Startups News Digest 5/25/2018

Our weekly take on some of the biggest stories in startup and tech policy. To receive this weekly digest in your inbox, sign up at

The Big Story: Fudging the FBI’s numbers. The FBI has been misrepresenting how many encrypted devices it can’t get into as it pushes for tech companies to weaken the security of their products.

While the FBI has been telling lawmakers for months that it has nearly 8,000 locked phones it can’t get into despite court orders granted as part of criminal investigations, a new report this week says that number is actually between 1,000 and 2,000. According to the Washington Post, the FBI had been using multiple databases to track the number of unlock-able phones, which led to counting devices multiple times.

As Evan said in a statement this week: “Contrary to the FBI’s claims, encryption enhances public safety, protecting internet users around the world from malicious hackers, government surveillance, and more….If policymakers want to have a serious, balanced debate about law enforcement’s push to have tech companies—including startups—intentionally weaken their products, they need real facts, not over inflated data that paint a more dramatic picture than actually exists.

Policy Roundup:

GDPR is here.
Europe’s new sweeping privacy rules went into effect today, and its sometimes-ambiguous requirements and steep fines could cut startups out of European markets.

Fixing the 99 investor problem. The House this week passed a bill aimed at unwinding purported regulatory overreach in 2010's Dodd–Frank Wall Street Reform and Consumer Protection Act, passed in the wake of the 2008 financial collapse. The bill contains a major victory for the startup community: a fix to the "99 investor problem"—an SEC rule holding that LLCs must have less than 100 investors, which severely limits the types of funding structures that investors can create. The House-passed bill expands the number of investors a qualifying venture capital funds can have to 250.

PTO oversight. The House Judiciary Committee conducted an oversight hearing of the Patent and Trademark Office this week, where PTO Director Andrei Iancu touched on issues that are critical to the startup community, including the Patent Trial and Appeal Board and Section 101 of the Patent Act.

Expanding reviews of foreign investments. Two congressional committees approved versions of legislation that would expand the kind of transactions involving foreign investors that are subject to review by the Committee on Foreign Investment in the U.S.

Scrapping International Entrepreneur Rule. The Trump Administration announced this week that it is formally ending the “Startup Visa” program which was aimed at bringing foreign entrepreneurs to the U.S. to build companies.

Bitcoin investigation. The Justice Department is working with the Commodity Futures Trading Commission to investigate whether traders are manipulating the price of digital currencies, including Bitcoin.

Startup Roundup:

Engine welcomed its newest team member this week, our External Affairs Manager Jen Fox. Read all about her experience doing grassroots organizing for the National Restaurant Association and her plans to help amplify the voice of startups. If you are interested in being featured in our #StartupsEverywhere series, be sure to reach out to Jen at