The U.S. government would like to regulate venture capital funds because VCs advise the startup companies they finance, The Securities and Exchange Commission would supervise the regulation.
Naturally, bureaucrats feel venture capitalists “advise” their clients when they lend funds or invest in them. But that makes the slippery slope even more slippery. That would also make every member of a company’s board of directors an “adviser.” Or place every major bank lender into this category.
There could be no end to such regulation. It would open up the job market for all those civil servants who never operated a pushcart, but know how to run any business assigned to them for meddling. Every bureaucrat would be able to evaluate and parse the meaning of financial and managerial advice that lenders and investors suggest.
An example of state capitalism!!
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