This piece was originally published at GenFKD.
Startup regulation reform is needed to empower younger workers to create the industries of tomorrow. The great leaps of faith that people take when they join startups is currently what’s hot in American business, and its presence is felt throughout our culture. One example is the Netflix series Silicon Valley, a snarky depiction of the weirdness of dot com industry in California. The show is a not-so-veiled depiction of the oddity of startup life in the real world, and how bizarre business norms can be in the wild wild west of Silicon Valley.
As the digital economy takes front and center in our daily lives, more entrepreneurs are trying their luck and starting businesses to get a piece of the action. While start-up life is very challenging in itself, there are many regulatory hurdles that only make life harder for these business savvy risk takers. A Minnesota Congressman, Erik Paulson, is trying change the regulation that can be a barrier to attracting the best talent to startups.
From Paulsen’s Congressional Website:
The Empowering Employees through Stock Ownership Act (H.R. 5719) helps employees keep their ownership interests and utilize all options offered to them when taking a new and exciting job at a startup. At many startup companies, employees are offered stock options or equity interest as part of their compensation. Currently, if employees exercise these options, they are required to immediately pay taxes often times before they may have the available cash to do so. This bipartisan legislation will grow startup small businesses by helping make these jobs more attractive to top talent and empowering their employees
Offering stock options and equity shares are very effective ways to attract talent to promising startups. Right now, taxes are due immediately upon exercising these options, and in many cases, workers need to cash their options in just to make it.
The world has changed radically in the past few years, and much regulatory reform is needed for the new digital world. This is just one example of many policies that are clearly behind the times, and need to be updated for our new economic reality.
GenFKD is equipping millennials with the skills and education necessary to create and lead the “new economy.” To learn more, head over to GenFKD.org.
Founded in 2013 as a financial literacy organization, GenFKD is growing into an organization that’s revolutionizing American higher education. Through skills-based training and student-first reforms, GenFKD is advancing a system of “new education” focused on improving post-graduate outcomes in areas of gainful employment, financial preparedness and entrepreneurial readiness.