“I’ll definitely sue them.”

Hi, it’s Lizette. A proposed rule that will make it easier to sue VCs is roiling investors. “This is a big deal,” the VC trade group says. B [View in browser]( [Bloomberg]( Hi, it’s Lizette. A proposed rule that will make it easier to sue VCs is roiling investors. “This is a big deal,” the VC trade group says. But first… Today’s must-reads: • The University of Texas at Austin [banned TikTok]( on campus • Apple [debuts]( faster MacBook Pros and Mac Minis • Microsoft will [cut]( engineering jobs What's worrying VCs A potential new [rule]( from the US Securities and Exchange Commission is unsettling the venture capital class. The change would make it easier to sue investors for negligence, and could make VCs more culpable for failures at the startups they back. The rule, designed to address “lack of transparency, conflicts of interest” and other problems in the private markets, could be particularly impactful in a turbulent market environment. Recent months’ spate of startup scandals includes (but isn’t limited to!) the implosion of the now-disgraced crypto exchange FTX, which drew praise and dollars from some of the top names in venture capital. Blowback to the proposed rule has been fierce. VCs say it would get in the way of one of their core functions: providing assistance to portfolio companies. According to the industry trade group the National Venture Capital Association, if the change goes through with its current wording, the more involved a VC is in a company, the more culpable that VC could be for problems down the line. “This would impact their ability to get involved and help,” said Charlotte Savercool, vice president of government affairs for the NVCA. The group called on the SEC last year to abandon the proposal, calling it “profoundly flawed.” The final rule, which has been a year in the making, could come as soon as April with a passing vote from the full commission then putting it into effect. Politico [earlier this month]( reported that the SEC was “putting the final touches” on the language. There’s reason to expect that the rule would have a real impact fairly quickly. One investor who I spoke to who has given money to venture firms said the value of his holdings are down “considerably.” Although the decline tracks the broader market’s dip, he believes that one of the VC firms he invested with failed to properly oversee the startups it backed and aggravated his losses. “If this rule goes through, I’ll definitely sue them,” said the investor, who spoke on condition of anonymity. Legal protections aren’t the only thing VCs are worried about. The SEC’s rule change could also alter how venture firms raise funds. It would limit the types of terms VCs can negotiate with their investors, and require them to disclose the terms with all investors. That could make it harder for new VC firms to raise their first funds: The attractive terms they offer their first anchor investors would be shared, and possibly expected, by other backers. “This is a big deal. Our members are really concerned about it,” said Savercool. “Everyone in the industry is watching and waiting for something to come out.” —[Lizette Chapman](mailto:lchapman19@bloomberg.net) The big story Elon Musk’s rocket company SpaceX appears poised for a [breakout year](: planning to stage the first-ever commercial spacewalk and for the launch of as many as 100 flights. That success is despite—and some might say because of—Musk’s current preoccupation with Twitter and his other companies. Get fully charged Meta’s 54% market rally is [still on uncertain ground]( as critics remain skeptical of its metaverse projects. Britain’s biggest phone companies [will hike prices]( by as much as 14% as the country battles record-high inflation rates. Ukraine was the target of more than [2,000 digital attacks]( last year, a quarter of which attempted to breach government offices. Shares in Roblox [climbed 15%](, driven by better-than-expected bookings and an increase in active daily users. Follow Us More from Bloomberg Get Bloomberg Tech weeklies in your inbox: - [Power On]( for Apple scoops, consumer tech news and more, every Sunday - [Game On]( for reporting on the video game business, delivered on Friday - [Cyber Bulletin]( for exclusive coverage on the shadow world of hackers and cyber-espionage, sent every Wednesday Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Tech Daily newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](