Estate Tax Speaker: Jerry Fiddler

Estate Tax Speaker: Jerry Fiddler

San Francisco, CA
Principal of venture capital firm, Zygote Ventures, and Founder of tech company, Wind River Systems

Good morning. My name is Jerry Fiddler. I’m 59 years old. I live in Berkeley, California, and I’ve been an entrepreneur, business owner and investor for 30 years. I’m one of the 0.25% of the population who will owe the estate tax. 

I’m here today to talk about why I support a strong estate tax, and how the rhetoric about the estate tax killing small businesses and farms is off the mark. I think the estate tax is the best possible way to pay back into the common good.  I see it as a point of pride, not of pain, to be in a position to pay back in that way. That’s why I signed UFE’s Call to Preserve the Estate Tax.

I grew up in Chicago. My father owned a neighborhood fabric store. It was a true family business. My mom, my brother and I all worked there, and we all shared my Dad’s stress in running it and, ultimately, shared in its failure.  

I went to public schools, went to the University of Illinois, got a master’s degree in computer science, and got a job at Lawrence Berkeley National Laboratory where I did research on real time systems and computer architecture. Based on what I learned there, in 1981 I founded a company called Wind River Systems, which created embedded software for things like the internet and phone system, car ignition and brake systems, digital cameras, military systems, and spacecraft, including the Mars rovers.  Wind River, which went public in 1993 and was acquired by Intel in 2009, employed over 2,200 people at its peak.

Wind River wouldn’t have existed without government-funded research that I did at Lawrence Berkeley Laboratories. I wouldn’t have gotten that job at the lab if I hadn’t had a master’s degree. I wouldn’t have had a master’s or a bachelor’s degree if there weren’t a public university that provided me with financial aid. And if I hadn’t gone to a good high school, also public, I probably wouldn’t have gotten into the university.

So, do I, as a successful business owner in the US, owe some of that back to society at some point?  Absolutely, yes. Indeed, it will give me great pride to repay it, hopefully many-fold, through the estate tax. I have no problem with a three and a half million dollar exemption and a 45% rate as we had in 2009.

Like any successful business owner, I worked very hard, and I was also lucky. A lot of other people also worked hard and contributed sweat and ideas to build Wind River.  And my employees and I benefited from a whole system of public and private benefits – laws and enforcement, financial incentives, education, research, infrastructure, national defense – the list goes on, and all of these things are supported by tax dollars. 

I’m speaking today because I believe an estate tax is an important part of our tax system – and our society and our democracy. And frankly, I’m tired of hearing that the estate tax will kill small businesses and farms. For ten years, I’ve heard claims that the estate tax is the kiss of death for businesses, and it’s just not true. It offends me as a business person to be used as an excuse for weakening it.

Since I left Wind River, I’ve been doing a combination of running companies and non-profits, investing, teaching entrepreneurship and mentoring.  Basically, I’m either building businesses myself, or closely involved in helping others do so. I’m principal of Zygote Ventures, which invests in clean technology start-ups, and I’m also Chairman of Solazyme, which is growing algae to produce oil for a variety of uses, including powering Navy ships and aircraft.  Solazyme is 7 years old and has over 100 employees.

My dad was a small business owner, I’m an entrepreneur myself, and I spend most of my time these days helping other folks build small businesses. It’s a dream of the entrepreneurs I work with to build a company that’s worth three and a half million dollars. 

Most small businesses don’t come anywhere near the exemption. The traditional mom and pop businesses – the grocery store, the dry cleaner, the bakery, my dad’s fabric shop – just don’t have that kind of value. And most businesses, once they’re beyond a certain size, diversify their assets so paying some  estate tax does not threaten the business. I could go into more detail during the questions if you’d like.

The idea that we should throw out the whole estate tax, or raise the exemption even higher than three and a half million, using small business as an excuse on the basis of a few edge cases, is not the way we should make policy. As a small business owner and creator, I do not want it thrown out in my name.

Thank you.