Essentially, “the proposed laws would cover the range of funds that deal in derivatives, auction-rate and mortgage-backed securities, highly leveraged transactions and a slew of other instruments so complicated as to defy description. In registering, these funds would need to open their books to the government so that they could be duly monitored, thus limiting further risks to the financial system.” But in expanding these rules to include all pools of private capital, the consequences could make doing business in the private sector much harder.

Because venture capital firms deal with private stakes of equity securities, they do not present a threat of systemic risk in the way that massive, over-leveraged entities like AIG, Lehman, and the like did for the past half a decade. It’s important, now more than ever, that venture capital be thought of as separate from these aspects of our financial picture.

I think venture capital could undergo a grand reawakening in this new economic climate, and it’s important to protect that potential. Job growth, innovation, and entrepreneurial exuberance are staples of the America’s economic future, and should not be hampered by legislation that seeks to hold the shadier bodies of finance accountable for their investments and questionable hedging techniques.