Strictly Business

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

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    • Alexander J. Davie
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The Venture Capital Adviser Exemption Explained

May 31, 2018 by Alexander J. Davie

venture capitalSection 203(l) of the Investment Advisers Act of 1940 (the “Advisers Act”), also known as the venture capital adviser exemption, provides that an investment adviser that solely advises venture capital funds is exempt from registration with the SEC under the Advisers Act. The term “venture capital fund” is not defined in the text of the Advisers Act; instead, the term is defined in SEC Rule 203(l)-1(a) as a private fund that meets certain conditions. This article looks at each of these conditions and explains what is needed to meet them. [Read more…]

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Filed Under: Private Equity and Hedge Funds Tagged With: Exempt Reporting Adviser, PF Recent, Recent, Venture Capital Adviser Exemption, Venture Capital Fund

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.

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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

The Life Cycle of a Private Equity or Venture Capital Fund

June 29, 2017 by Alexander J. Davie

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Unlike most hedge funds, the investment holdings of private equity and venture capital funds typically are not liquid. Consequently, private equity and venture capital funds usually do not have any redemption rights and are organized to have a limited life cycle, often in the range of 7 to 15 years. During this life cycle, the fund manager will raise the capital for the fund, deploy that capital into investments, hold those investments, and then sell those investments and return the capital to the fund’s investors. This activity occurs over several distinct phases – the marketing period, the commitment period, and the post-commitment period. [Read more…]

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Filed Under: Private Equity and Hedge Funds Tagged With: Commitment Period, Investment Period, PF Recent, Private Equity Fund, Recent, Venture Capital Fund

About the editor

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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.
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  • Mergers & Acquisitions
  • Private Equity and Hedge Funds
  • Startups and Venture Capital
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