This legislation directs the Securities and Exchange Commission (SEC) to update the definition of a qualifying investment for venture capital fund advisers, specifically concerning their exemption from registration under the Investment Advisers Act of 1940. The revisions aim to broaden what constitutes a qualifying investment, thereby providing more flexibility for venture capital funds. The bill mandates that the SEC include equity securities issued by a qualifying portfolio company, whether acquired directly or through a secondary acquisition, within the definition of a qualifying investment. It also explicitly states that an investment in another venture capital fund will be considered a qualifying investment. Furthermore, the SEC must revise the conditions for a private fund to qualify as a venture capital fund, requiring that at least 51 percent of its aggregate capital contributions and uncalled committed capital consist of equity securities acquired directly from a qualifying portfolio company. Up to 49 percent of the fund's capital may then consist of investments in other venture capital funds or securities acquired in a secondary acquisition, offering a clearer framework for fund composition.