Can I use Regulation A+ to raise capital for a VC Fund?
Venture Capital Funds that use 60% or more in simple debt for certain specialized loan types and 40% or less in equity holdings, can raise capital through Reg A+. The relevant SEC regulations are Sections 3(c)(5)(A) and (B) of the Investment Company Act.
The key requirement to qualify under Section 3(c)(5)(A) or (B) is that the loans or receivables held by the issuer must have been incurred by the obligor to finance the acquisition of specific goods or services and not for general purposes. If an issuer relies on Section 3(c)(5)(A), the loans and receivables held by the issuer must represent all or part of the sales price of merchandise, insurance or services. If an issuer relies on Section 3(c)(5)(B), the credit extended to the obligor must have been used to pay for specific goods or services. The fact that an obligation is secured by eligible property such as machinery and equipment is not by itself sufficient to permit reliance on Section 3(c)(5)(A) or (B).
This is a specialized type of fund, contact us for more details.