Good morning 👋
I hate to be that guy, but I’ve started using Twitter more to share the best things I’m learning.
If you like what I write here, checkout what I write here.
Okay - enough of that. Switching gears.
Today we’re breaking down some new language from the SEC that discusses how emerging managers are able to publicly market their funds.
Let’s get into it.
Today’s highlights
Some good news for emerging managers
Original thoughts from Shaan Puri
YC founders are raising less
How to be antifragile in the age of AI
TOP
Fundraising gets (a little bit) easier ☑️
506(b) vs. 506(c) distinction is not the sexiest topic in the world, but it’s something that all fund managers have to know about and pick a side.
The SEC recently made a change that affects the decision-making of fund managers when deciding which is right for them.
Here is Teel Lidow from Venture Fund(amentals) breaking down the change:
Before 2012, it was very difficult - effectively impossible - for any emerging manager to publicly announce that they were raising a fund in the US market. The SEC changed that in 2012 by adopting Rule 506(c), which allows managers to “generally solicit” investors. But there was a catch - in order to take advantage of Rule 506(c) a manager needs to “take reasonable steps to verify” every investor’s “accredited investor” status.
The SEC didn’t explain exactly what “reasonable steps” meant, but gave a few examples of diligence processes that would qualify - all of which were time consuming and invasive (like reviewing your investors’ tax returns). This made the option unattractive - with managers unwilling to put in the time and effort to complete the diligence and investors unwilling to provide their sensitive information - and Rule 506(c) has gone more or less unused.
But, in a no-action letter published on March 12, 2025, the SEC announced that it’s now okay to assume that an investor is accredited if they are investing at least $200K in an offering (or $1M, if the investor is an entity) and make a handful of representations when they invest.
This makes Rule 506(c) offerings much more attractive for emerging managers. For managers with a minimum check size of $200K, there’s now no downside to publicly marketing the fund (or at least relaxing restrictions around fundraising). For managers who are taking smaller checks (including many emerging managers), this new development still takes away one of the biggest problems with 506(c) offerings - they will no longer scare away larger investors who don’t want to deal with the diligence.
At least in the small world that we operate in, this is a big deal.
Up until this point, managers have had to walk on eggshells when talking about their fund. Any slip up on a podcast or social media post could cost them massive admin headaches and put them at risk of becoming a target of the SEC.
Fundraising is becoming more fluid, but the challenge is still around convincing new LPs that you have something that other GPs don’t. Easier said than done.
COMMUNITY
The OS for private investors 🕹
Good venture investors need to have:
Good background knowledge and an understanding of how venture dynamics work
A source of good deal flow so that you see founders first
An elite investor network that you can share notes, deals, and other information with
Mental frameworks to understand company building, scale, and what makes a good vs. great investment
Connections to other high-quality people that become future co-workers or portfolio company employees
That’s why we built this.
2,500 other investors from places like Bessemer, Insight, Accel, and Founders Fund already use it, and we think you should too.
TWEET
HEADLINES
VC Aileen Lee highlights how the broader investor exodus is worsening woes for unicorn companies (TechCrunch)
Y Combinator founders raising less money signals a ‘vibe shift’ (TechCrunch)
Klarna files to go public on NYSE (Pitchbook)
As SF Bay Area eats up 52% of all AI and ML VC dollars, foreign VCs warn of waste (Pitchbook)
MEMOS
Chima: Interoperability for AI agents
Superpower: The all-in-one health membership for elite performers
Documenso: The DocuSign killer
LINKS
📶 Market map: Condensing the finance department: The companies building more efficient finance departments by creating more leverage for CFOs
🦍 Leo Polovets (GP @ Humba Ventures) on what makes a great LP, attributing luck to seed investing, and using transparency to your advantage: What GPs look for from their LPs, making the case for venture investing vs. other asset classes, and some philosophy around reserves and follow-on investments
🪝 How to Craft an Elevator Pitch That Hooks Investors & Lands Funding: The VC Corner outlines how to choose the right pitch, right length, how to deliver, and 9 proven strategies that are difficult for investors to ignore
🔗 How to be Antifragile in the Age of AI: Develop the right mindset, the right skills and the right profession
🤷 The Waiting Game When Progress Isn’t in Your Hands: No one warns you about the waiting
🧐 The 2025 Fundraising Guide—Back by Research, Facts & Figures: Date-Driven VC helps founders navigate investor expectations, examine fundraising by stages, negotiate better terms, and raise the right amount at the right time
🧰 Presenting—The 2025 Tech Stack Report: Mostly Metrics offers a free report on what tools finance teams of all sizes are using to get the job done
MEME
BOARDROOM
Get a FREE audit of your business 🆓
Honest take: I’ve made hundreds thousands of mistakes building this business.
GTM mistakes that slow down sales
Marketing / paid advertising mistakes that literally light money on fire
Ignoring platforms or not learning how different algorithms work that results in not getting enough attention
Not delegating or using automation that cost me hundreds of hours of my time
And a thousand others
But after making tweaks for 5+ years, you start to learn what works and what doesn’t.
Lucky for me, 99% of this knowledge of what works is now stored in my head.
Unlucky for you, most of this can’t be shared online, and it has to be applied to specific situations.
That’s why I’m doing FREE business audits for any reader who owns a business and is looking to grow.
You talk, I listen, I come up with a game plan after the call, and you decide what you want to do with that information.
Fair enough?
Apply below to book some time with me.
Thanks for reading this far and giving us a little bit of your attention this week.
Feel free to unsubscribe whenever this stops becoming valuable to you.
- Clay
(Founder @ Confluence.VC | GP @ Outlaw)
This newsletter (on steroids) 💪
See why some readers are bumping up their reading experience ....
Upgrade today ☑️An upgrade gets you:
- Deal flow reports
- Ultimate VC Resource Library
- Private Airtable databases
- Behind-the-scenes updates
- Private consulting call
- Early access to new products
