Santa Clara, CA asked in Business Law and Securities Law for California

Q: what differences are there between NY and CA laws governing VCs ?

specifically in terms of what they can or cannot do with startup capital.

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1 Lawyer Answer
Jonathan R. Roth
Jonathan R. Roth

A: More information is needed to answer your question. Most VC firms manage funds they create using investors money. In creating those funds they have to comply with SEC rules as well as state rules to the extent they apply. As to the use of the funds that is dictated by the terms of the fund and the agreement governing the investments and the payment of expenses. There are rules governing the fees one can take from investment funds.

If your company is a VC fund, then the limitations will be guided by your own agreements with investors and your own operating criteria.

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