Regulation is always favoring the incumbent. Always. The mere act of acknowledging, studying and respecting regulation (even if favorable) is a discouraging factor for a beginner founder.

I think if studying the rules of running a business is enough work to discourage you from founding a business, then it’s probably not the right path for you anyway.

Who would you prefer building businesses? Those good at creating, innovating and leading? Or those good at studying and following rules?

This will shape the kind of society you end up with. It's also one explanation for the discrepancy between the development of the US and the state of EU.

To regulate something is to restrict it by very definition. If something is less accessible how exactly does that make it easier for smaller companies to compete and navigate the new regulations?

You can have regulations only apply to companies that operate in multiple states or countries, that are based on cash-on-hand, number of employees, amount of revenue, etc.

Not every rule need apply to every business.