Fix Crowdfunding Act and Venture Capital Bill Pass House

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The Fix Crowdfunding Act (H.R. 4855) passed the House of Representatives by a vote of 394 to 4. It doesn’t look much like the original bill we reported on here. As passed by the House, the bill allows special purpose vehicles, called “crowdfunding vehicles” to engage in crowdfunding, and to make investments in a crowdfunding issuer, subject to significant limitations. It also makes the Exchange Act registration exemption for crowdfunded issuers unconditional if the issuer has a public float of less than $75 million.

The Supporting America’s Innovators Act of 2016 (H.R. 4854) creates an exemption from the Investment Company Act for funds with up to 250 investors, so long as they are a venture capital fund, as defined in Section 203(l) of the Investment Advisers Act, and have no more than $10 million in invested capital. The bill passed the house with a vote of 388 to 9.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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