Reply #1: This is something that I think all of us are uncomfortable on, but the BG did give Kerry credit

[karynnj]

for his compromise - though taking him to task for not just erasing it. As a MA Senator with MA companies disproportionately being helped by this, it seems that in a very tough economic times, there is something to be said for phasing it out - rather than having an immediate big hit.

I was surprised that there was some support for his position on Blue Mass (!). I don't know if I agree, or even understand all of that thread, but there was at least two seemingly knowledgeable person who did speak of how it did help capital formation that was helping the economy recover. If there is any chance of this the idea of phasing it out is a good one - as now is likely not the time to do anything that could impair that.

The first basically summed it up as a vote that was good for MA - and he represents MA

The annualized dollar amount and number of IPOs generated in a given state is an accepted metric for measuring the relative economic competitiveness of a state. The carried interest tax break available to VCs and hedge fund principals is an incentive for the formation of new investment capital via these forms of private equity.

A healthy venture capital sector in Massachusetts equals jobs for Massachusetts. Remember jobs, those societal good things that we Democrats believe in creating?

Do you like the fact that our Governor can, rightfully so, point to the fact Massachusetts is today producing far more private sector jobs than many states with far larger populations? You can in large measure thank the relatively robust (relative to even Silicon Valley today) venture capital sector in the Commonwealth for that good news.

Did you like reading that national business story of last week that IBM will be opening its largest single software development lab in Massachusetts (Littleton - Westford), a story also rightfully pointed to by our Governor? Did you catch the line in the IBM story to the effect that the new software development lab will be located here so that its developers can access "more than 100 Venture Capital backed small technology companies in Massachusetts."

http://www.bluemassgroup.com/showComment.do?commentId=247052


I never saw this poster before and I have checked out Blue Mass regularly, but not frequently.

The second was from Petr, whose posts I always looked for because he is very well spoken and smart. He generally liked Senator Kerry, but he was never looked at like we were as "Kerry supporters". He responded to a response to Pratt's post

Zipcar is a Boston based company that has existed off of VC money for much of its existence (aggressive growth and acquisition strategy have eroded any profits to date...). It has filed for an IPO just this month and hopes to start standing on it's own within a year or so. VC's could have pulled the plug on it years ago... But, similar to Amazon, a decision to run deficits while chomping up market share has kept jobs from being lost, if not actually gained. This is not, actually, unusual. A lot of VCs are carrying companies that they hope will someday be ludicrously valued but have, as yet, to show dollar one in profit. That represents a lot of people who, otherwise, would be unemployed. An accelerating economy means that these companies can move from holding their breath to more aggressive growth strategies.

It's true that VC is a relatively new, and increasing, slice of the economy (past 30 years or so...) but that's due in no small part to retrenchment in defense department spending in that same time period. Companies like Millipore, Raytheon, Analog Devices and BBN Technologies (which is now owned by a VC...) were once some of the biggest employers in the state and were heavily dependent upon defense capital for much of their early existence. Military efforts at COTS integration, bad press surrounding military contracts/spending and a clear eyed view of market forces led these companies to diversify away from defense capital (though, to be sure, not wholly away...)

A 10,000 foot view of the Massachusetts economy shows a great deal of diversity: industrial, technology, pharma/bio-tech (and life sciences), retail and financial. Not one of these sectors is untouched by VC involvement...

(his subject line referred to "vulture" capitalists - so he is likely not an apologist for them.