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It Will Be Up to the SEC to Define Venture Capital

With the financial reform bill set to eliminate the 15 client rule exemption for registration under the Investment Advisers Act, the only remaining exemption for fund companies with over $150 million in assets under management will be for venture capital. The Congressional conference decided to not...

Dodd–Frank Wall Street Reform and Consumer Protection Act Regulation of Hedge Funds

Hedge funds were a key subject of debate during the passage of Dodd-Frank. While the funds were not tied to the causes of the market crisis, they do represent large pools of assets which can impact the market. Regulators frequently note that they have inadequate information about the funds. Accordingly...

The SEC Defines Venture Capital

The SEC is moving much faster in releasing proposed rules after the SEC Open Meetings. After Friday morning's open meeting discussing the exemption from registration for venture capital funds, the SEC has released the full text of the proposed rule merely several hours later. I have been waiting...

Private Equity, Venture Capital and Hedge Fund Taxation

Private Equity, Venture Capital and Hedge Fund Taxation

Update on the VC World from Mark Heesen of the NVCA

The National Venture Capital Association (NVCA) held its annual breakfast in Washington DC yesterday. As part of the breakfast, Mark Heesen, President of the NVCA, provided some interesting thoughts regarding the state of the VC industry, which are summarized courtesy of Matt Gorra and Matt VanderGoot...

What is a Venture Capital Fund?

For me, venture capital has always been a fuzzy term. They generally invest in start-ups and provide early stage capital for their growth. As a company progresses through later rounds of funding, that definition does not seem to work that well. For example, would you label the latest rounds of funding...

Troutman Sanders: China Finance: Venture Capital and Private Equity Cleantech Fund Structures for China Investments

This article is written by Edward Epstein , Office Managing Partner of Troutman Sanders' Shanghai Office. It appeared first in ACORE's Summer 2011 US-China Quarterly Market Review and is reprinted with ACORE's permission. To access the full Quarterly Market Review, click here and use this...

Private Equity in Blue: Hoeksema v. Asprey International Ltd. and Rigas.

On March 13, Vernon Bruce Hoeksema ("Hoeksema") commenced an action in the Southern District of New York (12 CIV 1841) against Asprey International Ltd. ('Asprey")and John P. Rigas ("Rigas") asserting claims of breach of contract, common law fraud, fraud in the inducement...

Maryland Securities Commissioner Issues New Order Adopting a Private Fund Exemption Based on Model NASAA Rule

On June 15, 2012, the Maryland Securities Commissioner issued an order adopting the NASAA model rule exemption for investment advisers to private funds . Like the model rule, the new order issued by the Maryland Securities Commissioner , provides for an exemption from registration for "private...

SEC Misses Deadline to Issue Regulations Eliminating the General Solicitation Prohibition in Regulation D Private Placements

For startups looking to raise capital, Rule 506 of Regulation D is probably the most commonly used exemption from securities registration requirements. It allows a company to make offers and sales to an unlimited number of accredited investors[1] in order to raise an unlimited amount of money. One of...

SEC Continues to Miss Key Deadline in Implementing JOBS Act, Drawing Ire of Congress

The JOBS Act contained two provisions that have the potential to help startups in their capital-raising efforts: (1) reform of Regulation D, which will permit more widespread solicitation of angel investors (this is also frequently referred to as the repeal of the general solicitation prohibition) and...

The SEC (Finally) Issues a Preliminary Rule for Repeal of the Regulation D General Solicitation Requirements

Yesterday, the SEC finally released its proposed rule to amend Rule 506 of Regulation D to eliminate the general solicitation prohibition for private placement offerings . As I've discussed in a previous post, the SEC's continued delays in issuing this rule has resulted in considerable frustration...

Corporate Venture Capital - Big Second Quarter

CB Insights has published summary data regarding Q2 2013 corporate venture capital investing, showing CVC investment in 126 deals with total funding of US$1.7 billion. This marks a large increase over the past two quarters (both at US$1.4B) and an even larger increase year-over-year (with Q2 2012 at...

Venture Capital Term Sheet Negotiation: Valuation, Capitalization Tables, and Price per Share

This post is the second in a series giving practical advice to startups on understanding and negotiating a venture capital term sheet. This post will focus on pre-money valuation, capitalization, and price per share. Read the introduction to this series here. Previously, we provided a general overview...

Venture Capital Term Sheet Negotiation — Part 6: Voting Rights and Protective Provisions

This post is the sixth in a series giving practical advice to startups with respect to understanding and negotiating a venture capital term sheet. In the prior five posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions , discussed valuation...

Venture Capital Term Sheet Negotiation — Part 8: Carve-Outs to Anti-Dilution Provisions and “Pay to Play” Provisions

This post is the eighth in a series giving practical advice to startups with respect to understanding and negotiating a venture capital term sheet. In the prior seven posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions , discussed valuation...

Venture Capital Term Sheet Negotiation — Part 10: Registration Rights

This post is the tenth in a series giving practical advice to startups with respect to understanding and negotiating a venture capital term sheet. In the prior nine posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions , discussed valuation...

Venture Capital Term Sheet Negotiation — Part 12: Preemptive Rights

This post is the twelfth in a series giving practical advice to startups with respect to understanding and negotiating a venture capital term sheet. In the prior eleven posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions , discussed...

What Is Micro-Venture Capital?

Over the past few years, a new funding source for seed stage startups has developed and quickly become an integral part of the startup ecosystem. This newer brand of investor is typically labeled a seed venture or micro-venture capital fund (a Micro-VC). Micro-VCs are smaller venture firms that primarily...

Venture Capital Term Sheet Negotiation — Part 14: Representations and Warranties

This post is the fourteenth in a series giving practical advice to startups with respect to understanding and negotiating a venture capital term sheet. In the prior thirteen posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions and discussed...

Venture Capital Term Sheet Negotiation — Part 16: Closing Conditions and Expenses

In the prior fifteen posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions and discussed valuation, cap tables, and the price per share , dividends on preferred stock , liquidation preferences , the conversion rights and features of preferred...

Venture Capital Term Sheet Negotiation — Part 20: Founders’ Stock

This post is the twentieth in a series giving practical advice to startups with respect to understanding and negotiating a venture capital term sheet. In the prior nineteen posts, we provided an introduction to negotiation of the term sheet and discussed binding and non-binding provisions and discussed...

Recap of Q2 2015 Venture Capital Activity by Region

PitchBook just released its analysis of 2Q 2015 venture capital activity by region , focusing on the six of the most active U.S. regions: the Bay Area ; Boston ; Los Angeles ; the Midwest ; New York ; and the Pacific Northwest . Below is also a quick summary of the Q2 2015 highlights by region: Bay...

Citizen VC No-Action Letter - the SEC Guidance on Online Private Placements

As a follow up to my previous blog post where I discussed the new CDIs relating to the definition of "general solicitation" in private offerings conducted under Rule 506(b), I decided to discuss the recently issued SEC no-action letter to Citizen VC . This no-action letter is all about the...

Court Overturns DHS Delay of International Entrepreneur Rule: NVCA v. Duke

NVCA, Dec. 1, 2017 - "Foreign entrepreneurs who want to build innovative companies in the U.S. received good news today when United States District Judge James E. Boasberg of the U.S. District Court for the District of Columbia ruled in favor of a lawsuit filed by the National Venture Capital Association...