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Venture Capitalist George Jarkesy on why reducing government regulations and boosting the capital available will help revive capitalism in America.
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-- while jobs gates Ellis -- -- -- three guys who have revolutionize.
US innovation and business but.
Could that golden era of American entrepreneur realism they pioneered becoming too in an venture capitalist.
George -- -- fears a stifling climate of govern over regulation.
Maybe taking the US away from that cutting edge.
To the losing -- and she joins me now with more and that the -- exchange George good to see you thanks for coming in.
Thanks for having me on so very simply.
Could hit a Steve Jobs or Alice and her -- you're talking about.
Have the same kind of success if they were to start now as they did when they did start.
No that -- today.
It is not that the entrepreneur -- not in America the entrepreneurial spirit is here in America.
But you know you will the young businesses are are struggling.
From over regulation.
And has the same regulatory environment as a company doing a billion in sales and that's the problem with one of the problems the other problems capital.
And so you have over regulation.
Which that has caused the problem with capital over the last two decades.
But you do have people you do have young much -- -- orders like Zuckerberg and FaceBook I mean our young entrepreneurs with new products new ideas new services that they're bringing online.
-- you do have those guys and you've got a guy like jobs who was doing his work in his garage.
But -- jobs was doing his work in his garage today in just starting out.
You have to he'd have to deal with ten different government regulations.
-- have to have insurance he'd have -- workman's comp.
He'd have to have I mean it would never work the way it did today.
Although I gotta get back then in the late seventies I remember the or Jimmy Carter and that was highly regulated that taxes were much higher.
That's when they got their start of course they didn't really blossom until both the Reagan tax cuts came in -- 1983.
When they finally kicked in but.
But these guys did get their start in a highly regulated highly taxed environment.
Yeah we're not just talking about the regulation on business itself.
We're also talking about what's happened in banking and the regulation of what's going on -- Wall Street.
You -- to Wall Street today you're not gonna get an IPO done for less than fifty million and that's part of the regulation so the young businesses grow up now.
And they go to look for that next round of capital after their friends and -- capital.
And that business is gone so is not just the business -- the regulation on the business itself.
It's that next round of capital that take -- from being a small.
Regional business to a larger national business that doesn't exist.
Take for example if you look at what Bill Gates and Paul Allen had when Microsoft went public.
They had 70%.
Of that company after the IPO.
And in the vacuum that has been created by regulation on Wall Street now what's left is venture capital private equity some kinda mix there.
And that mix takes in funds business and they say the guy they say Bill Gates Paul Allen will take 90% of your company.
We'll let you have 10%.
And if you work real hard.
And for the next decade you're among the business from -- -- and another 5%.
And that's the difference Bill Gates and Paul -- -- 70%.
Today -- -- model.
Through this regulation they only get 10% so what.
-- is that what's happening today is there's -- in the entrepreneur or ship out of the corporations and that's what's killing inventiveness.
Very quickly that's exactly right that everything is push toward big business George stark you see good to see you George thank you very -- please come again thank.
