Foreign Investment


It is critical to protect passive foreign investment into U.S. venture funds.

Passive foreign investment are not national security threat because the limited partners (LPs) that invest in U.S. venture funds do not gain access to sensitive information about the underlying companies in which the fund is invested.

It is imperative that the Committee on Foreign Investment in the U.S. ( CFIUS) does not unnecessarily harm foreign direct investment into U.S. startups. CFIUS should:

  • Follow congressional intent to establish a fair exemption process for certain foreign entities
  • Ensure that the process is predictable and operates on timelines that keep with business norms

Background: In 2018 the Foreign Investment Risk Review Modernization Act (FIRRMA) significantly expanded the authority of CFIUS to review non-controlling investments into startups for national security considerations.

That same year the Export Control Reform Act established controls on “emerging or foundational technologies,” which became subject to export controls, greatly expanding the number of transactions subject to CFIUS filings which could chill investment into innovative startups.

The bottom line: Policymakers will continue to see capital deployed overseas if foreign direct investment becomes too limited.

NVCA has led industry efforts to ensure CFIUS can achieve its national security mission and will remain deeply engaged with the Department of Treasury and other federal agencies represented on CFIUS to ensure the U.S. economy continues to prosper.

Meet The Policy Expert

Jonas Murphy
Director of Government Affairs