The third policy chapter focuses on various kinds of regulation that impact entrepreneurs. Both theory and evidence points to some clear-cut effects: for example, negative effects on entrepreneurship from entry regulations and employment protection legislation; on the other hand, positive effects are associated with relatively forgiving bankruptcy laws. Entrepreneurship policy is also shaped by the quality of legal institutions and the enforcement of property rights. The chapter also discusses how credit markets regulations affect entrepreneurs who seek to borrow funds from small business lenders. Entrepreneurs are often hit extra hard by costs of compliance with regulations, which are steeper for them than established incumbents. The chapter closes with a detailed discussion of how governments should go about regulating entrepreneurs if they want to minimize adverse impacts on this all-important driver of economic progress.