As most fund managers have likely heard by now, on June 5, 2024, the US Court of Appeals for the Fifth Circuit vacated the private fund adviser rules that the Securities and Exchange Commission (SEC) adopted in summer 2023,...more
A Securities and Exchange Commission (SEC) rule that takes effect on July 1, 2024, will require fund managers who file Form 13F reports to publicly report – on an annual basis on Form N-PX – the manner in which they vote on...more
In late 2022, the Securities and Exchange Commission (SEC) adopted rule changes that will require institutional investment managers who file Form 13F to annually file a Form N-PX disclosing the manner in which they have voted...more
An interview with Jordan Silber, Partner at Cooley by Richard Hsu...more
If you’re starting out as a new firm and raising your first fund (or special purpose vehicle), there are a few securities laws principles that you’ll need to become familiar with. This post is intended to provide a quick...more
Managers of venture capital and private equity funds – who in general must ensure compliance with sanctions regimes to which they are obligated to comply – need to pay special attention to recently strengthened requirements...more
We are providing updates on our original post here to reflect the issuance of a final rule by the U.S. Treasury Department which will become effective on October 15, 2020. Between November 2018 (when the first regulations...more
I am getting quite a few questions lately from venture capital managers about Bitcoin, blockchain and token based offerings. The questions center primarily around the permissibility of the fund participating in these sorts of...more
The term co-investment is a pretty broad one. I consider it to include any situations in which LPs take additional stakes in portfolio companies that they are already indirectly invested in through their investments in...more
The private fund clients we work with are often excused from full registration as investment advisers (“RIAs”) with the SEC. But, most of them are still required to file with the SEC as “exempt reporting advisers” (“ERAs”),...more
The issue of whether to use a placement agent is one that we are asked to advise on quite frequently. It’s a good question, for sure. In our experience the answer varies from situation to situation, and may not be straight...more
In the United States, at both the federal and state level, investors that are public agencies (such as state and local government employee pension funds, public university endowments, etc.) are usually subject to rights of...more
ERISA is a U.S. federal statute which regulates, among other things, the management and investment of assets of employee benefit plans (such as U.S. pension plans, 401(k) plans and their related trusts). Importantly, ERISA’s...more
We have been getting a lot of questions lately about whether and how GDPR may apply to US and Asia based managers of venture capital funds. This is a rapidly evolving area, however, there is a sound legal view to the effect...more
After long debate concerning the need to reform the Committee on Foreign Investment in the United States (“CFIUS”) to address evolving national security threats and emerging technologies, the Foreign Investment Risk Review...more
Most clients we work with have gotten the letter from time to time: “Hi, our firm is acting as agent for Institution X, one of your limited partners, who are selling a portfolio of interests in venture capital funds.” The...more
Venture capital funds are closed-ended, long duration blind pools. In the many years following closing, the fund manager is permitted to operate and invest the fund in its discretion as long as it stays within some limited...more
We are often asked about the prevalent market options for structuring carried interest provisions in venture capital funds. In this post, we’ll speak of mainstream venture capital funds, so to speak. Terms differ in special...more
Historically, the incidence of “serious” defaults (“serious” meaning contribution failures that persist to a point in time at which consideration of enforcement action is necessary) in institutional venture capital funds is...more
We are often asked about the “market” rate for management fees in actively managed venture capital funds. This primer discusses mainstream venture capital funds, so to speak. If your fund is in the venture space but has...more
We are often asked, by both new and established managers, “where should I form my next venture capital fund”? We will hold the short list for purposes of this article at the discussion of Delaware versus Cayman, those being...more
As much of the world shelters in place, nearly every client conversation we have with our venture capital fund clients comes around to some version of the questions “what are you seeing” and “will all of this impact our fund...more
Be aware that part of the new tax law that came into effect January 1, 2018 imposes upon buyers of interests in U.S. entities taxed as partnerships (whether partnerships, LLCs, etc.) a new withholding requirement, under which...more
Effective immediately, there is a new requirement that each particular portfolio company interest which is the subject of a disposition event needs to have been held by the fund for more than 3 years in order for the...more
Certain important changes took effect on January 1, 2018 regarding underpayment of taxes by partnerships as well as the handling of tax inquiries including audits.
The biggest change is that the IRS can now come to collect...more