It sometimes surprises people that venture capital funds and private equity funds are not investment companies, at least not as far as the Investment Company Act is concerned and provided that such funds have been formed in a manner that satisfies the definitional exclusions of Section 3(c) of the Investment Company Act. This is a good thing because investment companies must register with the SEC, which involves up-front and ongoing expenses, public disclosures, and increased regulatory compliance obligations, such as requirements for independent directors, prohibitions of affiliated transactions, and a labyrinth of other conflicts of interests rules. Generally, any issuer that is or holds itself out as.
