Agenda - Meeting of SEC Small Business Capital Formation Advisory Committee

Location:  Public will be able to view on www.sec.gov

Date:          Wednesday, November 13, 2024

Time:         9:00 a.m. – 12:30 p.m. (ET)

9:00     Call to Order; Introductory Remarks by Commissioners

9:20     Presentation on the Limits of Arm’s Length VC Fundraising, by Professor Sabrina Howell

Continuing the exploration of ways to expand access to early-stage capital raising while also weighing the need for investor protection in the private markets, the Committee will consider how certain fund managers, including underrepresented fund managers, are raising capital. To facilitate this discussion, Professor Sabrina Howell, professor of finance at the New York University Stern School of Business, will present her upcoming academic paper that examines venture capital fund manager use of relationship-based versus arm’s length public advertising approaches to raising funds. She will discuss the advantages and challenges of public advertising for traditionally underrepresented managers.

10:15   The 411 on Section 3(c)(1) of the Investment Company Act of 1940 (the “40 Act”)          

Companies that are required to register as investment companies under the 40 Act are subject to reporting and other regulatory requirements. Many private investment companies rely on one of the exceptions from the definition of investment company set forth in Section 3(c)(1) of the 40 Act to qualify for an exemption from registration. The SEC’s Robert Holowka, Branch Chief, and John Cavanagh, Senior Counsel, of the Private Funds Branch of the Investment Adviser Regulation Office, Division of Investment Management, will provide a brief overview of the registration framework applicable to private fund advisers and their funds, including those exemptions from the registration requirements of the Investment Advisers Act of 1940 and the 40 Act which may be relied upon by emerging fund managers. Committee members will have an opportunity to learn about the mechanics of such exemptions from registration.

10:45   Break

11:00   Exploring Ways to Support and Promote Emerging Fund Managers

Emerging fund managers play a key role in the U.S. capital markets by funding startups. However, emerging managers consistently report challenges raising investment funds, and women and racially and ethnically diverse fund managers report facing disproportionate challenges raising capital. To facilitate the discussion, members will begin by hearing from an experienced fund manager about how new fund managers can be supported and promoted through fellowship programs. As part of this discussion, the Committee will explore ways to address some of the challenges facing emerging fund managers and consider whether regulatory or other solutions could be undertaken to further support these fund managers and, in turn, the early-stage companies in which these managers invest.

Speaker:

• Karen Kerr, PhD, Board Member and Charter Class, Kauffman Fellows and Managing Director, Exposition Ventures

12:30   Wrap-up and Adjournment

12:45   Administrative Executive Session