Beneficial owners, not just the names on your cap table. The count looks through to natural persons who hold investment power or economic interest in the fund.
Here is how common investor types are counted:
- A married couple investing through a joint account typically counts as one beneficial owner
- A revocable trust counts as one beneficial owner (the grantor)
- An IRA counts as one beneficial owner (the account holder)
- Entity investors that own 10% or more of the fund and were formed for the purpose of investing trigger look-through treatment, where each underlying investor counts individually
- Entity investors not formed for the purpose of investing and holding less than 10% count as a single beneficial owner, regardless of how many underlying investors are inside
- Knowledgeable employees are excluded from the count entirely
See The 100 Investor Limit Under Section 3(c)(1) for the complete look-through rules and counting methodology.
This content is for informational purposes only and does not constitute legal, tax, or compliance advice. Consult qualified counsel for guidance specific to your situation. Capital Company is not a law firm and does not provide legal advice.