California Commissioner Expresses Concern About Proposed Venture Capital Fund Definition


As I wrote in this early posting, California is ground zero for the venture capital industry. Many of our most succesful and innovative companies have been funded by the venture capital industry. Thus, it is good to see that Commissioner Preston DuFauchard has submitted this letter of comment with respect to the Securities and Exchange Commission’s proposed rule defining “venture capital fund”.

Readers will recall from this posting that the Dodd-Frank Act will eliminate the fewer-than-fifteen client exemption from the registration requirement of the Investment Advisers Act of 1940. However, Congress decided that “venture capital funds” will be exempt and it left it up to the SEC to define what these are. The comment period for the proposed rule expires today.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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