Why can VC funds not have more than 99 LPs?

Asked by:
Community Member
Dec 22, 2023
1 answer
Accepted Answer
May 06, 2024
Venture Capital Funds can quality for certain exemptions from registering with the SEC as an "Investment Company". Section 3(c)(1) of the Investment Company Act of 1940 provides exemptions for:

  • private funds with 100 or fewer investors;
  • venture capital funds with fewer than 250 investors (under $10M and meeting other requirements);

Counting the proper number of investors can be a complex and nuanced process due to ultimate beneficial ownership and look-through for entities (and other factors), etc. - therefore we strongly recommend consulting an experienced fund attorney for assistance WELL BEFORE a fund may run up against either of these limits. 

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