Responding to Elizabeth Warren’s call to regulate and break up some of the nation’s largest technology companies, the venture capitalists that invest in technology companies are advising the presidential hopeful to move slowly and not break anything.
Warren’s plan called for regulators to be appointed to oversee the unwinding of several acquisitions that were critical to the development of the core technology that make Alphabet’s Google and the social media giant Facebook so profitable… and Zappos.
Warren also wanted regulation in place that would block companies making over $25 billion that operate as social media or search platforms or marketplaces from owning companies that also sell services on those marketplaces.
As a whole, venture capitalists viewing the policy were underwhelmed.
“As they say on Broadway, ‘you gotta have a gimmick’ and this is clearly Warren’s,” says Ben Narasin, an investor at one of the nation’s largest investment firms,” New Enterprise Associates, which has $18 billion in assets under management and has invested in consumer companies like Jet, an online and mobile retailer that competed with Amazon and was sold to Walmart for $3.3 billion.
“Decades ago, at the peak of Japanese growth as a technology competitor on the global stage, the U.S. government sought to break up IBM . This is not a new model, and it makes no sense,” says Narasin. “We slow down our country, our economy and our ability to innovate when the government becomes excessively aggressive in efforts to break up technology companies, because they see them through a prior-decades lens, when they are operating in a future decade reality. This too shall pass.”
Balaji Sirinivasan, the chief technology officer of Coinbase, took to Twitter to offer his thoughts on the Warren plan. “If big companies like Google, Facebook and Amazon are prevented from acquiring startups, that actually reduces competition,” Sirinivasan writes.
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