The number of allowed investors is contingent on how the fund seeks to be classified under the U.S. securities laws. Specifically, whether the fund intends to conduct a 506(b) or 506(c) offering and further whether the fund seeks to utilize the 3(c)(1) or 3(c)(7) exemption. Under these provisions private funds generally will take advantage of a safe harbor within the Securities Act of 1933 and avoid being defined and governed by the SEC as “investment companies” under the Investment Company Act of 1940 if they limit the number of investors to a particular number and a specific "accredited" or "qualified purchaser" standard. Dependent upon the forgoing such funds generally may include either 100, 499 or 1,999 investors. In certain circumstances private funds may also include within the 100 investor type of fund up to 35 “non-accredited investors.” We consult at the outset of fund formation to determine how a fund will be structured, the types of investors you are likely to attract and, therefore, how the fund should be classified.