Key Takeaways
- • The House passed the INVEST Act (H.R. 3383) on a bipartisan basis by a vote of 302-123, advancing a 22-bill package designed to expand capital formation in private markets and now moving to the Senate for consideration.
- • The DEAL Act, the package's most consequential provision, raises the secondary and fund-of-funds investment cap for VC funds from 20% to 49% of assets under management while maintaining exemption status, potentially deepening capital pools for emerging fund managers and reducing VC firm registration as investment advisors.
- • The ICAN Act doubles the beneficial owner limit for qualifying VC funds to 500 (from 250) and quintuples the capital limit to $50 million (from $10 million), expanding the pool of investors who can participate in venture funds.
- • Additional provisions include allowing individuals to verify accredited investor status through testing rather than wealth verification alone, and the HALO Act, which permits startups to present at university and accelerator-sponsored events without triggering general solicitation rules.
- • Senate sponsors Mike Rounds (R-N.D.) and Raphael Warnock (D-Ga.) have introduced the companion DEAL Act, with NVCA leadership signaling the Senate may vote on the full INVEST Act as a standalone bill.
Summary
The House advanced a significant bipartisan capital formation package on December 12, 2025, passing the INVEST Act (Incentivizing New Ventures and Economic Strength Through Capital Formation) by a vote of 302-123. The legislation, comprising 22 separate bills organized across three titles, represents the first legislative push to expand private markets access and could precede more contested efforts to permit 401(k) plans to invest in alternative assets.
The DEAL Act stands as the package's most material component for venture capital practitioners. It raises the threshold for secondary and fund-of-funds investments from 20% to 49% of a fund's assets under management, allowing VC funds to maintain their regulatory exemption while deploying a substantially larger portion of capital into these alternative investment vehicles. The adjustment preserves the original 51% minimum allocation requirement for traditional venture capital investments, reflecting a compromise negotiated between House Republicans and Democrats. Industry observers anticipate this expansion will broaden the capital available to emerging fund managers and reduce pressure on smaller VC firms to register as investment advisors.
The ICAN Act materially expands the universe of permissible investors in qualifying venture capital funds by doubling the beneficial owner cap from 250 to 500 and quintupling the capital threshold from $10 million to $50 million. The HALO Act revises Regulation D to permit portfolio companies to present at events sponsored by universities, accelerators, and similar entities without triggering general solicitation restrictions—a change designed to lower barriers to capital access for early-stage companies. A third provision allows individuals to demonstrate accredited investor status through standardized testing rather than relying exclusively on wealth thresholds, broadening investor eligibility.
Senate sponsors Mike Rounds (R-N.D.) and Raphael Warnock (D-Ga.) have introduced the Senate companion to the DEAL Act. Diem-Mi Lu, vice president of government affairs at the National Venture Capital Association, expressed confidence that the Senate could advance the full INVEST Act package as a standalone bill, signaling momentum for passage despite the typical legislative friction surrounding capital markets regulation.
The DEAL Act stands as the package's most material component for venture capital practitioners. It raises the threshold for secondary and fund-of-funds investments from 20% to 49% of a fund's assets under management, allowing VC funds to maintain their regulatory exemption while deploying a substantially larger portion of capital into these alternative investment vehicles. The adjustment preserves the original 51% minimum allocation requirement for traditional venture capital investments, reflecting a compromise negotiated between House Republicans and Democrats. Industry observers anticipate this expansion will broaden the capital available to emerging fund managers and reduce pressure on smaller VC firms to register as investment advisors.
The ICAN Act materially expands the universe of permissible investors in qualifying venture capital funds by doubling the beneficial owner cap from 250 to 500 and quintupling the capital threshold from $10 million to $50 million. The HALO Act revises Regulation D to permit portfolio companies to present at events sponsored by universities, accelerators, and similar entities without triggering general solicitation restrictions—a change designed to lower barriers to capital access for early-stage companies. A third provision allows individuals to demonstrate accredited investor status through standardized testing rather than relying exclusively on wealth thresholds, broadening investor eligibility.
Senate sponsors Mike Rounds (R-N.D.) and Raphael Warnock (D-Ga.) have introduced the Senate companion to the DEAL Act. Diem-Mi Lu, vice president of government affairs at the National Venture Capital Association, expressed confidence that the Senate could advance the full INVEST Act package as a standalone bill, signaling momentum for passage despite the typical legislative friction surrounding capital markets regulation.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.