# INVEST Act passes in the House with momentum toward the Senate

Author:

The Carta Policy Team

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Read time:

8 minutes

Published date:

12 December 2025

The House passes the bipartisan INVEST Act to expand access to private markets, as the SEC shifts leadership and regulatory tone, and the White House pushes to preempt state AI laws through executive action.

## Topline

- INVEST Act clears the House with strong bipartisan vote
- SEC Commissioner Crenshaw to depart SEC with words of caution for private markets
- White House EO aims to preempt state AI patchwork
- Quick hits

## INVEST Act clears the House with strong bipartisan vote

The House of Representatives [passed the INVEST Act](https://financialservices.house.gov/news/documentquery.aspx?DocumentTypeID=2092#:~:text=Financial%20Services%20Committee%E2%80%99s%20Bipartisan%20Capital%20Formation%20Package%20Passes%20House) this week with a decisive 302-123 vote. 87 Democrats joined Republicans to advance this legislative package that will broaden access to capital for more founders and fund managers across the country.

### Why it matters to the innovation economy…

**_More capital_**. The INVEST Act will promote broader access to capital by:

- **Enabling venture capital fund managers to invest more capital** in other venture capital funds and portfolio company investments acquired through secondary transactions.
- **Expanding the size and investor limits for qualifying venture capital funds**, helping emerging managers assemble competitive funds.
- **Raising the private fund exemption threshold and indexing it to inflation**, ensuring smaller fund managers can continue to support small business capital formation.
- **Making it easier for startups and small businesses to connect with investors** by clarifying that demo days do not violate fundraising rules.

**_More investment opportunities_**. The INVEST Act will enable more individuals to benefit from private markets by:

- **Modernizing the accredited investor standard** by adding new on-ramps based on education, experience, or examinations.
- **Enabling retail investors to get exposure to private funds** through SEC-registered funds.
- **Permitting 403(b) retirement plans to invest in collective investment trusts (CITs)**.

**_More liquidity_**. The INVEST Act increases liquidity and makes it easier for companies to IPO, lowering barriers and reducing costs.

**Engagement matters**: Carta and our [Innovator Alliance](https://innovatoralliance.org/) partners have been working to educate, shape, and engage the broader innovation community for consensus.

## SEC Commissioner Crenshaw to depart SEC with words of caution for private markets

SEC Commissioner Caroline Crenshaw is set to depart the agency. Here are the highlights of her concerns:

- _Growth of private markets_: Crenshaw advocates for new disclosures on private issuers.
- _Retail access to private markets_: Urges stronger guardrails for democratizing access.
- _Data gaps and systemic risk monitoring_: Calls for more comprehensive data collection.
- _AI governance_: Urges a robust regulatory framework for AI capabilities.

**Bigger picture**: The growing politicization of independent agencies raises stakes for regulators and market participants.

## White House issues EO aimed at preempting state AI patchwork

President Trump signed an executive order aimed at creating a federal approach to AI policy. Key directives include:

- _Litigation mandate_: Establishment of an AI Litigation Task Force.
- _Evaluation of onerous state laws_: Identification of overly burdensome state laws.
- _Federal reporting and disclosure standard_: FCC to determine a federal standard for AI.
- _Legislative recommendations_: Preparation of a national AI framework for Congress.

**Why it matters**: 38 states enacted AI-related measures, creating a fragmented legal landscape.

## Quick hits

- **Crypto corner:** SEC grants DTC approval for tokenization pilot allowing tokenized securities to plug directly into existing market infrastructure.
- **OCC permits banks to act as intermediaries in crypto-asset trades**, enhancing regulatory clarity.
- **Final NDAA includes outbound investment restrictions**, preventing U.S. investments in certain sectors of the Chinese economy.
- **SEC chief accountant explores rule changes** to modernize oversight of audit inspections.
- **FSOC pivots its focus**, indicating a shift toward deregulation.