[Congressional Record Volume 171, Number 200 (Monday, December 1, 2025)]
[House]
[Pages H4948-H4950]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEVELOPING AND EMPOWERING OUR ASPIRING LEADERS ACT OF 2025
Mr. DAVIDSON. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4429) to require the Securities and Exchange Commission to
revise the definition of a qualifying investment, for purposes of the
exemption from registration for venture capital fund advisers under the
Investment Advisers Act of 1940, to include an equity security issued
by a qualifying portfolio company and to include an investment in
another venture capital fund, and for other purposes, as amended.
[[Page H4949]]
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4429
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Developing and Empowering
our Aspiring Leaders Act of 2025''.
SEC. 2. DEFINITIONS.
Not later than the end of the 180-day period beginning on
the date of the enactment of this Act, the Securities and
Exchange Commission shall--
(1) revise the definition of a qualifying investment under
paragraph (c) of section 275.203(l)-1 of title 17, Code of
Federal Regulations--
(A) to include an equity security issued by a qualifying
portfolio company, whether acquired directly from the company
or in a secondary acquisition; and
(B) to specify that an investment in another venture
capital fund (as defined in paragraph (a) section 275.203(l)-
1 of title 17, Code of Federal Regulations) is a qualifying
investment under such definition; and
(2) revise paragraph (a) of such section to require, as a
condition of a private fund qualifying as a venture capital
fund under such paragraph, that, immediately after the
acquisition of any asset, such fund holds no more than 49
percent of the amount of the fund's aggregate capital
contributions and uncalled committed capital (excluding
short-term holdings) in--
(A) one or more venture capital funds; or
(B) qualifying investments acquired in a secondary
acquisition, valued at cost or fair value, consistently
applied by the fund.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Ohio (Mr. Davidson) and the gentlewoman from California (Ms. Waters)
each will control 20 minutes.
The Chair recognizes the gentleman from Ohio.
General Leave
Mr. DAVIDSON. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days to revise and extend their remarks and
include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. DAVIDSON. Mr. Speaker, I yield 5 minutes to gentlewoman from
Missouri (Mrs. Wagner).
Mrs. WAGNER. Mr. Speaker, I thank my friend from Ohio for yielding.
Mr. Speaker, I am proud to sponsor H.R. 4429, the Developing and
Empowering our Aspiring Leaders, or DEAL, Act.
This bill, which passed with almost unanimous support out of the
Financial Services Committee, seeks to ensure the United States remains
the most entrepreneurial country in the world, where the next great
companies are founded and funded.
It is often said that small businesses are the engine of the American
economy, and that is an absolute truth. Small businesses make up 99
percent of U.S. employers, and they are the driving force behind the
creation of a majority of new jobs.
The entrepreneurs leading these companies are building something new,
taking real risks, and driving growth in communities across the Nation,
but too often, they can't get a fair shot at investment.
Right now, our capital markets suffer from an extreme geographic
imbalance. The data is stark. Nearly 70 percent of venture capital
flows to three States, Mr. Speaker: California, New York, and
Massachusetts.
This leaves entire regions of the country struggling to access
funding. It leaves communities in the Midwest and the South without the
capital they need to build and scale businesses. Access to capital is
not just a coastal issue. It is a national economic necessity.
This capital divide is why the DEAL Act is so critically important.
This bill is a targeted, forward-looking effort to modernize outdated
rules and channel investment to where it is needed most.
The DEAL Act fundamentally strengthens the ability of capital to
reach more founders and more communities. It achieves this by allowing
larger venture funds to invest directly in smaller, regional funds, a
fund-of-funds investment.
This mechanism is a game changer, Mr. Speaker. It means more funding
for startups, more opportunities for businesses that might otherwise be
overlooked, and more innovation happening everywhere, not just in a
handful of elite ZIP Codes.
Newer, regional venture funds are often best positioned to back the
entrepreneurs who are building businesses on Main Street. The DEAL Act
ensures that these funds can expand that important work, giving them
the flexibility to partner with larger institutions to reach a wider
base of early-stage companies.
H.R. 4429 ensures our policies are helping capital move efficiently
and effectively, empowering those taking risks to build something new,
and helping good ideas grow into great companies.
I thank Chairman Hill for his support, and also I thank Congressman
Casten for joining me and co-leading this commonsense and bipartisan
piece of legislation.
Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from
Illinois (Mr. Casten), who is also the vice ranking member of the
Committee on Financial Services.
Mr. CASTEN. Mr. Speaker, I also rise in support of H.R. 4429, the
Developing and Empowering our Aspiring Leaders Act, or DEAL Act, which
is a critical bill to support innovation, entrepreneurship, and capital
formation.
The venture capital industry provides vital funding for early-stage
startups at points in their life cycle when they are generally deemed
to be too risky for traditional bank financing or for raising money on
the public market. This basically means that if we are going to have a
growing and innovative economy, then we have to have a healthy venture
capital sector.
Historically, venture capital earns investor returns and frees up
more capital to recycle in other companies by selling their mature
portfolio companies to strategic investors or taking them public on
public markets.
For a variety of reasons, including public company reporting
obligations, economic uncertainty, and the rise of private equity, U.S.
companies today are staying private much longer, which has reduced the
opportunities for venture capital firms to recycle their investment
dollars.
Some venture capital firms have sought to create new liquidity
options through secondary acquisitions and investments in other VC
funds. This is what Congresswoman Wagner was referring to, but that
option right now is constrained by provisions in the Dodd-Frank Act of
2010 that limit venture capital funds' ability to invest in these so-
called fund of funds to only 20 percent of their commitments.
That rule was very well-intentioned when passed, and the intent was
to ensure that VC firms remained focused on direct investments in
early-stage startups. However, it was crafted for a very different
financial market than we have today.
I would also note that that constraint is irrelevant to the larger,
more well-known VC funds who have the resources to shoulder the
compliance burdens associated with registering with the SEC as
registered investment advisers. They can already do this, but they are
the big ones. They are the ones based in San Francisco and New York.
That option isn't available for these emerging regional fund managers
located in the middle of the country. Many of those funds increasingly
depend on that fund-of-funds model.
What the DEAL Act does is just provides greater flexibility to those
smaller VC funds while still ensuring that investors are protected and
that fund managers continue to prioritize direct funding in small
businesses. It does this by revising the existing rules to raise the
cap from 20 percent in fund of funds up to 49 percent but still
requiring that the majority of their investments are directly in
portfolio companies.
In other words, the DEAL Act supports growth in the startup economy
and ensures that capital reaches the communities and innovators who
need it most.
I thank my fellow Midwesterner and friend, Congresswoman Wagner, for
her leadership on this. I am proud to lead this important legislation,
and I urge all my colleagues to support it.
{time} 1820
Ms. WATERS. Mr. Speaker, I yield myself the balance of my time.
Our economy is struggling. People cannot afford groceries and gas.
Every day, it seems more and more people are getting laid off. The
American Dream is increasingly out of reach.
[[Page H4950]]
A core engine of our economy has always been the entrepreneurs who
take the risk of starting their own company. By implementing key
changes to the legal definition of a venture capital fund, H.R. 4429
will make it easier for capital to flow into American small businesses.
Mr. Speaker, I urge my colleagues to support this bill, and I yield
back the balance of my time.
Mr. DAVIDSON. Mr. Speaker, I include in the Record the CBO estimate
for this bill.
Legislation Considered Under Suspension of the Rules
The Majority Leader of the House of Representatives
announces bills that will be considered under suspension of
the rules in that chamber. Under suspension, floor debate is
limited, all floor amendments are prohibited, points of order
against the bill are waived, and final passage requires a
two-thirds majority vote.
At the request of the Majority Leader and the House
Committee on the Budget, CBO estimates the effects of those
bills on direct spending and revenues. CBO has limited time
to review the legislation before consideration. Although it
is possible in most cases to determine whether the
legislation would affect direct spending or revenues, time
may be insufficient to estimate the magnitude of those
effects. If CBO has prepared estimates for similar or
identical legislation, a more detailed assessment of
budgetary effects, including effects on spending subject to
appropriation, may be included.
EFFECTS ON DIRECT SPENDING AND REVENUES OF LEGISLATION CONSIDERED UNDER SUSPENSION OF THE RULES IN THE HOUSE OF
REPRESENTATIVES WEEK OF DECEMBER 1, 2025
----------------------------------------------------------------------------------------------------------------
Additional information
Bill number Title Effect on direct Effect on on direct spending and
spending revenues revenue effects
----------------------------------------------------------------------------------------------------------------
H.R. 176....................... No Immigration Reduce by Less None............. ......................
Benefits for Than $500K.
Hamas Terrorists
Act of 2025, as
amended.
H.R. 225....................... HUD Transparency None............. None............. ......................
Act, as amended.
H.R. 1262...................... Mikaela Naylon Increase by at Increase by at Section 3 would
Give Kids a Least $500K. Least $500K. increase revenues by
Chance Act, as an insignificant
amended. amount. Section 10
would reduce direct
spending and increase
revenues for a net
$1.219 billion
reduction in the
deficit. Section 11
would appropriate
$1.219 billion to the
Medicare Improvement
Fund. On net, the
bill would reduce the
deficit by an
insignificant amount
over the 2026-2035
period.
H.R. 2066...................... Investing in All None............. None............. ......................
of America Act
of 2025, as
amended.
H.R. 2159...................... Count the Crimes Increase by Less None............. Includes insignificant
to Cut Act, as Than $500K. costs for Postal
amended. Service Fund, which
are classified as off-
budget direct
spending.
H.R. 3174...................... Made in America None............. None............. ......................
Manufacturing
Finance Act, as
amended.
H.R. 3716...................... Systemic Risk Increase by Less Reduce by Less ......................
Authority Than $500K. Than $500K.
Transparency Act.
H.R. 4313...................... Hospital Change by Less None............. ......................
Inpatient Than $500K,
Services Direction
Modernization Unknown.
Act, as amended.
H.R. 4323...................... Trafficking None............. None............. ......................
Survivors Relief
Act, as amended.
H.R. 4423...................... No New Burma None............. None............. ......................
Funds Act, as
amended.
H.R. 4429...................... Developing and None............. None............. ......................
Empowering our
Aspiring Leaders
Act of 2025, as
amended.
H.R. 4430...................... Expanding WKSI None............. None............. ......................
Eligibility Act,
as amended.
H.R. 4431...................... Improving Capital None............. None............. ......................
Allocation for
Newcomers Act of
2025, as amended.
H.R. 4491...................... SBA IT None............. None............. ......................
Modernization
Reporting Act.
H.R. 4495...................... SBA Fraud Reduce by at Increase by Less ......................
Enforcement Least $500K. Than $500K.
Extension Act.
H.R. 4549...................... Office of Rural None............. None............. ......................
Affairs
Enhancement Act.
H.R. 5284...................... Claiming Age None............. None............. ......................
Clarity Act, as
amended.
H.R. 5345...................... ImprovIng Social None............. None............. ......................
Security's
Service to
Victims of
Identity Theft
Act, as amended.
H.R. 5346...................... Fair and None............. Increase by at Would increase
Accountable IRS Least $500K. revenues by $117
Reviews Act, as million over 2026-
amended. 2036.
H.R. 5348...................... Social Security None............. None............. ......................
Child Protection
Act of 2025, as
amended.
H.R. 5349...................... Tax Court None............. Increase by at Would increase
Improvement Act, Least $500K. revenues by $6
as amended. million over 2026-
2036.
S. 616......................... Foundation of the None............. None............. ......................
Federal Bar
Association
Charter
Amendments Act
of 2025.
----------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office; Joint Committee on Taxation
Mr. DAVIDSON. Mr. Speaker, I yield myself the balance of my time.
For reasons I explained earlier, I urge all of my colleagues to
support this bill, and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Ohio (Mr. Davidson) that the House suspend the rules and
pass the bill, H.R. 4429, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
____________________