Doll Blames PE Industry for Increased Tax Scrutiny

Dixon Doll, co-founder of DCM and the next in line to serve as chairman of the National Venture Capital Association, is not pulling any punches when it comes to his buyout industry peers.At an East Coast conference last week, Doll said that the NVCA is working nonstop to block changes in the tax code that might affect the venture industry as he pointed blame at the buyout titans for all the attention being focused on the industry. The reason for the legislative scrutiny is “simply because of the unvbelievable egos of the guys running the PE firms like Blackstone and KKR,” he said. “They put big targets on their back … calling attention to themselves in a nonflattering way.”

Speaking on stage at a Red Herring conference in Boston, Doll said that the NVCA has been successful in getting the message out that VCs are job creators, and believes that the U.S. Congress will avoid any attempts to suck the VC industry in with legislation mostly aimed at the buyout industry.

Doll also pointed out that job creation is the antithesis to taking companies private. “It’s ‘Barbarians at the Gate’ all over again,” Doll said in reference to the book and the movie, which focused on the contentious leveraged buyout of RJR Nabisco, which pitted CEO F. Ross Johnson against buyout pros Henry Kravis and George Roberts.

Doll also said that the NVCA has lobbied against higher taxes on carried interest. And the trade group wants to ensure that lawmakers pushing a tax hike that could hit The Blackstone Group and other private equity outfits that similarly plan to go public don’t next set their sights on the VC industry.

Doll conceded the VC industry has “our work cut out for us” to prevent any general overhaul of tax laws from invariably affecting VC firms and the nation’s budding entrepreneurs.