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

March 7, 2025

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/A

Filed November 12, 2024, as amended on January 21, 2025 and March 7, 2025

File Nos.: 333-283139, 811-24002

Dear Ms. Browning:

This letter contains our responses to the comments
we received from the staff (“Staff”) of the Securities and Exchange Commission (the “Commission”) on Amendment
No. 1 to the Registration Statement on Form N-2 (the “Amendment”) for C1 Fund Inc., (the “Company”),
which we filed with the Commission on January 21, 2025. We received oral comments from Brian Szliagyi of the Commission staff on
February 12, 2025, and from you on February 14, 2025 and February 18, 2025. Please see below our responses. For ease of
reference, we have attempted to paraphrase the comment preceding each response. References to “prior comment” refer to comments
received from the Staff in its December 12, 2024 letter. References to “Amendment No. 2” refer to Amendment No. 2
to the Registration Statement filed on March 7, 2025. Page number references in our responses are to the page numbers in the clean version of Amendment No. 2, unless stated otherwise. Capitalized
terms used but not defined in this letter have the meanings ascribed in Amendment No. 2.

General Comments

    1.
    We note that we may have additional comments pending further review of the Registration Statement.

    Response:
    The Company acknowledges the Staff’s comment.

    2.
    The Staff may supplementally request any test-the-waters materials used in connection with this Offering. Please keep the Staff apprised of any material changes to test-the-water materials.

    Response:
    The Company acknowledges the Staff’s comment. There have been no material changes to the test-the-waters materials that was shown to the Staff via videoconference on January 24, 2025.

Comments Relating to the Staff’s Prior Comments

    3.
    In furtherance of prior comment no. 8, please harmonize the descriptions of the Adviser’s management. We note that in certain places, the terms “Adviser” and “principals of the Adviser” appear to be used interchangeably.

    Response:
    The
    Company has harmonized the term Adviser throughout Amendment No. 2 and added a Glossary of Frequently Used Defined Terms (the “Glossary”) on page v. The Glossary of Amendment No. 2 now makes
    clear that the Company uses the term “Adviser” to refer to “C1 Advisors LLC,” which is the entity that
    serves as investment adviser to the Company, and the term “Investment Committee” when referring to the Adviser’s
    Investment Committee and the individuals that comprise the Investment Committee.

    4.
    In
    furtherance of prior comment no. 9, please disclose whether the Company has applied to list its common stock on the New York Stock
    Exchange. Please also disclose whether the offer and sale of the common stock is conditioned upon the approval from the New York
    Stock Exchange (“NYSE”) to list the common stock on the NYSE.

    Response:
    The Company has updated the disclosure on the cover of the prospectus to indicate that the Company has applied to list its common stock (the “Common Shares”) on the NYSE. The Company has also added disclosure on the cover of the prospectus of Amendment No. 2 to indicate that the offer and sale of the Common Shares and the trading of such shares on the NYSE is conditioned on the NYSE’s approval to list the Common Shares.

    5.
    In furtherance of prior comment no. 10, please remove the discussion of non-principal strategies from the cover page and prospectus summary.

    Response:
    The Company has removed the discussion of non-principal investment strategies from the cover page and prospectus summary of Amendment No. 2. The Company has also clarified the Company’s principal investment strategy in Amendment No. 2.

    6.
    In furtherance of prior comment no. 10, we note that there appears to be an inconsistency in how you describe private secondary marketplaces. See for example, your responses to prior comment 10 and prior comment 41.

    Response:

    The Company has revised the penultimate sentence
    in our response to prior comment 10 to state that “Each of the marketplaces listed in the Staff’s comment is currently registered
    (or has an affiliate that is registered) as a broker-dealer and ATS.” (Italics added to emphasize the added words in order
    to harmonize our responses to prior comment 10 and prior comment 41.)

    The Company has also revised our disclosure on
    page 4 of Amendment No. 2 accordingly.

    7.
    In furtherance of prior comment no. 11, in describing your principal investment strategy, please harmonize usage of inconsistent terms throughout the registration statement. We note that certain terms seem to be used interchangeably, such as “private” vs “non-public” or “rapidly growing” companies vs. “leading” companies.

    Response:
    The Company has revised our description of the Company’s principal investment strategy in Amendment No. 2 using clear and consistent terms. The Company has added a Glossary on page v of Amendment No. 2 to assist the reasonable investor. For example, Amendment No. 2 no longer uses the term “non-public company” and instead consistently uses the term “private company.” In the Glossary of Amendment No. 2, the Company provides a definition of the term “private company.”

    8.
    In furtherance of prior comment 12, define “equity-linked securities” and add an attendant risk factor.

    Response:

    The Company has defined the term “equity-linked
    securities” in Amendment No. 2 to mean a security the returns on which are linked to the performance of an equity security or
    a basket or index of securities. This definition is set forth on the cover page and in the Glossary of Amendment No. 2.

    The Company has added a related risk factor on
    page 25 of Amendment No. 2.

    9.
    In furtherance of prior comment 14, please harmonize the disclosure regarding leverage. Please reconcile your disclosure on page 9 and page 15.

    Response:
    The Company has revised its disclosure regarding leverage on page 8 of Amendment No. 2 to harmonize with the disclosure on page 14 of Amendment No. 2.

    10.
    In furtherance of prior comment 21, please harmonize the disclosure regarding the 7% sales load. We note that the 7% sales load is incorrectly referred to as a reduction in the third paragraph of the Underwriting section.

    Response:
    The Company has revised the disclosure of the 7% sales load in the third paragraph of the Underwriting section of Amendment No. 2 to harmonize with the discussion of the 7% sales load in other parts of this Amendment No. 2.

    11.
    In furtherance of prior comment 35, please harmonize your use of the term “C1 Thirty company” with other terms which you seem to use interchangeably.

    Response:
    The
    Company has harmonized the description of “C1 Thirty company” throughout Amendment No. 2. The Company notes that
    Amendment No. 2 also uses the term “portfolio company” to describe companies that the Company invests in (whether
    through its principal strategy or its non-principal strategy). The Company has added definitions of “C1 Thirty,” “C1 Thirty
    companies” and “portfolio company” in the Glossary to help the reasonable investor in better understanding these terms.

    12.
    In furtherance of prior comment 36, where applicable in the prospectus, please explain the meaning of “concentration.” See Item 8.2(b)(2) of Form N-2.

    Response:
    On pages 2 and 21 of Amendment No. 2 and elsewhere, the Company explains that “[t]he Investment Company Act requires the Company to state the extent, if any, to which it concentrates investments in a particular industry or group of industries. While the Investment Company Act does not define what constitutes “concentration” in an industry, the staff of the SEC takes the position that, in general, investments of more than 25% of a fund’s assets in an industry constitutes concentration.”

    13.
    In furtherance of prior comment 46, with respect to the investment channels cited, please disclose approximate percentages of the Fund’s assets that will be invested through such channels.

    Response:
    As described on page 4 of Amendment No. 2, the Company intends to acquire securities in pursuit of its principal investment strategy through the following principal channels: (i) making purchases on private secondary marketplaces, (ii) making direct purchases in non-public offerings and (iii) making purchases in one-off private transactions. As disclosed in Amendment No. 2 on page 4, C1 Advisors does not have predetermined limits or requirements for acquiring securities through any particular channel. The Company believes not having a predetermined percentage allows it to maximize stockholder value.

    14.
    In furtherance of prior comment 46, please explain how the Fund will identify one-off transactions with accredited investors in the C1 Thirty Companies.

    Response:
    The Company has revised the disclosure on pages 4 and 54 of Amendment No. 2 and elsewhere to indicate that the Company believes that the Advsier will be able to identify these one-off transactions via the Investment Committee members’ extensive existing relationships in the venture capital community and digital asset industry. The Company will be able to engage in these transactions with accredited investors in reliance on an available exemption from registration under the Securities Act.

    15.
    We reissue prior comment 49. We acknowledge your response that the Company will not invest through SPVs, and investments through SPVs is not part of the Company’s strategy. However, please supplementally advise whether the Company wholly owns or primarily controls any entity (including any SPV) that primarily engages in investment activities in securities or other assets, and whether you expect to wholly own or primarily control any such entity.

    Response:
    We supplementally advise the Staff that the Company does not wholly own nor does it primarily control any entity (including any SPV) that primarily engages in investment activities in securities or other assets, and the Company expects that it will not wholly own or primarily control any such entity.

    16.
    In furtherance of prior comment 58, please clarify to the Staff where in the prospectus you have added the risk disclosure referenced in your response to prior comment 58.

    Response:

    We advise the Staff that in Amendment No. 1
    filed on January 21, 2025, the Company clarified that the Company’s investment focus is not limited to digital asset services
    and technology companies in Europe and Asia, but rather, its focus is on digital asset services and technology companies globally
    (except for China, Hong Kong and Macao).

    In
    accordance with the foregoing, the Company has added a bullet point on page 10 to the summary risk factors of Amendment No. 2
    to disclose that “Global economic conditions, including those from macro-trends and global events, may adversely affect our
    investments.” A full risk discussion of this risk factor is set forth on page 19 of Amendment No. 2.

    17.
    In furtherance of prior comment 61, please define the term “follow-on investment” and explain what you mean.

    Response:

    The Company has revised the disclosure on page 10
    of Amendment No. 2 and elsewhere to replace the term “follow-on investment” with “subsequent financing round,”
    which the Company defines as “an opportunity to make a voluntary additional investment that provides further funding to support
    a company’s continued growth and development.” The Company believes the term “subsequent financing round” will be better
    understood by the reasonable investor because it appears to be more widely used than “follow on investment.”

    In addition, the Company has revised Amendment
    No. 2 to disclose that we do not expect that the Company would be required to invest in a subsequent financing round with respect
    to any securities that it holds, and the Company will not enter into any commitment that would obligate it to invest in a subsequent financing
    round.

    18.
    In furtherance of prior comment 70, please harmonize your discussion of ETFs and ETPs.

    Response:

    The Company has harmonized its discussion of ETFs
    and ETPs throughout Amendment No. 2.

    Further, the Company has defined these terms in
    the Glossary as follows:

    ETF means an exchange-traded fund that is
    registered as an investment company under the Investment Company Act and whose shares are registered under the Securities Act and
    listed for trading on a national securities exchange.

    ETP means an exchange-traded product that is not
    registered as an investment company under the Investment Company Act but whose shares are registered under the Securities Act and listed
    for trading on a national securities exchange.

    19.
    In furtherance of prior comment 76, disclose whether the Adviser has registered with the Commission.

    Response:
    The Company has provided updates in Amendment No. 2 to disclose that the Adviser has applied to register as an investment adviser with the Commission.

    20.
    In furtherance of prior comment 91, please supplementally provide the Staff with an update on whether you have entered into any co-investment arrangements pursuant to Mass Mutual Life Ins. Co. (SEC No-Action Letter, June 7, 2000).

    Response:
    The Company confirms that the Company has not entered into any co-investment arrangement in reliance on Mass Mutual Life Ins. Co. (SEC No-Action Letter, June 7, 2000) (“Mass Mutual Letter”) and does not have any current intention to enter into any such arrangement before the Company begins operations.  The Company confirms that if the Company enters into any such co-investment arrangement after the Company has begun operations, it will conform its arrangement to meet all conditions of the Mass Mutual Letter or file an application with the Commission seeking an order of the Commission granting exemptive relief to do so.

    21.
    In furtherance of prior comment 92, please supplementally provide the Staff with an update on whether you have adopted an allocation policy.

    Response:
    The Company confirms that the Adviser has not entered into an allocation policy and does not have a present intention to do so because the Adviser expects that its only client at the time the Company begins operations and for the foreseeable future will be the Company. The Adviser confirms that it will adopt an allocation policy that establishes conditions under which it may engage in aggregated trades with other clients if the Adviser later enters into investment advisory agreements with other clients, including registered investment companies.

    22.
    In furtherance of prior comment 93, please supplementally provide the Staff with an update on whether you opted into Maryland Control Share Acquisition Act.

    Response:
    The Company confirms that there has been no change to its response to prior comment 93. The Company has not opted into the Maryland Control Share Acquisition Act and does not intend to do so before it begins operations.

    23.
    In furtherance
of prior comment 94, please explain the significance of the language within square brackets on page 47, or delete, as appropriate.

    Response:
    The
language within square brackets that appeared on pa