Venture capital firms have some disclosing to do.
On August 23, the SEC passed a handful of new fund disclosure rules concerning clawbacks, preferential treatment of LPs and fees.
Fund managers might not have paid much attention to this, though; the rules that the SEC passed were a watered-down version of the initial proposals, including the removal of a potential rule change that VCs seemed most worried about regarding fiduciary duty. But there are still a few things that VCs should pay attention to — especially emerging managers.
The changes to the rules, while not drastic, have the potential to make fundraising more difficult for VCs. Also, punishment for not following the rules correctly will fall on GPs themselves; they can’t turn to their LPs for financial help anymore.
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