Venture Capital Funds

Summary

This practice note provides an overview of U.S. venture capital fund formation, operation, and regulation, typical investor issues, and recent trends for venture capital funds. A venture capital fund is a type of private investment fund that typically invests in early stage companies (including seed-stage companies). The structure and terms of most U.S. venture capital funds are driven by a number of factors, including the need to accommodate the tax considerations of various investors, to secure an exemption from registration as a "registered investment company" under applicable Securities and Exchange Commission (the "SEC") rules and regulations, to conduct the fund's offering of securities pursuant to private offering exemptions provided under applicable SEC rules, and to ensure that the fund sponsor complies with its obligations under the SEC rules and regulations pertaining to investment advisers, including available exemptions from SEC registration as a registered investment ...