Center for American Entrepreneurship Urges Policymakers to Carefully Study the Potential Implications and Unintended Consequences of Anti-Trust Legislation
June 14, 2021
WASHINGTON, D.C. – John R. Dearie, President of the Center for American Entrepreneurship, today issued the following statement regarding the introduction of the Platform Competition and Opportunity Act on June 11, 2021.
“On Friday, members of the House Judiciary Committee introduced the Platform Competition and Opportunity Act as a part of a legislative effort to preserve opportunity, innovation, and consumer choice in the digital marketplace. But the Act could actually endanger opportunity, innovation, and choice by damaging the nation’s startup ecosystem. The Act would ban many acquisitions of startups by larger companies.
Acquisition by a larger company is the most common outcome for successful startups and their investors – far more common than an initial public offering. According to a recent report by Silicon Valley Bank, nearly 60 percent of startups expect to be acquired. In 2019, ten times as many venture-backed startups were acquired as went public, according to the National Venture Capital Association.
As a major avenue of ‘exit’ for startup investors, acquisitions are an essential aspect of the entrepreneurial ecosystem. Acquisitions enable startup investors to reclaim their invested capital, realize any gains on those investments, and recycle their capital into the next generation of startups, fueling the ongoing process of innovation-led economic growth and job creation.
But if investors can’t get out, they won’t get in – and without investors there is no startup ecosystem. With these concerns in mind, the Center for American Entrepreneurship respectfully urges policymakers to carefully and cautiously study the potential implications and unintended consequences of new anti-trust legislation.”
About the Center for American Entrepreneurship (CAE)
The Center for American Entrepreneurship (CAE) is a nonpartisan research, policy, and advocacy organization whose mission is to engage and educate policymakers in Washington, and at state and local levels across the nation, regarding the critical importance of entrepreneurs and startups to innovation, economic growth, and job creation – and to pursue a comprehensive policy agenda intended to significantly enhance policy circumstances for new business formation, survival, and growth.
For more information, visit www.startupsUSA.org
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