Dan Primack

The U.S. House of Representatives has just begun floor debate on the so-called “tax extenders bill" (HR 4213), which is where the carried interest tax change is housed. You can watch it live at http://houselive.gov There has been a lot of back-and-forth movement on this issue over the past 24 hours, including possible changes to that 75/25 split and possible changes to when the change would become effective. It is expected to come to a vote today, at which point the Senate can have at it (even though they aren’t expected to get to it before recess). Yesterday we published a letter sent by the NVCA to its members, which basically highlighted the legislation’s state of flux. A reader commented that “This must be killing you Dan, you really wanted to see the ‘VC carry’ get taxed as ordinary income.”

The National Venture Capital Association just sent out an email to its members, informing them of new developments in the Congressional carried interest debate. It also said that it would hold a member call tomorrow afternoon. Full text of the notice is posted after the jump, and signed by NVCA president Mark Heesen:

Rob Glaser, founder and former CEO of RealNetworks, today announced that he has become a venture partner with Accel Partners. This is no new relationship, as Accel first backed RealNetworks more than a dozen years ago and Accel's Jim Breyer remained on the board for years after it went public. But it is Glaser's first official dip into VC waters, so we've got some questions for him: The term “venture partner” means different things to different people and firms, particularly in terms of time commitment and longevity. How do you view this position with Accel? The time commitment is half-time. I’m not a lawyer who organizes his life into 15-minute increments, but I’m going to have other things. I’m still chairman of Real, am helping some entrepreneurs start a couple of companies and still have a bunch of charity work like my family foundation. So it will be significant, but not fulltime. I do, though hope it’s a long-term relationship. We’re both entering this chapter with our eyes open. In terms of what I’ll actually be doing, my sector focus will be on social media and the social intersection of mobile with physical location and other characteristics. The second element of my focus is that I’m Seattle-based, so I hope to introduce Accel to lots of great local entrepreneurs. There are four major mobile companies here – T-Mobile is headquartered here and AT&T is about half here – and we have a great traditional of mobile entrepreneurship like McCaw and others. Plus Microsoft – of which I’m an alum – Real and Amazon.

Flipping through the regulatory filings yesterday, and spotted one for ModCloth – an innovative online retailer that previously had raised a few million dollars from First Round Capital, Mike Maples and lots of individual angels. Looked huge by comparison -- $19.82m called of a $32.62m offer – so figured it was worth a closer look. Turns out the deal is effectively a recap, in which new investors bought Series B stock and the company bought back Series A and Series A-1 shares from many of the smaller angels. No official word on the lead, but rumor is that it’s a big Silicon Valley firm whose name sounds a bit like ---- Foley or --- Rose.

Angel investor and geek Renaissance man Chris Sacca appeared on stage earlier today at TechCrunch Disrupt, and decided to play around with a new music composing/publishing platform called UJam. More specifically, he sang part of a Sinatra tune. Not as original as The Riskmaster, but still ballsy in front of such a large crowd. Thanks to @Scobleizer for taping (go to the 0:43 mark):

Marc Poirier last week sent out an email announcing that he had left @Ventures after a dozen years, in order to become a managing director with Spinnaker Capital. Not the kind of thing that garnered Techmeme headlines -- or headlines anywhere, for that matter -- but it would have were the blogosphere around during that dotcom boom. @Ventures -- then known as CMGI @Ventures -- was one of the most active and (theoreticaly) most well-capitalized VC firms in the world. Shortly after I began covering the market, it boasted three $1 billion funds -- although company executives would later try walking those numbers back as CMGI's stock price plunged. @Ventures has since morphed into a sleepy cleantech investment firm, and Poirier's departure leaves just one remaining team member from the good ole' days -- managing partner Pete Mills. But it got me to wondering about what happened to all those other folks. So, take a look after the jump...

Several months ago, I promised not to write again about carried interest taxation until relevant legislation either passed or was formally buried. Let me be the first to call me a liar (although perhaps that’s a bit harsh, as I was sincere at the time). But don’t worry: My goal this morning is not to relitigate the underlying issues. You know where I stand on those. Rather, what follows is to look at where things are at and what might happen once a bill does, indeed, pass. Where things stand: Last night, Senate and House Democrats said they would new legislation on carried interest taxation, as part of the “American Jobs and Closing Tax Loopholes Act of 2010.” Here is the relevant language, from a bill summary posted online: The bill would prevent investment fund managers from paying taxes at capital gains rates on investment management services income received as carried interest in an investment fund. To the extent that carried interest reflects a return on invested capital, the bill would continue to tax carried interest at capital gain tax rates. However, to the extent that carried interest does not reflect a return on invested capital, the bill would require investment fund managers to treat seventy-five percent (75%) of the remaining carried interest as ordinary income. A transition rule would apply prior to January 1, 2013. This proposal is currently being estimated by the Joint Committee on Taxation. So, 25% of carried interest would continue to be taxed as capital gains, while the remaining 75% would be treated as ordinary income. This would go into effect beginning 2013. The aforementioned “transition rule” for 2011 and 2012 is not spelled out, but I’ve heard that it may be a 50/50 split (i.e., 50% cap gains, 50% ordinary income). 2010 taxes would not be affected.

BrightSource Energy today announced $150 million in new VC funding, which it will use to develop utility-scale solar thermal power plants. A couple of readers emailed to ask if it was the largest venture financing of 2010, or even if it should count as a VC deal (as opposed, say, to project finance). The answer to the first question is "no" (it's number four) and the answer to the second question is "yes" (it's equity being contributed by, among others, traditional venture firms). But it reminded me that it's been a while since we updated our list of the year's top VC recipients (so far). Fairly liberal with the term "venture capital," but that's why this is an interim list rather than an official/final list. Get it after the jump...

I had promised not to post again about carried interest taxation until an actual bill passes (or fails to pass), but Reuters asked me to discuss it for our weekly small biz video hit. Sorry. Suffice to say, my position is still against the status quo. But if it makes (most of) you feel better, anchor Jen Rogers takes a nifty dig at me near the end...

LinkedIn is adding another independent director to its board, but CEO Jeff Weiner kept shrugging off IPO questions during a video interview earlier today with Reuters. Actually, he first said "no" when asked if the company is preparing to take LinkedIn public, but then walked it back a bit by simply repeating that the company is "focused on building the business." He also talks a bit about valuation, privacy and future acquisitions. See below: