The secondary market for limited partner interests in venture capital funds has witnessed robust growth in recent years as an increasing number of existing venture fund investors seek an early exit from their positions for one reason or another (e.g., liquidity needs, portfolio rebalancing, end of their own term, etc.). That demand for an early exit has been met by an equally robust growth in secondary capital looking to acquire existing interests at a discount. For the most part, the secondary market has operated pretty efficiently as many venture funds
Continue Reading Withholding Requirements for Transfers of Venture Capital Fund Interests by Non-US Limited PartnersLuke Postma
Luke Postma practices corporate law, with a focus on emerging growth companies and venture capital firms. In addition, Luke represents venture capital funds in connection with their fund formation and ongoing operational matters.
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Venture Capital Funds: 3(c)(1) Funds vs. 3(c)(7) Funds
By Mel Wheaton, Lindsey Haythorn, Chris Thorson & Luke Postma on
Posted in VC Funds and Tax
Provided that they meet certain criteria, venture capital funds are not required to be registered as an “investment company” by the U.S. Securities and Exchange Commission (the “SEC”) under the Investment Company Act of 1940 (the “Investment Company Act”). The Investment Company Act defines “investment company” to include any issuer which is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities. Venture capital funds would typically fall under this definition; however, most venture capital funds are…
Continue Reading Venture Capital Funds: 3(c)(1) Funds vs. 3(c)(7) Funds