SecProbe.io

CORRESP
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filename1.htm

    Wendell M. Faria, Esq.

Partner

wendell.faria@dentons.com

D   +1 202 496 7408

    Dentons US LLP

1900 K St NW

Washington, DC 20006

United States

dentons.com

Wendell Faria

Partner

February 12, 2025

Kimberly A. Browning, Senior Counsel

United States Securities and Exchange Commission

Division of Investment Management

100 F Street, N.E.

Washington, DC 20549-3010

    Re:
    C1 Fund Inc. (the “Company”)

    Registration Statement on Form N-2, as amended (“Registration Statement”)

    Filed November 12, 2024 and amended on January 21, 2025

    File Nos.: 333-283139, 811-24002

Dear Ms. Browning:

On behalf of C1 Fund Inc. (the “Company”
or “Fund”), we submit to the staff (the “Staff”) of the Securities and Exchange Commission (the
 “Commission”) this letter setting forth the Company’s responses to the oral comments you provided on January
24, 2025 to the Testing-the-Waters materials we shared with you via videoconference (the “Testing-the-Waters materials”).

    1.
    Please address whether there
    is consistency between the information presented in the Testing-the-Waters materials and the disclosure provided in the Registration
    Statement, while acknowledging Rule 163B under the Securities Act of 1933 and the materiality standard required  in Section
    12(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and the anti-fraud provisions of the Securities
    Exchange Act of 1934, as amended (the “Exchange Act”).

    Response:
    We have determined that there is consistency
    between the Testing-the-Waters materials and the Registration Statement. In its release adopting Rule 163B,1
    the Commission stated:

    “In the Proposing Release, the
    Commission observed that information in a Rule 163B communication must not conflict with material information in the related registration
    statement. This statement was intended to remind issuers that, although such communications would be exempt from Section 5 of the
    Securities Act, issuers nevertheless must take care to ensure that they are made in compliance with other provisions of the federal
    securities laws. We acknowledge the concerns expressed by certain commenters regarding the possibility that circumstances or messaging
    may change between the time the pre-filing Rule 163B communications are made and the time of filing, causing the information in the
    Testing-the-Waters materials to differ from information in the related registration statement. At the same time, it is important
    to keep in mind that statements made in the Testing-the-Waters materials and in the related registration statement, if filed, must
    not contain material misstatements or omissions at the time the statements are made.”

1
Release No. 33-10699, File No. S7-01-19, 84 FR 53011, 53015-53016, nn. 80-82 and accompanying text (Oct. 4, 2019) (the “Adopting
Release”).

      We
                                            note that except for changes in circumstance between the time the pre-filing Rule 163B communications
                                            were made and the disclosures were included in the as-filed Registration Statement2,
                                            the Testing-the-Waters materials are materially consistent with the information presented
                                            in the Registration Statement and do not contain material conflicts that might be construed
                                            as misstatements or omissions at the time the statements were made.

    We further note that, while the Testing-the-Waters
    materials in a few instances provide information in greater detail than in the Registration Statement, such as listing the names
    of certain established late-stage companies that have growth potential or presenting case studies of potential investment opportunities,
    there is consistency in the information included in both forms of communications. Consequently, in our view, the information disclosed
    in the Testing-the-Waters materials and the Registration Statement should be viewed as materially consistent and do not create a
    circumstance in which material misstatements or omissions might be deemed to have been made in connection with the use of the Testing-the-Waters
    communications. We believe that in determining whether the information presented in the Testing-the-Waters materials might be deemed
    to be materially misleading, the sophistication of the intended recipients should be considered. Consistent with the requirements
    of Rule 163B, the Fund has presented and intends to present these materials only to potential investors that are Qualified Institutional
    Buyers (“QIB”) and Institutional Accredited Investors and which, therefore, have the degree of financial experience
    and sophistication to understand the information presented and ask the types of follow-up questions to elicit the information necessary
    to make an informed investment decision.

    We acknowledge that Rule 163B communications
    are “offers” as defined in Section 2(a)(3) of the Securities Act and are, therefore, subject to Section 12(a)(2) liability
    in addition to the anti-fraud provisions of the federal securities laws, as stated on page 7 of the Adopting Release.

    2.
    Please provide the Staff with
    the research undertaken to support the statement that  the C1 Fund is “the first ever” publicly-traded, closed-end
    fund investing in high growth pre-IPO digital assets companies.

    Response:
    The statement in the Testing-the-Waters materials
    that refers to the Fund as the “first ever” publicly traded, closed-end fund investing in high growth pre-IPO digital
    assets companies is supported by research and review of N-2 registration statements in the Commission’s EDGAR database of all
    public closed-end funds that reference in their investment strategy “digital asset,” “crypto”, “cryptocurrency”
    and similar terms. The Fund, in conjunction with its counsel, performed a manual review of approximately 100 registration statements.
    None of the funds reviewed disclosed a strategy of investing primarily in high growth pre-IPO digital assets companies.

    Furthermore, the Fund’s founders, Dr.
    Kidwai and Messrs. Lempres, Zhao, and Hytha are experienced professionals in the digital assets industry. They are not aware of the
    existence of any publicly-traded, closed-end fund investing primarily in high growth pre-IPO digital assets companies.

    Based on the foregoing, the Fund reasonably
    believes that it is “the first” publicly-traded, closed-end fund investing primarily in high growth pre-IPO digital assets
    companies.

2 For example, in the Testing-the-Waters materials, Lake
Dai was listed as an independent director of C1 Fund. She later resigned, which was reflected in the Form N-2/A amendment to in the Registration
Statement as filed on January 21, 2025.

    3.
    Please provide the Staff with the
    research undertaken to support that “C1 Fund has unrivaled access to information in this space.”

    Response:
    The above-referenced statement is supported
    by the Fund’s research that there is no other publicly-traded, closed-end fund (including BDC) that has an investment policy
    to invest primarily in high growth pre-IPO digital assets companies and has disclosed the types of investment strategies similar
    to the Fund’s in pursuing this policy. As disclosed in the Registration Statement, C1 Advisors, the investment adviser to the
    Fund, will use a set of investment strategies that involves (1) accessing restricted securities issued by digital asset services
    and technology companies that are traded on a secondary marketplace that (or an affiliate of which) is registered as a broker-dealer
    and regulated as an alternative trading system in accordance with Regulation ATS, (2) acquiring securities directly in private placements
    conducted by digital asset services and technology companies, and (3) engaging in transactions in restricted securities with qualified
    investors (i.e., persons that are qualified as accredited investors or that meet a higher qualification standard, such as QIBs or
    qualified purchasers). Under all of these strategies, the knowledge and experience of the members of C1 Advisors’ Investment
    Committee, particularly as prior investors and as senior management persons of digital asset services and technology companies, will
    provide the Fund with unique access to information and will be important in the successful use of these investment strategies. For
    these reasons, the Fund believes that use of the term “unrivaled” is appropriate.

    Although we continue to believe that use
    of the term “unrivaled” is appropriate, we have decided, after further consideration, to remove this statement from our
    Testing-the-Waters materials.

    4.
    Please inform the Staff of how many
    Testing-the-Waters meetings the Fund has done, and now many more Testing-the-Waters meetings the Fund plans to have moving forward,
    and when these meetings will take place.

    Response:
    The Fund (as well as its representatives)
    has conducted twenty-two Testing-the-Waters meetings  in September and October of 2024. Representatives of the Fund and The
    Benchmark Company, LLC, as managing underwriter, were present at such meetings, along with representatives from 22 qualifying institutions.
     Moving forward, the Fund plans to have approximately 20 Testing-the-Waters meetings, which the Fund anticipates will occur
    during February and March of 2025.

* * *

If you have any questions, or if we may be of any assistance, please
do not hesitate to contact the undersigned at 202 496 7408 or wendell.faria@dentons.com, or my colleague, Brian Lee at 212.768.6926
or brian.lee@dentons.com.

Very truly yours,

/s/ Wendell M. Faria

Wendell M. Faria, Esq.

Partner