IB Union Calendar No. 205 119th CONGRESS 1st Session H. R. 4431 [Report No. 119–248] IN THE HOUSE OF REPRESENTATIVES July 16, 2025 Mr. Timmons introduced the following bill; which was referred to the Committee on Financial Services September 8, 2025 Additional sponsor: Ms. Pettersen September 8, 2025 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed Strike out all after the enacting clause and insert the part printed in italic For text of introduced bill, see copy of bill as introduced on July 16, 2025 A BILL To amend the Investment Company Act of 1940 with respect to the definition of qualifying venture capital funds, and for other purposes.

1. Short title This Act may be cited as the Improving Capital Allocation for Newcomers Act of 2025 . 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 persons ; and (2) in subparagraph (C)(i), by striking $10,000,000 and inserting $50,000,000 . 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 Advocate, 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, specifically including, with respect to such businesses and startup entities, changes or trends relating to— (1) the geographic distribution of capital to portfolio companies; (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 development, 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 Capital Formation shall issue a report to the Congress containing 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 Commission. (c) Public comment During the 180-day period beginning 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 consultation with the Investor Advocate and the Advocate for Small Business Capital Formation, may, after considering 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 demonstrable effect on increasing the geographic distribution 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 subparagraph (A) of section 3(c)(1) of the Investment 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 Investment Company Act of 1940, but such dollar figure may not exceed $100,000,000 or be reduced below $10,000,000. (2) Deadline for rulemaking The rulemaking 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 subsection (c). (3) No effect on inflation adjustments A rule issued under this subsection shall have no effect 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.

September 8, 2025 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed