WASHINGTON, DC – The National Venture Capital Association (NVCA) today filed its formal comments regarding the proposed final rules to implement the Foreign Investment Risk Review Modernization Act (FIRRMA), which significantly expanded the authority of the Committee on Foreign Investment in the United States (CFIUS). CFIUS’s authorities granted by FIRRMA have impacted U.S. startups raising capital and will continue to do so. NVCA’s comments address 11 issues in the proposed rules impacting the venture and startup ecosystem and make recommendations on how these issues can be addressed in the final rules so that disruption to the U.S. venture capital and startup ecosystem is minimized.

“Establishing clear rules of the road, removing points of confusion, and creating a more focused version of the proposed rules is in all parties’ interest. If too many nuisance cases are filed, CFIUS stands less chance of seeing those that are of the most importance,” NVCA said in its formal comments. “By contrast, focusing on the areas of greatest interest – on more specific lists of technologies, of purchasers, of nations of interest – will allow CFIUS to better protect national security. At the same time, cleaner, clearer, narrower final rules will reduce the economic headwinds that over-regulation can create. NVCA looks forward to continuing to engage with CFIUS in order to explain potential impacts on American innovation and mitigate any adverse economic and national security effects that may arise as a result of the final rules.”

NVCA makes recommendations in its comments on 11 issues in the proposed final CFIUS rules to minimize harm to the U.S. innovation ecosystem. NVCA recommends that CFIUS should:

  • Clarify the “Principal Place of Business” Test for Funds to Exclude Nuisance Cases
  • Provide Additional Examples for the Definition of “Foreign Person” to Exclude Nuisance Cases
  • Improve the Exceptions Process for Covered Investments
  • Implement the Waiver Provision for Mandatory Filings for Investors from Selected Foreign Countries
  • Reconsider the Pilot Program “Critical Technology” Filing Requirement, and, at a Minimum, Rescope that Requirement
  • Clarify that Foreign Limited Partner Direct Investments do not Result in CFIUS Jurisdiction over Investments by Funds in Which Those Limited Partners Passively Participate
  • Expand Upon the Definition of “Material Nonpublic Technical Information”
  • Clarify What Types of Changes in Control Trigger its Jurisdiction Over a New Covered Investment (and Therefore, in Some Cases, a Mandatory Filing)
  • Consider a Broader Definition of Passivity to Provide Investors with Certainty
  • Consider Narrowing the Scope of “Sensitive Personal Data”
  • Maintain its Traditional Jurisdiction with Respect to U.S. Businesses

Download NVCA’s CFIUS Comments.


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 the NVCA, please visit www.nvca.org.