Not only would there be costs associated with complying with regulations, but simply from a capitalist standpoint there is little reason (as discussed in the article) for the government to have a say in VC practices. Investors know the risk they are undertaking, have a solid financial standing, and are not trading in public securities.

I feel like the article wanted to point out the side-affects of this new legislation as it applies to VC funding. I don't think the intention of the law was to necessarily monitor VC operations, but with such a broad regulation that's what's going to happen.

Keep in mind though that at the same time there are some things the government is doing to promote small business, such as providing billions in funding for the Small Business Association. Not all bad I guess, but still not a fan...