Dual Legislative Impact: 2025 Sees Both Expanded Startup Benefits and Increased Regulatory Burdens

A recent social media post by venture capitalist Collin McCune has ignited discussion regarding the perceived disconnect between policymakers' stated support for entrepreneurs and the practical impact of new legislation. McCune, Head of Government Affairs at Andreessen Horowitz (a19z), highlighted a pattern where legislators praise "the spirit of American entrepreneurs" while simultaneously backing bills that could hinder new founders.

This comes as the "One Big Beautiful Bill Act" (OBBBA), signed into law on July 4, 2025, has significantly expanded Qualified Small Business Stock (QSBS) benefits. The OBBBA introduces a tiered gain exclusion schedule for QSBS, allowing 50% exclusion after three years, 75% after four years, and retaining 100% after five years. It also raises the exclusion cap from $10 million to $15 million and increases the gross asset threshold for eligible companies from $50 million to $75 million, aiming to boost early-stage investment and liquidity.

McCune's tweet, however, suggests a broader concern: > "A Senator praises the “spirit of American entrepreneurs” in one breath. Days later, they back a bill that would make it nearly impossible for new founders to compete. This isn’t an accident. It’s a pattern. Policymakers say they love builders. Their rules say the opposite. Why the disconnect? ⬇️" As a prominent advocate for "Little Tech," McCune's firm, a19z, frequently argues that government policy often impedes innovation despite pro-entrepreneurial rhetoric.

Indeed, while the OBBBA offers significant tax advantages, 2025 has also seen the introduction of various regulatory changes that could impose new burdens on startups. These include increased scrutiny on antitrust and competition, which may indirectly limit acquisition opportunities for emerging companies. New federal and state-level data privacy and cybersecurity standards demand more robust compliance efforts, posing a significant challenge for resource-limited startups.

Furthermore, updates to labor and employment laws, such as potential changes to independent contractor classifications and expanded paid leave mandates, could increase operational costs and administrative complexities. The Corporate Transparency Act (CTA) also requires most small businesses to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), adding another administrative layer for new entities. This complex legislative landscape presents a dual reality for American entrepreneurs, balancing new opportunities with growing compliance demands.