SEC Company Response from Fundrise Growth Tech Fund, LLC (VCX) (CIK 0001867090) (VCX) — Dec 13, 2021
Fundrise Growth Tech Fund, LLC (VCX) (CIK 0001867090)
Date: Dec. 13, 2021 · CIK: 0001867090 · Accession: 0001137439-21-001280
AI Filing Summary & Sentiment
File numbers found in text: 333-257157, 811-23708
Referenced dates: July 19, 2021
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Stradley Ronon Stevens & Young, LLP
2000 K Street, N.W., Suite 700
Washington, D.C. 20006
Telephone 202-822-9611
Fax 202-822-0140
www.stradley.com
Sara P Crovitz
Partner
scrovitz@stradley.com
202.507.6414
December 13, 2021
VIA EDGAR
U.S. Securities and Exchange Commission
Division of Investment Management
100 F Street, N.E.
Washington, D.C. 20549-9303
Attention: Mr. John M. Ganley
Re:
Fundrise Growth Tech Fund, LLC
(formerly, Fundrise Growth Tech Interval Fund, LLC)
File Nos. 333-257157 and 811-23708
Dear Mr. Ganley:
This letter responds to the comments provided to Nicole Simon in a letter dated July 19, 2021 regarding the initial registration
statement on Form N-2 by Fundrise Growth Tech Interval Fund, LLC (the “Fund”) filed via the EDGAR system on June 17, 2021. We have summarized each of your comments below, in the order you provided them, and have set forth the Fund’s response
immediately below each comment. Defined terms not herein defined shall have the meaning set forth in the Fund’s registration statement.
Please note that the Registrant has determined that it will operate as a closed-end tender offer fund instead of operating as a
closed-end interval fund in reliance on Rule 23c-3 under the Investment Company Act of 1940, as amended (the “Investment Company Act”). In light of this change, the Fund intends to change its name to “Fundrise Growth Tech Fund, LLC” and will file an
amended Form N-8A to reflect such change and the Fund’s disclosures have been revised accordingly.
Philadelphia, PA • Malvern, PA • Cherry Hill, NJ • Wilmington, DE • Washington, DC • New York, NY
• Chicago, IL
A Pennsylvania Limited Liability Partnership
Mr. John M. Ganley
U.S. Securities and Exchange Commission
December 13, 2021
Page 2
FACING PAGE:
1.
Comment: When a pre-effective amendment is filed, please uncheck the box indicating that the filing will become effective when declared effective pursuant to
Section 8(c) of the Securities Act of 1933 (“Securities Act”). We note that on June 25, 2021, the Fund filed a delaying amendment pursuant to Rule 473 under the Securities Act.
Response: The Registrant has made this
change.
2.
Comment: Effective August 1, 2021, interval funds will be deemed to register an indefinite amount of securities pursuant to Rule 23c-3(e) under the Investment
Company Act and will pay registration fees using Form 24F-2. Assuming that the registration statement would not be declared effective until after August 1, 2021, the Registration Fee Table may be deleted. See Instructions to “Calculation of Registration Fee Under the Securities Act of 1933” in Form N-2.
Response: As noted above, the Registrant
no longer intends to operate pursuant to Rule 23c-3 under the Investment Company Act. Accordingly, the Registration Fee Table has not been deleted.
PROSPECTUS:
Cover Page
3.
Comment: The first paragraph under “Investment Strategies” provides that “the Fund will invest at least 80% of its net assets (plus the amount
of any borrowings for investment purposes) in the securities of technology and technology-related companies . . . and other investments (including derivatives) that provide the Fund with economic exposure to technology companies.”
(Emphasis added.) The adopting release for Rule 35d-1 under the Investment Company Act provides that an investment company with a name suggesting a type of investment may “include a synthetic instrument in the 80% basket if it has economic characteristics similar to the securities included in that basket.” See Investment Company Act Release No. 24828 (Jan. 17, 2001) (“Names Rule Adopting Release”) n.13 (emphasis added). Please revise the Fund’s 80% policy to refer to
investments with economic characteristics similar to technology companies, rather than to investments that provide economic exposure to technology companies.
Response: The
Registrant as made the following change to its 80% policy:
Mr. John M. Ganley
U.S. Securities and Exchange Commission
December 13, 2021
Page 3
Under normal circumstances, the Fund will invest at least 80% of its net assets (plus the
amount of any borrowings for investment purposes) in the securities of technology and technology-related companies (referred to herein as “technology companies”) and other investments (including derivatives) that provide the Fund with economic exposure to have
economic characteristics similar to investments in technology companies.
4.
Comment: The first paragraph under “Investment Strategies” sets forth examples of sectors and industries that include technology companies.
The last sentence of the paragraph provides, however, that “[t]echnology companies may also include, in the judgment of the Fund’s investment adviser, companies operating in other sectors, sub-sectors and industries.” The Names Rule
Adopting Release provides that “[a]s a general matter, an investment company may use any reasonable definition of the terms used in its name and should define the terms used in its name in discussing its investment objectives and strategies in the prospectus.” Names Rule Adopting Release n.43 (emphasis added). Please revise the
disclosure to define the term “technology” and delete language providing the Adviser with discretion to define the term.
Response: The
Registrant has revised its disclosure as follows:
Under normal circumstances, the Fund will invest at least 80% of its net assets (plus the
amount of any borrowings for investment purposes) in the securities of technology and technology-related companies (referred to herein as “technology companies”) and other investments (including derivatives) that provide the Fund with economic exposure to have
economic characteristics similar to investments in technology companies.
For this purpose, Ttechnology companies include companies operating in the information technology and telecommunication services sectors and companies operating in the following as well as technology-related companies in other sectors and industries, including: advertising (AdTech); sales
and marketing technology; internet and catalog retail; media; electrical equipment; biotechnology (BioTech); health
care equipment and supplies; and health care technology; pharmaceuticals; artificial intelligence; data and analytics; design tech; education technology (EdTech); financial services technology (FinTech); real estate technology (PropTech); gaming; internet services;
manufacturing technology; entertainment; mapping;
Mr. John M. Ganley
U.S. Securities and Exchange Commission
December 13, 2021
Page 4
payments; privacy & security; science and engineering; energy and sustainability technology; energy equipment and services; technology hardware, storage and peripherals; software; electronic equipment, instruments and components;
communications equipment; semiconductors and semiconductor equipment; agriculture; transportation; commercial services and supplies; chemicals; synthetic materials; aerospace and defense; and nanotechnology. Technology companies may also include, in the judgment of the Fund’s investment adviser, companies operating in other sectors, sub-sectors and
industries.
5.
Comment: The fourth paragraph under “Investment Strategies” states that the Fund seeks to invest in primary and secondary offerings of
Portfolio Companies. Please briefly explain the terms “primary and secondary offerings.”
Response: The
Registrant has revised its disclosure as follows:
The Fund intends to utilize private markets to acquire interests equity securities in primary and secondary offerings of Portfolio Companies. The Fund may invest in Portfolio Companies by purchasing securities directly from such Portfolio Companies, including through simple agreements for future equity (“SAFEs”). SAFEs represent a contractual right to
future equity of a company, in exchange for which the holder of the SAFE contributes capital to the company. SAFEs enable investors to convert their investment to equity upon the occurrence of triggering events set forth in the applicable
SAFE. The Fund may also invest in Portfolio Companies through transactions with existing shareholders of the Portfolio Companies, either by purchasing equity interests held by such shareholders or through the use of forward contracts.
6.
Comment: Footnote (2) to the pricing table provides that to the extent the Adviser pays for organizational or offering costs on behalf of the
Fund, the Fund must reimburse the Adviser on a monthly basis, subject to both an expense limitation and also a limit based on the amount of a percentage of gross proceeds from sales for an applicable month. The last sentence of the
footnote provides that unpaid amounts will be rolled forward to future months until the Adviser has been reimbursed in full.
Footnote (4) to the fee table on page 16 provides, however, the Adviser may seek reimbursement under the Expense Limitation Agreement for
a three-year period from the date of the payment made by the Adviser. Please make
Mr. John M. Ganley
U.S. Securities and Exchange Commission
December 13, 2021
Page 5
clear whether or not this three-year limitation for reimbursement of the Adviser is applicable to the Fund’s obligation
to repay organizational and offering costs incurred by the Adviser.
Response: The
Registrant confirms that the three-year limitation for reimbursement of the Adviser is applicable to the Fund’s obligation to repay organizational and offering costs incurred by the Adviser. Footnote (2) to the pricing table has been revised
accordingly:
Assumes all amounts currently registered are sold in the continuous offering. The Fund’s
estimated organization and offering costs to date and for the initial 12-month period of investment operations are $[______], or $[______] per Share. All organization and offering costs of the Fund paid by the Adviser shall be subject to
reimbursement pursuant to an Expense Limitation Agreement between the Fund and the Adviser. Subject to the limitations on reimbursements by
the Fund under the Expense Limitation Agreement, such reimbursement payments will be made in monthly installments, but the aggregate monthly amount reimbursed can never exceed [____]% of the aggregate gross proceeds from the offering of the
Fund’s Shares during the applicable month. If the sum of the total unreimbursed amount of such organization and offering costs, plus new costs incurred since the last reimbursement payment, exceeds the reimbursement limit described above for
the applicable monthly installment, the excess will be eligible for reimbursement in subsequent months (subject to the [_____]% limit), calculated on an accumulated basis, until the Adviser has been reimbursed in full. See
“Fund Expenses.”
Prospectus Summary – Principal Investment Strategies (Page 6)
7.
Comment: The first paragraph of this section states that technology companies include companies operating in the information technology and
telecommunication services sectors and companies operating in the following industries: internet and catalog retail; media; electrical equipment; biotechnology; health care equipment and supplies and health care technology. If the
Fund intends to make significant investments in particular sectors or industries, please identify them and provide the principal risks of those sectors or industries in the appropriate locations.
Response: The
Registrant notes that the definition of technology companies has been revised, as set forth in response to Comment 4 above. In addition, the Registrant’s risk disclosure has been revised to add the following principal risks:
Mr. John M. Ganley
U.S. Securities and Exchange Commission
December 13, 2021
Page 6
PropTech Company Risk. PropTech companies typically use automation, artificial intelligence, or other forms of technology developed for the property industry. These companies may be adversely impacted by
government regulations, economic conditions and deterioration in real estate markets generally. Real estate is highly illiquid and substantial in terms of capital required to develop, operate or buy. It is expensive to trade real estate, and
there can be a vast bid-offer spread (gap between what buyers will offer and sellers will accept). Research and due diligence costs are significant. Additionally, the products or solutions offered by PropTech companies may face technical
limitations related to connectivity, compatibility, and longevity, with many different technologies competing to become the standard. As a result, PropTech companies typically face intense competition and potentially rapid product obsolescence.
Furthermore, the customers and/or suppliers of PropTech companies may be concentrated in a particular country, region or industry. Any adverse event affecting one of these countries, regions or industries could have a negative impact on
PropTech companies. PropTech companies, especially smaller companies, tend to be more volatile than companies that do not rely heavily on technology. PropTech companies often struggle to gain market share to a degree that enables them to be
sustainable.
FinTech Company Risk. FinTech companies may be adversely impacted by government regulations, economic conditions and deterioration in credit markets. These companies may have significant exposure to
consumers and businesses (especially small businesses) in the form of loans and other financial products or services. FinTech companies typically face intense competition and potentially rapid product obsolescence. Many FinTech companies
currently operate under less regulatory scrutiny than traditional financial services companies and banks, but there is significant risk that regulatory oversight could increase in the future. Higher levels of regulation could increase costs and
adversely impact the current business models of some FinTech companies. FinTech companies involved in alternative currencies may face slow adoption rates and be subject to higher levels of regulatory scrutiny in the future, which could severely
impact the viability of these companies. FinTech companies, especially smaller companies, tend to be more volatile than companies that do not rely heavily on technology. The customers and/or suppliers of FinTech companies may be concentrated in
a particular country, region or industry. Any adverse event affecting one