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Marc Andreessen: Sarbanes–Oxley Killing Tech IPOs


Marc Andreessen believes too much regulation is stifling innovation.

Appearing on CNBC's SquawkBox earlier this morning, Andreessen told CNBC that The Sarbanes Oxley Act is “effectively killing tech IPOs.” By imposing inordinate liabilities and resource allocation on public companies, he said the Act is forcing promising Silicon Valley companies to remain private as long as they can, so that their capital can be focused on areas core to their growth.

The Netscape co-founder said that he understands, and agrees with, the principal role of the act to prevent Enron-type fraudulent activity. However, he points out that none of the culprits that resulted in the institution of the Sarbanes-Oxley act emerged from Silicon Valley. He believes the broad-based regulation is, in essence, an indiscriminate hammer on companies whose intent of going public is far from defrauding investors.

On the other hand, Marc Andreessen does not see Silicon Valley spending too much time worrying about regulation as a whole. That, he says, is not for a lack of care, but rather for the lack of time in a non-stop innovation culture of the sector.

When asked on the current election cycle, Andreessen said he is a Romney supporter, as he sees the Republican candidate to be a dyen-in-the-wool business practitioner that understands the concerns of the business community. That said, while pointing out that he shared Romney's views on regulation, their views diverged sharply when it came to China. Andreessen remained hopeful that Romney's current rhetoric on the subject would not result in a trade war with a very strategic trading partner for the United States.

On the migration of low-value tech jobs to China, Andreessen said he does not believe those jobs are coming back to the U.S. Nor should that be considered a bad thing, he notes, pointing out that a rising tide lifts all boats. Taking the Apple (NASDAQ: AAPL) example, he points out that the intellectual property, and the high-value jobs associated with them, are resolutely American, and that will ensure American prosperity going forward. He notes that Chinese manufacturing of goods helps American companies in addition to lifting China's living standards. Considering its role as an emerging market for American goods, Andreessen thinks that should not be considered a negative.

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