Live from the Summit: VCs going global as US regulatory environment limits global effectiveness

No one would argue that successful financial services companies need to take a global approach to their business. But a panel at the DLA Piper Global Technology Leaders Summit on financing the world’s emerging technologies contended that the need for U.S. companies to have a global perspective stems largely from an increasingly cumbersome and expensive regulatory environment in the US. And as the global financial crisis plays out in the near term, the panelists don’t see the situation turning any time soon.

One panelist equated the US regulatory environment to “cement” that forces emerging companies, or “seedlings,” to struggle to find room to grow within the cracks. The group discussed the notion that Sarbanes-Oxley has threatened one of the great traditions of the US – liquidity created via IPOs. Increasingly, companies will not launch an IPO in the US when it can be done without the constraints of Sarbanes-Oxley in much more pro-business environments in other jurisdictions.

Panelists argued the NASDAQ has been “asleep at the switch” while the NYSE has been much more attuned to the unique needs of small-cap companies.

Rocky Lee, a partner of DLA Piper based in Beijing, said China will continue to be a hotbed of potential for consumer and government spending on technology and infrastructure.

As many investors handle their money conservatively in light of the current economic crisis, one panelist said, enormous opportunity might lie in doing the exact opposite and investing aggressively.