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Banking and Finance Law

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Pepperdine Law Review

2021

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Innovation Meets Regulation: Firrma’S Significance, The Treasury’S Dilemma, And The New Normal For Foreign Investment In The U.S. Venture Capital Ecosystem, Jonathan Aaron Horn Aug 2021

Innovation Meets Regulation: Firrma’S Significance, The Treasury’S Dilemma, And The New Normal For Foreign Investment In The U.S. Venture Capital Ecosystem, Jonathan Aaron Horn

Pepperdine Law Review

One of the most powerful entities in the federal government is the little-known Committee on Foreign Investment in the United States (CFIUS), which is responsible for reviewing foreign investment transactions with U.S. businesses for potential national security threats. Originally, CFIUS was only able to review foreign investments that resulted in control of the U.S. company at issue, but the Foreign Investment Risk Review Modernization Act (FIRRMA) has significantly enhanced CFIUS’s scope to include review of minority investments. This Comment explores FIRRMA’s impact on foreign investment into the U.S. venture capital (VC) ecosystem and evaluates the uncertainty created for startups and …