investment adviser rules

The SEC has updated the net worth threshold for “qualified clients” from $2.0 million to $2.1 million, effective August 15, 2016.

Section 205 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”) generally prohibits a registered investment adviser from entering into an advisory contract that provides for compensation to the adviser on the basis of a share of capital gains upon or capital appreciation of funds of an advisory client.  This prohibition on “performance-based fees” prohibits compensation arrangements commonly used in fund vehicles, such as “carry”
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Megan Muir

DLA Piper LLP (US) recently distributed an electronic newsletter “Emerging Growth and Venture Capital News” containing articles regarding certain avoidable expensive employment-related mistakes by startups, updated federal rules governing investment advisers, cloud computing, and valuations in the context of venture capital financings.  The newsletter also has a list of some representative emerging company and VC transactions recently completed by DLA Piper attorneys.  If you would like to be added to DLA Piper’s e-mail distribution lists for news related to venture capital funds
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