Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Lazaro Gamio / Axios

Venture capitalists want more flexibility in what sorts of investments they can make, according to a letter recently sent by the National Venture Capital Association to the U.S. Securities and Exchange Commission.

Why it matters: Qualifying as a "venture capital fund" comes with benefits like fewer reporting guidelines than other types of private investment funds, but the definitions were written when companies didn't stay private quite so long, and before the advent of digital tokens.

Venture capital funds are currently limited when it comes to making what the SEC views as "non-qualifying" investments, or deals that are outside the normal course of VC business, in order to protect investors.

  • Generally, such investments may only comprise 20% of a VC fund's committed capital.

Included in the 20% basket are secondary transactions, such as buying shares in a startup from other funds or the startup's employees. The remainder must be direct deals, or stock purchased directly from the company.

  • The NVCA is asking for more flexibility, arguing that current rules are antiquated — particularly as companies stay private longer, and desire liquidity solution for founders and early employees.
  • It also argues that qualifying all investments in "emerging growth companies" (i.e. companies with less than $1.07 billion in annual revenue) would increase the number of development-stage biotechs going public — as VCs often are asked to buy into such offerings for market validation, but can be handcuffed by the 20% limit.

That 20% basket also includes purchases of digital tokens.

  • The NVCA wants digital tokens included within the 80%, arguing that it shouldn't matter if a fund invests in a startup through preferred equity or a digital token.
  • It also asks that cryptocurrencies like Bitcoin and Ether be considered “cash equivalents," which VC funds may hold without limit.

Finally, the letter asks that investments in other VC funds also be treated as qualifying investments, and that there be no limits on the subscription credit facilities that some funds use as a bridge between capital calls.

Go deeper

29 mins ago - Politics & Policy

McConnell drops filibuster demand, paving way for power-sharing deal

Senate Majority Leader Chuck Schumer (R) and Minority Leader Mitch McConnell attend a joint session of Congress. Photo: Olivier Douliery/AFP via Getty Images

Senate Minority Leader Mitch McConnell has abandoned his demand that Democrats state, in writing, that they would not abandon the legislative filibuster.

Between the lines: McConnell was never going to agree to a 50-50 power sharing deal without putting up a fight over keeping the 60-vote threshold. But the minority leader ultimately caved after it became clear that delaying the organizing resolution was no longer feasible.

2 hours ago - Technology

Scoop: Google won't donate to members of Congress who voted against election results

Sen. Ted Cruz led the group of Republicans who opposed certifying the results. Photo: Stefani Reynolds/Pool/AFP via Getty Images

Google will not make contributions from its political action committee this cycle to any member of Congress who voted against certifying the results of the presidential election, following the deadly Capitol riot.

Why it matters: Several major businesses paused or pulled political donations following the events of Jan. 6, when pro-Trump rioters, riled up by former President Trump, stormed the Capitol on the day it was to certify the election results.

2 hours ago - Politics & Policy

Minority Mitch still setting Senate agenda

Illustration: Aïda Amer/Axios

Chuck Schumer may be majority leader, yet in many ways, Mitch McConnell is still running the Senate show — and his counterpart is about done with it.

Why it matters: McConnell rolled over Democrats unapologetically, and kept tight control over his fellow Republicans, while in the majority. But he's showing equal skill as minority leader, using political jiujitsu to convert a perceived weakness into strength.