This document proposes research questions about regulatory risk for emerging companies. It notes that while venture capitalists understand certain risks, regulatory risk is complex and inevitable. It suggests developing a taxonomy of regulatory risks and examining differences between types (e.g. federal legislation vs. local regulations). It also asks how companies in regulated industries address risk and if techniques like new valuation models, lobbying, or financial engineering could help mitigate risks. The proposal is from Joe Vladeck to discuss these issues further.

1. InSITE Fellowship
S P E C I A L P R O J E C T ( P R O P O S A L )
( J O E V L A D E C K )

2. E M E R G I N G C O M P A N I E S A N D R E G U L A T O R Y R I S K

3. V C s A R E W E L L - A T T U N E D C E R T A I N R I S K S . . .

4. . . . B U T R E G U L A T O R Y R I S K S A R E D I F F E R E N T

5. “The conventional
Silicon Valley wisdom is
to steer well clear of
regulatory risk”
J O S H H A N N A H , M A T R I X P A R T N E R S
( P A S S E D O N F U N D I N G U B E R )

6. ( R(E TSEWAOR CKHEY Q TUEENSETTIOSN )S )

7. UberX
UberBLACK
UberSUV
UberTAXI
U S E RC I T YT R I PE T C .
( T E N E T 1 : R E G U L A T O R Y R I S K I S C O M P L E X )

8. ADA LITIGATION
LICENSING
INSURANCE
LOCAL LEGISLATURES
UberX
UberBLACK
UberSUV
UberTAXI
U S E RC I T YT R I PE T C .
( T E N E T 1 : R E G U L A T O R Y R I S K I S C O M P L E X )

9. ( T E N E T 2 : R E G U L A T O R Y R I S K I S I N E S C A P A B L E )

10. (( RREESSEEAARRCCHH QQUUEESSTTIIOONNSS ))

11. Is there a useful taxonomy of
regulatory risks?

12. ( F O R E X A M P L E )
S E R I O U S
M I L D
N A R R O WB R O A D

13. Are there material differences
between various types of regulatory
risks?

14. ( F O R E X A M P L E : F E D E R A L L E G I S L A T I O N )

15. ( F O R E X A M P L E : S T A T E L O C A L L E G I S L A T I O N )

16. ( F O R E X A M P L E : A G E N C Y R E G U L A T I O N S )

17. ( F O R E X A M P L E : L I T I G A T I O N )

18. How do VCs and entrepreneurs in
historically regulated industries
assess regulatory risk?

19. ( F O R E X A M P L E : B I O T E C H )

20. Are there techniques that can be
borrowed / developed to mitigate
regulatory risks?

21. ( F O R E X A M P L E : N E W V A L U A T I O N M O D E L S )

22. ( F O R E X A M P L E : L O B B Y I N G )

23. ( F O R E X A M P L E : F I N A N C I A L E N G I N E E R I N G )

24. Joe Vladeck
J P V 3 3 @ G E O R G E T OWN . E D U
( L E T ’ S D I S C U S S ! )

25. • Slide
2
• Post-­‐Its:
h0ps://www.flickr.com/photos/jakecapve/49915119
• FTC:
h0ps://www.flickr.com/photos/mulaohu/465663338
• Slide
3:
Pike
Place
Market
•
h0ps://www.flickr.com/photos/argonz/6715647997
• Slide
4:
Dept.
of
Jusce
• h0ps://www.flickr.com/photos/vpickering/8518180983
•
Slide
5:
Josh
Hannah
•
h0p://www.matrixpartners.com/team/josh-­‐hannah/
• Slide
14:
Congress
•
h0p://en.wikipedia.org/wiki/United_States_Congress
• Slide
15:
Michigan
Local
Gov’t
Conference
•
h0ps://www.flickr.com/photos/michigancommunies/6235048985
• Slide
16:
Regulaons.gov
•
h0p://www.regulaons.gov
• Slide
17:
Supreme
Court
Jusces
•
h0p://upload.wikimedia.org/wikipedia/commons/4/43/Supreme_Court_US_2010.jpg
• Slide
21:
Real
Opons
Valuaon
• h0p://en.wikipedia.org/wiki/Datar%E2%80%93Mathews_method_for_real_opon_valuaon#mediaviewer/
File:Datar_Mathews_Real_Opon_Method_Wikipedia_Fig_4_Comparison_of_Black-­‐Scholes_and_Datar-­‐
Mathews_frameworks.png
• Slide
22:
David
Plouffe
• h0ps://www.flickr.com/photos/barackobamadotcom/5655671261
• Slide
23:
Can
Financial
Engineering
Cure
Cancer?
• h0p://www.argentumlux.org/documents/Can_Financial_Engineering_Cure_Cancer.pdf
( P H O T O S )