Those who often quote the Beatles are doomed to repeat these actions..Number 9, Number 9
With that said, our #9 cool thing of the year was actually piece of the reform bill that was carved out to exempt most venture capital from the proposed regulatory practices reserved for most hedge funds and private equity. I know, boring stuff….but very meaningful for entrepreneurs. To summarize: the Securities and Exchange Commission proposed a new rule, based on requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Financial Reform Act, defining “venture capital funds” for purposes of exempting advisers to these funds from registering under the Investment Advisers Act of 1940.
This provision was a significant victory for the industry as the original bill aimed to move venture into the larger pool of fund managers that would be required to register. This would have caused undue burden on many managers, especially smaller ones like ourselves to meet regulatory demands. TO compare Venture Capital, with our long term holding periods and active board work to hedge funds is absurd. The cost would have been prohibitive and many funds would have closed shop therefore reducing an already shrinking pool of capital available to our nations last great hope..Innovation and ingenuity.
Lets be fair, VC’s will still have more stringent reporting requirements, but mostly on the fund ownership side, nothing that cant be handled.
Thank you NVCA for the hard work you did on this issue with the support of many in and out of our industry. We have to credit the SEC as well for putting real effort into examining the real differences and making an effective decision.