there are many federal laws in the US (and im sure other countries) that only apply when your company reaches a certain size. This is the most obvious way to balance regulatory burden on new companies while still enforcing regulations on large companies that have enough resources to comply.

Selective enforcement is just tyranny, but what I think they were getting at is a minimum size enshrined in law. I don't think it's a great idea, really highlights how arbitrary this all is and presents a risk of advantaging the worst actors more than real makers, but it's a valid way forward.

The law makes sense, the details where things don't make sense