge with this is the reconciliation doesn't go to the president. It's just a set of rules. And really, the only reason you have to talk about it is because the Senate filibuster and trying to get around that and trying to get around 60 votes. So, that's the tail that's wagging the dog here. But it was kind of interesting for those of us who've been around a long time in that they kind of found a way to have their cake and eat it too.
As one side said, "$1.5 trillion in cuts." The other side said, "About $4 billion. Yeah, close enough. We'll just have range." And the way the House works is they can come up with whatever they want. And at the end of the day, they have to pass a rule and they can just in the rule, change the reconciliation instructions yet once again, once they come up with a bill that they think they can pass.

Danny Crichton:
Let me ask you on this because I had asked the senator late last year, and I had asked how much is the bandwidth of DC, legislative bandwidth is always a huge issue for Capitol Hills. There's just not enough time to cover everything. I felt that the bandwidth required to pass a tax package of zero would be very, very high. It'd be sort of dominant to the legislative agenda. It's a huge bill. Lots of years. Obviously, Republicans have both houses. Is it taking up a lot of the "Oxygen" in the room, or is it sort of a relatively well-managed process? And there's a bunch of other issues on the docket as well?

Bobby Franklin:
I can't believe I'm saying this out loud. I do think that Congress can walk and chew gum at the same time, most of the time.

Danny Crichton:
That's a very high bar.

Bobby Franklin:
It is a high bar. I do think that on the one hand it is taking all the oxygen in the room. If you're on the Ways and Means Committee, you have been, not now because they're in recess. But basically, before they went in recess and expected starting this coming Monday, you have been cordoned up in a room over at the Library of Congress for eight hours a day going through all sorts of issues, trying to understand what's there. And then, trying to come up with some consensus here.
So, you have been, that's all the oxygen in the room. But other committees, if you're not on the Ways of Means Committee, you're not writing the bill. You're waiting on the deal to be done and come to the floor and you vote, yes or no. And so, all the other committees are active and the floor has to continue to process legislation and kind of move forward. If you're in the Senate, you're sort of sitting there going, "Let's see what you can do House," because we've seen...

Danny Crichton:
Right.

Bobby Franklin:
We've seen this movie before and it looks like you're having a sometimes-difficult time getting something across the goal line with your very, very narrow majority. So, you go first. I mean, they need to go first anyway because it's a revenue measure and that by Constitution is supposed to originate in the house. But it's also a political point, which is come talks when you find something.

Danny Crichton:
I will say, I don't know how much I'd have to be paid to spend eight to 16 hours a day in the Library of Congress to debate the Arcana of tax codes. But it's probably not what people are actually making as congressional staffers on Capitol Hill, I can tell you that much.
So, let me move on to another topic, which is AI regulation and policy. Obviously, every one of us, at least in our facet of the venture capital world, is just obsessed with artificial intelligence. Money is going wild. It's one of the most frenetic periods I've ever seen in 12 to 14 years in venture capital in terms of investment deals, flow, the frenzy, the valuations, et cera. And obviously, we've seen just a parade of AI leaders from Sam Altman on down going to Washington DC doing tours, summits with Schumer last year, summits at the White House.
I'm curious from your perspective, how much does AI show up? How do you balance, I think a lot of different people who are very vocal on AI safety, AI regulation, national security issues between the US and China, and have different views on those?

Bobby Franklin:
It's a great question. It's a challenge representing a trade association, having lots of members, differing views. It's a balance. But at the end of the day, our job is to get them to focus on what needs to be focused on. So, what's happened so far, the White House has basically said, "Tell us what you want to tell us about AI," right?
And so, we had to make a submission and we have an AI working group among NVCA members, and we convened them and we talked about what's important, and we laid out a set of comments and we put them in, what's the White House doing? Well, they're using AI to train on all the comments that were made to see if they can get a summary of what people are saying.
And so, that's where it stands. I mean, it certainly doesn't feel like we're close to AI legislation or regulation. We're talking about it. We're saying what's important. We're getting views and ideas on the table, and it's not baked yet. It's not ready. There's nothing's been proposed. It's ready to go to the floor.
So, at the beginning I think of that process. I think the challenge and the concerns are, well, what if the states act? California passed a bill last year that the governor vetoed? I'm sure California is going to... I know they're considering another bill, right? What about other states? What's happening in Europe? Kind of like the privacy debate. When Europe did something, California did something. Washington couldn't get its act together.
So, by default, everybody was being governed by California and Europe. I mean, I don't think that will happen on the AI front, or if it does, it won't last very long because I think AI is so important that we need to get it right. Well, I would say, we're just at the beginning of that process.

Danny Crichton:
AI spans the gamut from massive tech companies, Meta, Google, Microsoft, all the way down to small startups. I look at the ecosystem of advocacy orgs in Washington DC. There's been a huge outgrowth in the last couple of years around technology.
So, I'm thinking of groups like the Foundation for American Innovation, FAI. I'm thinking of groups like Y Combinator now has done their sort of little tech conference, I think last year. There's sort of a... I won't call it an alphabet soup, but there's certainly a growing ecosystem of advocacy orgs. How do you interact with your peers across the industry? Is it collaborative, competitive? Is it dependent on who overlaps in terms of financing and the sort of members? How do you think about the broader kind of ecosystem of advocacy for tech in DC these days?

Bobby Franklin:
I welcome it because we need more people to help educate policymakers. And remember, policymakers turn over often. I'll give you a stat. We talked about the tax bill a moment ago. Of the members of the House Ways and Means Committee and the Senate Finance Committee where the bills will be written, 64% of those members were not on those committees when this first bill went through in 2017.
It turns over quick. You're on a treadmill of educating members and their staff and the staff turns over quicker than the members do. And so, you're constantly trying to help them understand technology, the venture ecosystem, what is venture? I mean, most people, if you went up and surveyed them, they couldn't tell you the difference between the New York Stock Exchange, an investment bank, a venture fund, a hedge fund. I mean, it's just like that's the capital people. That's money, and they really don't understand it.
And so, you're in a constant state of education trying to help them understand. So, when I see other groups that are popping up that can be helpful, we need a big choir. We need a chorus. Because for the most part, our collective industry is not as big as a lot of other industries. And I used to work in some of those. And when you understand how many people are on the playing field in Washington, particularly with highly regulated industries, it's... You're doing your best to try to break through that noise and have somebody pay attention to what you believe is important for your industry.

Danny Crichton:
Well, I'm thinking of certainly in the biotech industry and in defense tech where obviously if you're mostly selling to the government, there's a very large infrastructure too, connect with the right people and to get that process done. But I want to go back to your previous comment here about California because as I preface at the beginning of the show, I mean, you obviously represent the National Venture Capital Association, and maybe I'm just ignorant. I'm not aware that there are local venture capital associations other than sort of people who sort of hang out together. But maybe there's something formal.
But increasingly, more and more states are engaging around rules and regulations on technology, on social media privacy. We saw Florida pass a ban on social media below a certain age. Other states are sort of pursuing that as well. There's interest from a lot of state legislatures to do work on these issues often in some cases because there's absent views from DC and Congress is not acting. In other cases, you just sort of have the right advocates on the right committees and those bills kind of sail through.
I'm curious, from your perspective, running the National Venture Capital Association, how do you think about these state issues? Is it about prioritization? Is it trying to play offense in a lot of these states? Defense? How do you strategize on that?

Bobby Franklin:
I remind our board often that we are the National Venture Capital Association, and we were meant to focus here in Washington. However, there have been examples in the past of where we've had to what feels like parachuting into certain states when something has happened because we, in many cases, are best positioned to make the arguments and to have the conversation.
And so, I, at one time have been technically a registered lobbyist in several states in addition to being a registered lobbyist here in Washington. But there are actually some state, venture capital associations, they typically have both venture and private equity. For example, Illinois Venture Capital Association is very active and they're very active on policy issues at their state capital as well as the Michigan Venture Capital Association. There's one in New England. There's one in New York. There's actually two in New York. There's one upstate and there's one in more in Manhattan focused.
The challenge, and we know them all and we work with them. We convene them often. We help them meet each other because they're not competitive with one another obviously, but they do learn from each other, what works, what doesn't work. We have the same issues. I wish that any state that is active would have a local or state organization that focused on public policy.
Some of the ones that are out there are really about pitch events and putting people together and networking and things like that to serve their local region. But I really wish everybody would get more involved in public policy because we can't be there for every time. It is a concern like we've mentioned on AI, if California does something or if we start to get a patchwork quilt, that's really going to hamper the ability of the United States to recognize the full potential of what AI can become, and our competitiveness around the world.
So, I think it's an issue we're going to have to reckon with, but it's one that gets really complicated when you're... In Washington, we are a very small organization compared to others, compared to other industry associations. And so, we have to understand what our resources are, what our bandwidth is, and where we need to apply it.

Danny Crichton:
So, closing out here, I mean, going backwards and forwards, so going backwards, when you think about biggest achievement for the NVCA, you've been there for 10 years, what was sort of a big legislative goal? And then, prospectively, what is the number one thing you're worried about either in the coming year or in the years ahead from a regulatory perspective?

Bobby Franklin:
It's hard to pick one. I mean, obviously, we've had several tax bills. We've had to face challenges to carried interest multiple times. We are, again, we've had to face challenges to qualified small business stock. We are, again, we've had to get things changed such as the Volcker Rule. So, banks could once again be LPs and venture funds. But yet, there's another piece of that that we're still working on, so that a fund of funds could have a bank as an LP, which now it's not allowed.
So, it's kind of still a holdover vestige of the way the Volcker Rule impacted our industry. We sued the Securities and Exchange Commission and won in the Fifth Circuit Court of Appeals when they were trying to highly micromanage the relationship between LPs and GPs. We've tried to make progress on immigration. That's been such a controversial issue. It's been difficult.
Hopefully, now that we feel like we made progress on illegal immigration, maybe we can turn the focus to legal immigration and how important it is to the country. And by the way, the connection between AI and the need to have talented people come to the United States so that we can realize this is, that came up in our working groups and we put it in our comments to the White House.
So, there's a whole laundry list of issues that are important to us. And we have been successful on many of them, not only during my tenure since going back to 2013, but my predecessors as well. The Jobs Act that happened. I mean, there's a long list of successes. And at the end of the day, it's all about making sure policymakers appreciate and understand how important the entrepreneurial ecosystem is and how unique it is.
Washington understands what major corporations want because there's a gazillion people here every day to tell them. And Washington understands what mom and pops want or need, but they don't really understand this high growth VC backed set of companies that are technically small by definition, but they don't intend to be a mom and pop. They intend to be a Fortune 500. And that's just a different set of issues.
In the 2017 bill that we were talking about, one of the issues we had to spend the most bandwidth on was a proposal on the table that would have changed the taxing of stock options to when they vested, as opposed to when they were exercised.
So, imagine all the portfolio companies that would be running just like they did on the R&D amortization issues, saying, "I've got this tax bill just because I've been here long enough to be vested and my stock options. How am I going to pay this?" I mean, I should be able to choose when I elect to exercise a stock option, and that should be the taxable event.
And we had to go in and explain the policymakers how much havoc that would wreak into the entrepreneurial ecosystem. So, those are many of the examples. And in terms of what we're focused on, it goes back to what's Washington focused on. So, the tax bill is front and center, so that's got to be our primary focus at the moment.
We know of the court case that we won against the SEC last year, but there were probably 40 other rule-makings that happened during the previous Securities and Exchange Commission. We need to revisit those. We have the AML rules that will hit, exempt reporting advisors starting January 2026. We sent a letter just this week to FinCEN, the Financial Crimes Enforcement Network, part of Department of Treasury to basically say, "You've got to stop this. You've got to delay this implementation. It's connected to beneficial ownership. You've already stopped that. These are related."
Yet, people now arguably need to start spending money to be ready for January 26th, and you need to take a fresh look at this. This one should not have happened. We got a long list of things that are on our priority agenda. It seems like nothing ever falls off permanently, it just keeps coming around.

Danny Crichton:
Well, I think whenever we talk about DC I think that the constant pattern is rush to the next issue, rush to the next issue. Nothing has ever sort of solved. Everything's always re-litigated. But Bobby, we want to take you from all of these priority issues because we care very much for your success. Thank you so much for joining us.

Bobby Franklin:
Thanks for having me. Great to be with you.

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