June 5, 2024

Contact: Savanna Maloney

WASHINGTON, DC – The National Venture Capital Association (NVCA) today welcomed the decision by the United States Court of Appeals for the Fifth Circuit vacating the Private Fund Adviser rule issued by the United States Securities and Exchange Commission (SEC).

“Today the court confirmed the SEC’s limited statutory authority over private funds, forcing the Commission to step back from its effort to adopt rules that delve deeply into how venture capital and other private funds work with sophisticated investors,” said NVCA President and CEO Bobby Franklin. “While the SEC has a role to play in governing capital markets, these poorly considered rules risked interfering with the venture capital markets and start-ups that fuel America’s exceptional dynamism and innovation. That’s a gamble we simply shouldn’t take.”

“The court correctly drew a clear line around the SEC’s authority and we expect the Commission to respect these new restrictions when developing future rules as well,” added Franklin.

Venture capital makes significant contributions to the U.S. economy, with more than $170 billion invested in 13,000+ companies across the country in 2023, and venture-backed companies creating jobs at eight times the rate of other businesses. The Private Fund Adviser rule, however, threatened to stifle innovation, hinder investment, and curtail the growth of the entrepreneurial ecosystem. The National Venture Capital Association (NVCA) in September joined with the Alternative Investment Management Association Ltd. (AIMA), American Investment Council (AIC), Managed Funds Association (MFA), the Loan Syndications and Trading Association (LSTA) and the National Association of Private Fund Managers (NAPFM) in filing a petition for review in the U.S. Court of Appeals Fifth Circuit to challenge the rule.

The original petition for review can be found here.


The National Venture Capital Association (NVCA) empowers the next generation of American companies that will fuel the economy of tomorrow. As the voice of the U.S. venture capital and startup community, NVCA advocates for public policy that supports the American entrepreneurial ecosystem. Serving the venture community as the preeminent trade association, NVCA arms the venture community for success, serving as the leading resource for venture capital data, practical education, peer-led initiatives, and networking. For more information about NVCA, please visit