Definition
3(c)(1) Fund
A private vehicle relying on the exclusion that caps it at 100 beneficial owners.
A 3(c)(1) fund relies on section 3(c)(1) of the Investment Company Act, which excludes from regulation a vehicle whose outstanding securities are beneficially owned by no more than 100 persons and which is not making a public offering. A separate provision allows qualifying venture capital funds, subject to a size limit, to admit up to 250 beneficial owners. That is the source of the confusion over whether the SPV limit is 100 or 250: both numbers are real, for different vehicles. Counting is the subtle part: an entity investing in the vehicle may be looked through and its own owners counted, particularly where that entity was formed to invest in this deal. Most SPVs stay well inside the cap, but syndicate leads running large member communities can approach it, at which point the options are a second vehicle or a 3(c)(7) structure limited to qualified purchasers.