Improving Capital Allocation for Newcomers Act of 2025
What changed between versions
The investor threshold for qualifying venture capital funds was reduced from 2,000 persons (introduced version) to 500 persons (engrossed version), a much more modest expansion from the current 250-person limit.
The dollar threshold for qualifying venture capital funds was reduced from $150 million (introduced version) to $50 million (engrossed version).
Inflation adjustments to the dollar threshold now begin from a measurement made on the date of enactment, rather than from a date selected by the SEC, removing agency discretion over the starting point.
A new section requires the Advocate for Small Business Capital Formation to conduct a study beginning 5 years after enactment examining geographic distribution of capital, socio-economic characteristics of founders, veteran status, and industry details of portfolio companies.
The SEC is granted conditional rulemaking authority to adjust the investor threshold (between 250 and 750 persons) and dollar threshold (between $10 million and $100 million), but only if the study demonstrates a positive effect on geographic distribution, founder diversity, or veteran participation.
A 180-day public comment period follows the study report, and any proposed rule must be issued within 180 days after that comment period ends.
