Then came the House bill, which exempted all VC funds and any PE fund with under $150 million in capital under management.
Yesterday, Chris Dodd introduced a Senate version that keeps the VC exemption, but also adds a PE exemption (leaving hedge funds in the registration mix). You can find it on page 301 of this massive document.
The big catch in all of this, however, is that both the House and Senate bills leave the definitions of “venture capital” and “private equity” up to the SEC. The SEC also would be allowed to set certain reporting requirements for PE firms, although no clarity on what that may entail.
Kind of a cowardly move, really. Congress originally said the umbrella language was because it was too difficult to legislatively define VC and PE firms, and that firms would simply use semantic skirts to avoid qualifying. That reality hasn’t changed, but is now the SEC’s problem while elected officials get to tell big donors about how they fought the good fight.