Improving Capital Allocation for Newcomers Act of 2025
Sponsored By: Representative Timmons
Passed House
Summary
Raises the official thresholds that define qualifying venture capital funds and sets up a study to judge their effects. The bill would increase who counts as a qualifying venture capital fund and require a five-year review that could trigger limited rule changes based on observed effects on where and who gets startup capital.
Show full summary
- Venture capital funds and managers: The bill would raise the investor cap from 250 to 500 people and raise the dollar test from $10 million to $50 million. It also fixes the compliance measurement date to the date of enactment.
- Startups and founders: The bill directs a study, to start five years after enactment, on how those threshold changes affect geographic capital flow, founders’ socio-economic diversity, veteran founders, industry sectors, size, and stage.
- Regulators and rulemaking: The SEC, working with the Investor Advocate and the Advocate for Small Business Capital Formation, would gather data, publish a report, solicit 180 days of public comment, and could adjust thresholds within set bounds (250–750 people; $10 million–$100 million) if the study shows demonstrable increases in geographic or diversity outcomes.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 1 benefits, 0 costs, 1 mixed.
Higher limits for venture capital funds
If enacted, more private funds could qualify as venture capital funds. The person limit would rise from 250 to 500. The dollar test would rise from $10 million to $50 million. The money test would be measured on the Act’s enactment date. The bill would keep the current inflation adjustment for that dollar amount. These changes would take effect at enactment.
Study and possible SEC threshold changes
If enacted, a study would start five years after enactment. The SEC’s small business and investor advocates would track where venture money goes and who founders are, including veterans. They must report to Congress and post the report online. Public comment on the report would run for 180 days. If the report shows clear gains and after considering comments, the SEC could change the tests. It could set the person limit between 250 and 750, and the dollar test between $10 million and $100 million. The SEC could only issue a proposed rule during the 180 days after the comment period ends.
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Sponsors & CoSponsors
Sponsor
Timmons
SC • R
Cosponsors
Rep. Pettersen, Brittany [D-CO-7]
CO • D
Sponsored 7/21/2025
Roll Call Votes
No roll call votes available for this bill.
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