HR 3383: Incentivizing New Ventures and Economic Strength Through Capital Formation Act of 2025

HR 3383 in plain English: This bill makes several changes to securities and investment regulations aimed at expanding access to capital markets. It allows closed-end funds to increase investments in private investment funds without SEC restrictions, raises various financial thresholds for investors and funds, and adjusts accredited investor income and asset limits.

Stated purpose

This bill aims to expand access to capital for small businesses, broaden investment opportunities for more types of investors, and strengthen public markets by adjusting rules around how funds, startups, and investors can participate in capital formation.

Key points

• Prohibits the SEC from limiting closed-end funds' ability to invest in private investment funds or list their securities
• Raises the crowdfunding investment threshold from $100,000 to $250,000, with SEC discretion to increase it up to $400,000
• Raises the threshold for investment adviser registration exemption from $150,000,000 to $175,000,000 in assets under management
• Raises an Investment Company Act investor count threshold from $10,000,000 to $50,000,000, with a ceiling of $100,000,000
• Adjusts accredited investor income thresholds: individual income above $200,000 or joint income above $300,000 in each of the two most recent years

Arguments supporters make

• Small businesses and startups, especially in rural areas, struggle to find investors under current rules, and loosening restrictions on fundraising events and fund structures would help them get the capital they need to grow and create jobs.
• Ordinary investors with real financial knowledge or expertise are currently blocked from many private investment opportunities that wealthy individuals can access, and this bill would make the investment landscape fairer and more open.
• Expanding the types of funds that can invest in private markets gives everyday investors more tools to build wealth through professionally managed vehicles, without requiring them to be millionaires.

Arguments opponents make

• Private investment funds carry higher risks and less transparency than public investments, and allowing more retail-accessible funds to pour money into them could expose ordinary investors to significant losses with little regulatory protection.
• Loosening solicitation and fundraising rules may make it easier for bad actors to reach unsophisticated investors at public events or through new fund structures before adequate safeguards are in place.
• Reducing SEC oversight over how closed-end funds invest and how securities are listed removes a key layer of investor protection that exists precisely because private markets are harder to monitor and evaluate than public ones.

Tradeoffs

Expanding access to private capital markets may help small businesses grow and give more investors new opportunities, but it also reduces regulatory guardrails designed to protect investors from the higher risks and lower transparency of private investments.

Current status in Congress: Passed House.

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