Developing and Empowering our Aspiring Leaders Act of 2025

Bill Number

S. 3351

Origin Chamber

Senate

Congress

119th Congress, Session 1

Status

Introduced

Latest Action

2025-12-04: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Last Updated

2025-12-30T05:38:19Z

AI-Generated Summary

Purpose

This legislation directs the Securities and Exchange Commission (SEC) to update regulatory definitions related to the exemption from registration for venture capital fund advisers under the Investment Advisers Act of 1940. The goal is to expand the types of investments that qualify under these rules while adding limits on certain fund holdings.

Key Provisions

• The SEC must revise the definition of a "qualifying investment" within 180 days of enactment to include:
• Equity securities issued by a qualifying portfolio company, whether bought directly or through a secondary market purchase.
• Investments made in another venture capital fund.
• The SEC must also update rules so that a private fund qualifies as a venture capital fund only if, right after acquiring any asset, it holds no more than 49 percent of its total capital contributions and uncalled commitments (excluding short-term items) in:
• Other venture capital funds, or
• Qualifying investments bought via secondary acquisitions (valued at cost or fair value).

Significant Changes to Existing Law

• Current SEC rules under 17 CFR 275.203(l)-1 limit what counts as a qualifying investment for the registration exemption; this bill broadens that to explicitly cover secondary equity purchases and investments in other venture capital funds.
• It introduces a new 49 percent cap on holdings in other venture capital funds or secondary investments, which did not previously exist as a condition for fund qualification.

Potential Impacts

• Government agencies: Requires the SEC to amend its regulations within a set timeframe, affecting how it oversees venture capital advisers.
• Citizens and businesses: May allow more flexibility for venture capital funds and their advisers in structuring investments, potentially increasing access to capital for startups and portfolio companies through secondary markets or fund-of-funds approaches.
• No direct effects on international relations are specified in the bill.

Main Stakeholders Affected

• Venture capital fund advisers seeking the registration exemption.
• Venture capital funds and their investors.
• Qualifying portfolio companies that issue equity securities.
• The Securities and Exchange Commission, which must implement the regulatory changes.

Notable Legal, Constitutional, or Political Implications

• The bill operates within existing securities law by directing an agency to revise rules, without altering the underlying Investment Advisers Act of 1940 itself.
• It focuses on regulatory definitions rather than creating new enforcement mechanisms or penalties.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Rounds, Mike [R-SD]

Cosponsors (1)

Sen. Warnock, Raphael G. [D-GA]

Recent Actions

• 2025-12-04: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
• 2025-12-04:
• 2025-12-04: Introduced in Senate

Bill Versions

• Developing and Empowering our Aspiring Leaders Act of 2025 — issued 2025-12-04 — PDF (3 pages)