In the realm of venture capital, a qualifying investment refers to a direct investment made into a private company. Conversely, a non-qualifying investment encompasses investments made into any other type of asset, such as other funds, cryptocurrency, real estate, secondaries transactions, and alternative assets. If investors exceed a specific threshold (over 20% of their entire portfolio) in non-qualifying investments and oversee $150 million worth of investments overall (based on fair market value), they will no longer enjoy certain exemptions provided by venture capital regulations. Consequently, these managers will be required to register as an investment advisor with the SEC – a cumbersome process accompanied by additional reporting and financial audit obligations. Furthermore, they will only be permitted to raise funds from qualified clients who possess a net worth surpassing $2.2 million.