U.S. policy errors crimping venture capital-exec

HONG KONG Nov 15 (Reuters) - Asia should avoid the policy mistakes hindering the growth of the U.S. venture capital sector as it seeks to develop the industry locally, an executive with venture capital firm Kleiner Perkins Caufield & Byers said on Thursday.

These include high cost of going public, caused by the stringent requirements of U.S. Sarbanes-Oxley legislation, and overly restrictive immigration policy, added Ted Schlein, a managing director with the California firm.

"(In terms of) fostering a friendly regulatory system, we have done a lot to hurt that inside the United States," he told an industry conference in Hong Kong.

"These are things please don't copy (from) the U.S., because I don't think it's in your best interests. Or try to head them off and avoid them."

Schlein is also the chairman of the U.S. National Venture Capital Association, which serves as the industry's lobby group.

Kleiner Perkins is best know as an early backer of silicon valley success stories including Google Inc., Amazon.com, Netscape and Sun Microsystems.

It was back in the headlines this month when it announced former U.S. vice president and co-winner of the Nobel Peace Prize Al Gore would become a partner.

The firm made a major bet on Asia in April when it announced it would enter the high growth Chinese market with a $360 million fund and a team of veteran local investors.

Former Symantec Corp executive Schlein said for all of its policy successes, the United States was hindering its own industry with overly stringent regulation in some areas.

He said small firms that want to list now have to spend $1-$2 million a year to comply with Sarbanes-Oxley legislation, which has discouraged many from seeking growth capital from public markets.

This means the average annual number of venture-backed initial public offerings has dropped this decade compared with the 1990's, he said, while the fewer companies coming to market typically start trading with a much larger capitalisations.

"Is it better these companies are forced to be far more mature before they access the public markets? Probably in some cases," he said.

"In some case I would argue it cuts off the ability for these companies to get public and start their growth trajectory, start the job creation."

He said U.S. immigration policy should also be more accommodative towards foreigners who take high level science and engineering degrees in the United States.

"Let's staple a green card to their diploma and keep them in the U.S. Why discourage them and have them go back home to go build their companies," he said.

"Twenty-five percent of the venture backed companies in the United States have been founded by foreign-born nationals." (Editing by David Cowell)