4 versions

CosmeticWhat changed in REFERRED IN SENATEcompared with ENGROSSED IN HOUSE (Dec 1, 2025)

Technical corrections only. The changes between v3 and v4 reflect the bill's procedural movement from the House to the Senate, including updated legislative status information and the specific name of the House Clerk. No substantive policy changes were made to the bill's text.

H.R. 4429119th CongressIntroduced Jul 16, 2025

Developing and Empowering our Aspiring Leaders Act of 2025

Passed HouseFinance and Financial SectorSubstantive

View bill text

Sponsor: Rep. Wagner, Ann [R-MO-2]
Committees: Banking, Housing, and Urban Affairs Committee (primary)
Last action: Dec 2, 2025

Bottom line

This bill aims to provide greater flexibility for venture capital funds in their investment strategies while setting a clear limit on the proportion of certain aggregated investments.

What it actually does

This bill mandates the Securities and Exchange Commission (SEC) to revise the definition of a 'qualifying investment' for venture capital fund advisers under the Investment Advisers Act of 1940. It expands this definition to include equity securities acquired in secondary acquisitions and investments in other venture capital funds. Additionally, it imposes a new condition that a venture capital fund cannot hold more than 49 percent of its aggregate capital in other venture capital funds or qualifying investments acquired in secondary acquisitions.

Proponents argue

Supporters argue this bill will modernize SEC regulations to reflect current venture capital market practices, allowing funds greater flexibility to invest in promising companies through secondary markets and to participate in fund-of-funds structures. This increased flexibility is expected to facilitate capital formation for startups and growth companies, enhance liquidity in the venture ecosystem, and broaden investor access to venture capital opportunities.

Opponents contend

Critics might contend that expanding the definition of 'qualifying investment' could dilute the original intent of the venture capital fund exemption, which was primarily to encourage direct, early-stage investment in nascent businesses. Concerns could be raised about potentially reduced transparency, increased layering of fees in fund-of-funds structures, or a shift in focus away from primary capital deployment if funds increasingly rely on secondary acquisitions.

The bill text is exceptionally concise and clearly written, making it very accessible for a quick and thorough understanding of its provisions.

Section 2(1)

Expansion of Qualifying Investment Definition

prominently featuredmoderately complex

This provision requires the SEC to modify its regulations to broaden what counts as a 'qualifying investment' for venture capital funds. Specifically, it will include equity securities issued by a qualifying portfolio company, even if those securities are purchased from another investor (a secondary acquisition) rather than directly from the company. It also explicitly states that an investment made into another venture capital fund will be considered a qualifying investment under this revised definition.

GroupImpactMechanismScale

GroupVenture Capital Fund AdvisersImpactIncreased flexibility in investment strategies, potentially reducing regulatory burden for certain types of investments and allowing for broader portfolio construction.MechanismChanges to SEC Rule 275.203(l)-1(c) expanding the scope of 'qualifying investment'.ScaleBroad impact on VC funds seeking exemption from registration.

GroupStartups and Growth CompaniesImpactPotentially increased access to capital as venture capital funds have more avenues for investment, including secondary markets, which can provide liquidity to early investors.MechanismExpanded investment criteria for VC funds, leading to a wider range of potential capital sources.ScaleIndirect, but potentially significant for companies seeking funding or liquidity.

Supporters argue

Supporters argue that this expansion reflects modern venture capital practices, where secondary transactions and fund-of-funds structures are increasingly common and necessary for market efficiency. They contend it will provide essential flexibility, enhance liquidity in the venture ecosystem, and allow capital to flow more efficiently to innovative companies by recognizing diverse investment pathways.

Critics contend

Critics might argue that allowing secondary acquisitions and fund-of-funds investments to count as 'qualifying investments' could dilute the original intent of the venture capital fund exemption, which was primarily to support direct, early-stage company building. They may also raise concerns about potential layering of fees or reduced transparency in fund-of-funds structures.

Tradeoffs

This provision navigates the tension between providing regulatory flexibility to accommodate evolving venture capital investment strategies and maintaining the focus of the venture capital fund exemption on direct, primary investments in emerging companies.

Section 2(2)

Limit on Aggregate Investments in Other VC Funds and Secondary Acquisitions

prominently featuredmoderately complex

This provision introduces a new condition for a private fund to qualify as a venture capital fund under SEC regulations. It stipulates that immediately after acquiring any asset, the fund must not hold more than 49 percent of its total capital (which includes aggregate capital contributions and uncalled committed capital, excluding short-term holdings) in either other venture capital funds or qualifying investments acquired through secondary acquisitions. This effectively sets a cap on how much a venture capital fund can allocate to these specific types of investments.

About this analysis. AI-Generated from the official bill text and available committee reports. Gaps in available data are noted explicitly. Verify important details with the official Congress.gov record.

CosmeticWhat changed in REFERRED IN SENATEcompared with ENGROSSED IN HOUSE (Dec 1, 2025)

H.R. 4429119th CongressIntroduced Jul 16, 2025

Developing and Empowering our Aspiring Leaders Act of 2025

Passed HouseFinance and Financial SectorSubstantive

View bill text

Sponsor: Rep. Wagner, Ann [R-MO-2]
Committees: Banking, Housing, and Urban Affairs Committee (primary)
Last action: Dec 2, 2025

Bottom line

This bill aims to provide greater flexibility for venture capital funds in their investment strategies while setting a clear limit on the proportion of certain aggregated investments.

What it actually does

Proponents argue

Opponents contend

The bill text is exceptionally concise and clearly written, making it very accessible for a quick and thorough understanding of its provisions.

Section 2(1)

Expansion of Qualifying Investment Definition

prominently featuredmoderately complex

GroupImpactMechanismScale

Supporters argue

Critics contend

Tradeoffs

Section 2(2)

Limit on Aggregate Investments in Other VC Funds and Secondary Acquisitions

prominently featuredmoderately complex