Incentivizing New Ventures and Economic Strength Through Capital Formation Act of 2025

The bill was renamed from the 'Increasing Investor Opportunities Act' to the 'Incentivizing New Ventures and Economic Strength Through Capital Formation Act of 2025' (INVEST Act) and expanded from a single section on closed-end funds to three titles with over 30 sections covering small business capital, investor access, and public markets.

Section 303 expands 'testing the waters' pre-offering communications from only emerging growth companies to all issuers, and expands confidential review of draft registration statements from EGCs to all issuers making IPOs, exchange listings, or follow-on offerings.

Section 301 extends confidential submission of draft registration statements to all issuers (not just EGCs) for exchange listings, requiring public filing no later than 10 days before listing, and extends the financial reporting lookback period for EGCs.

Section 102 creates a new exception to the general solicitation prohibition in Regulation D, allowing issuers to present at events sponsored by government entities, colleges, nonprofits, angel investor groups, incubators, accelerators, and venture forums without it being treated as an illegal general solicitation.

Section 201 expands the accredited investor definition to include: individuals with net worth over $1 million (excluding primary residence), individuals with income over $200,000 (or $300,000 joint), licensed and registered brokers/investment advisers in good standing, and persons with demonstrable professional knowledge verified by a self-regulatory organization.

Section 203 creates a new pathway to accredited investor status through a certification examination established by the SEC, designed so that financially sophisticated individuals would be unlikely to fail, covering topics like securities types, disclosure requirements, corporate governance, and risks of private investments.

Section 103 raises the crowdfunding offering limit from $100,000 to $250,000, with SEC discretion to increase it up to $400,000 upon recommendation of the Small Business Capital Formation Advocate and Investor Advocate.

Section 108 increases the maximum number of investors in a qualifying venture capital fund from 250 to 500 persons and raises the dollar threshold from $10 million to $50 million, with a 5-year study requirement and potential rulemaking authority to adjust these figures.

Section 104 raises the small business investment company (SBIC) asset threshold from $150 million to $175 million and requires 5-year inflation adjustments.

Section 205 mandates that covered entities (brokers, dealers, investment advisers, investment companies, etc.) be permitted to deliver regulatory documents electronically, with a 180-day transition period, annual paper opt-out reminders for 2 years, and a permanent opt-out right.

Section 105 requires the SEC to establish an Office of Small Business within each of the Division of Corporation Finance, Division of Investment Management, and Division of Trading and Markets, without authorizing additional full-time equivalent employees.

Section 204 establishes a Senior Investor Taskforce within the SEC (defined as investors over age 65) with a 10-year sunset, and requires a GAO study on financial exploitation of senior citizens including economic costs, frequency, contributing factors, and policy gaps.

Section 109 expands what counts as a 'qualifying investment' for venture capital funds to include secondary acquisitions of equity securities and investments in other VC funds, while capping such non-portfolio-company investments at 49 percent of fund assets.