SEC Issues Final Rules Re VC Fund Exemption From Investment Advisers Act

You can find the final rules here:

Final Rule

Also see:

SEC Press Release

From the Final Rule:

In summary, the rule defines a venture capital fund as a private fund that: (i) holds no more than 20 percent of the fund‘s capital commitments in non-qualifying investments (other than short-term holdings) (qualifying investments generally consist of equity securities of qualifying portfolio companies that are directly acquired by the fund, which we discuss below); (ii) does not borrow or otherwise incur leverage, other than limited short-term borrowing (excluding certain guarantees of qualifying portfolio company obligations by the fund); (iii) does not offer its investors redemption or other similar liquidity rights except in extraordinary circumstances; (iv) represents itself as pursuing a venture capital strategy to its investors and prospective investors; and (v) is not registered under the Investment Company Act and has not elected to be treated as a business development company (BDC).

About Joe Wallin

Joe Wallin focuses on emerging, high growth, and startup companies. Joe frequently represents companies in angel and venture financings, mergers and acquisitions, and other significant business transactions. Joe also represents investors in U.S. businesses, and provides general counsel services for companies from startup to post-public.
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