Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Improving Capital Allo-
cation for Newcomers Act of 2025’’. 
SEC. 2. QUALIFYING VENTURE CAPITAL FUNDS. 
Section 3(c)(1) of the Investment Company Act of 1940 
(15 U.S.C. 80a–3(c)(1)) is amended— 
(1) in the matter preceding subparagraph (A), 
by striking ‘‘250 persons’’ and inserting ‘‘500 per-
sons’’; and 
(2) 
in 
subparagraph 
(C)(i), 
by 
striking 
‘‘$10,000,000’’ and inserting ‘‘$50,000,000’’. 
SEC. 3. STUDY AND RULEMAKING. 
(a) IN GENERAL.—Beginning 5 years after the date 
of enactment of this Act, the Advocate for Small Business 
Capital Formation, in consultation with the Investor Advo-
cate, shall conduct a study on the effect of the amendments 
made by section 2 on the businesses and startup entities 
in which qualifying venture capital funds invest, specifi-
cally including, with respect to such businesses and startup 
entities, changes or trends relating to— 
(1) the geographic distribution of capital to port-
folio companies; 
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(2) the socio-economic characteristics of founders 
or controlling persons; 
(3) the veteran status of founders or controlling 
persons; 
(4) the industry sector, size, stage of develop-
ment, and related details; and 
(5) other factors or metrics determined by the 
Advocate for Small Business Capital Formation. 
(b) REPORT.—The Advocate for Small Business Cap-
ital Formation shall issue a report to the Congress con-
taining all findings and determinations made in carrying 
out the study required in subsection (a), and make such 
report available to the public on the website of the Commis-
sion. 
(c) PUBLIC COMMENT.—During the 180-day period be-
ginning on the date the report is issued under subsection 
(b), the Commission shall solicit feedback from the public 
on the findings and determinations contained in the report. 
(d) RULEMAKING.— 
(1) IN GENERAL.—The Commission, in consulta-
tion with the Investor Advocate and the Advocate for 
Small Business Capital Formation, may, after con-
sidering all comments received under subsection (c) 
and only if the Commission determines in such report 
that the amendments made by section 2 have had a 
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demonstrable effect on increasing the geographic dis-
tribution of capital to portfolio companies, increasing 
the variety of the socio-economic characteristics of 
founders or controlling persons, or increasing the 
number of founders or controlling persons who are 
veterans, issue rules to— 
(A) increase or decrease the 500 person 
threshold described in the matter preceding sub-
paragraph (A) of section 3(c)(1) of the Invest-
ment Company Act of 1940, but such threshold 
may not exceed 750 persons or be reduced below 
250 persons; and 
(B) increase or decrease the $50,000,000 
dollar figure in section 3(c)(1)(C)(i) of the In-
vestment Company Act of 1940, but such dollar 
figure may not exceed $100,000,000 or be re-
duced below $10,000,000. 
(2) DEADLINE
FOR
RULEMAKING.—The rule-
making authority in paragraph (1) only applies to a 
rule with respect to which the proposed rule was 
issued during the 180-day period beginning at the 
end of the public comment period described in sub-
section (c). 
(3) NO EFFECT ON INFLATION ADJUSTMENTS.— 
A rule issued under this subsection shall have no effect 
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on the requirement under clause (i) of section 
3(c)(1)(C) of the Investment Company Act of 1940 
(15 U.S.C. 80a–3(c)(1)(C)) to index the first dollar 
amount in such clause for inflation. 
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Union Calendar No. 205 
119TH CONGRESS 
1ST SESSION 
H. R. 4431 
[Report No. 119–248] 
A BILL 
To amend the Investment Company Act of 1940 
with respect to the definition of qualifying ven-
ture capital funds, and for other purposes. 
SEPTEMBER 8, 2025 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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