Strictly Business

A Business Law Blog for Entrepreneurs, Startups, Venture Capital, and the Private Fund Industry.

  • About the Authors
    • Alexander J. Davie
    • Casey W. Riggs
    • J. Chandler Waits
    • Jennifer Wilson
    • Taylor K. Wilkins
  • Categories
    • Effective Attorney-Client Relationships
    • General Business Law
    • Intellectual Property
    • Mergers & Acquisitions
    • Private Equity and Hedge Funds
    • Startups and Venture Capital
    • Technology
  • Guides
    • Exempt Reporting Adviser Filing Requirements
    • State Investment Adviser Registration

Qualified Purchaser Archives

Accredited Investors vs. Qualified Clients vs. Qualified Purchasers: Understanding Investor Qualifications

August 17, 2017 by Alexander J. Davie

image of a number of investors interesting in a productPrivate funds, such as hedge funds, private equity funds, and venture capital funds, are governed by a host of intersecting federal laws that impact who can invest in these fund, including the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, and the Investment Company Act of 1940. This post provides prospective and existing private fund managers with a basic understanding of the primary categories of investors and why understanding these categories is essential in structuring and marketing a fund.

[Read more…]

Share this:

  • Twitter
  • LinkedIn

Filed Under: Private Equity and Hedge Funds Tagged With: Accredited Investor, Hedge Fund, PF Recent, Private Equity Fund, Private Fund, Qualified Client, Qualified Purchaser, Recent, Venture Capital Fund

Deciphering the SEC’s New Definition of a “Venture Capital Fund”: Part 10 – What about existing funds?

December 7, 2011 by Alexander J. Davie

This is the tenth post in a series exploring recent SEC regulations that define the term “venture capital fund” for the purposes of determining whether a fund’s manager is exempt from SEC registration requirements under the Dodd-Frank Act.

Previously in the first installment of this series, I provided a general overview of how the SEC has defined the term “venture capital fund.” A private fund manager that solely advises venture capital funds (as defined in SEC regulations) qualifies for an exemption from investment adviser registration under the Investment Advisers Act. In my subsequent posts, I described the requirements private funds must meet in order to qualify for this exemption.  The requirements are quite specific, and therefore, many existing funds would be required to register, which would be an unanticipated consequence for these fund managers that relied on then-current law to structure their funds.  Luckily, the SEC has provided grandfathering provisions in the regulations which exempt funds that raised their capital prior to the effectiveness of the new regulations.  In this post, I will discuss such how grandfathering provisions work. [Read more…]

Share this:

  • Twitter
  • LinkedIn

Filed Under: Private Equity and Hedge Funds Tagged With: Dodd-Frank, Form ADV, Investment Adviser, Qualified Purchaser, SEC, Securities

Deciphering the SEC’s New Definition of a “Venture Capital Fund”: Part 9 – Private Funds Only

December 1, 2011 by Alexander J. Davie

This is the ninth post in a series exploring recent SEC regulations that define the term “venture capital fund” for the purposes of determining whether a fund’s manager is exempt from SEC registration requirements under the Dodd-Frank Act.

Previously in the first installment of this series, I provided a general overview of how the SEC has defined the term “venture capital fund.” A private fund manager that solely advises venture capital funds (as defined in SEC regulations) qualifies for an exemption from investment adviser registration under the Investment Advisers Act. There are five elements to the definition. The first element is that the fund must represent to investors and potential investors that it pursues a venture capital strategy. The second element is that no more than 20% of the fund’s total assets (including committed but not yet invested capital) can be invested in assets that are not “qualifying investments” or “short term holdings.” The third element is the fund cannot borrow in excess of 15 percent of the fund’s aggregate capital contributions and uncalled committed capital. The fourth element is that the fund cannot provide its investors with redemption rights, except in “extraordinary circumstances.”  In this post, I will discuss the fifth and final element of the definition, which prohibits a VC fund from registering as an investment company. [Read more…]

Share this:

  • Twitter
  • LinkedIn

Filed Under: Private Equity and Hedge Funds Tagged With: Business Development Company, Dodd-Frank, Form ADV, Investment Adviser, Qualified Purchaser, SEC, Securities

About the editor

Alexander Davie image
Strictly Business is a business law blog for entrepreneurs, startups, venture capital, and the private fund industry. Its editor is Alexander J. Davie, an attorney at Riggs Davie PLC based in Nashville, Tennessee. His practice focuses on corporate, securities, and business law. He works mainly with technology companies, including startups and emerging companies, and private equity, venture capital, and hedge funds.
Contact Alex

Connect

Riggs Davie PLC logo

Categories

  • Effective Attorney-Client Relationships
  • General Business Law
  • Intellectual Property
  • Mergers & Acquisitions
  • Private Equity and Hedge Funds
  • Startups and Venture Capital
  • Technology

Subscribe

    Sign up today to receive ongoing updates from Strictly Business.

    Copyright © 2011-20 - Alexander J. Davie
    Attorney Advertising | Privacy Policy