The SEC staff has issued two no-action letters providing relief from the broker-dealer registration requirements of the Securities Exchange Act of 1934, amended, for two online venture capital funding platforms. Each funding platform, after confirming the "accredited investor" status of investors using the funding platform, granted such investors access to its start-up company financing database. Investments in start-up companies listed on the funding platform would be effected through special purpose investment funds (the "Investment Funds"), rather than by direct investment. In connection with each investment made by an Investment Fund, affiliates of the applicable funding platform would receive a carried interest (i.e., the right to receive a portion of the investment profits generated by the Investment Fund). The SEC staff was willing to grant the relief after finding no other broker-dealer indicia, such as transaction-based compensation or handling of customer funds, to be associated with the funding platforms. In making its determination, the SEC staff took the position that the receipt of carried interests in the Investment Funds by affiliates of the funding platforms did not constitute transaction-based compensation.

FundersClub Inc., SEC No-Action Letter (March 26, 2013) and AngelList LLC, SEC No-Action Letter (March 28, 2013).