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So far Mike Scherzer has created 402 blog entries.

The Scherzer Deal Report: November 3-7, 2025

Here is this week’s Deal Report for private equity and venture capital activity for US-based PE and VC firms and portfolio companies, brought to you by Scherzer International.

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Fundraising for PE & VC Funds

Founders’ Co-op
$50M
Sixth fund

Generate Capital
$1B
Credit business

Teleo
$350M
Second fund

Private Equity Deals

WJ Partners
7 Brew
Undisclosed amount
Springdale, AR-based drive-thru coffee chain

Nexphase Capital Partners
Always Best Care
Undisclosed amount
Rocklin, CA-based in-home senior care company

Aquarian
Brighthouse Financial
Undisclosed amount
Charlotte, NC-based life insurer

Consello Capital
CleanBoss
Undisclosed amount

New York, NY-based maker of cleaning and disinfectant products

L Squared
Ergo
Undisclosed amount
New York, NY-based geopolitical and strategic intelligence firm

Brydon Group
Firm Prospects
Undisclosed amount
Scituate, MA-based legal-tech platform

Bonaccord Capital Partners
Kingswood Capital Management
Undisclosed amount
Los Angeles, CA-based private equity firm focused on midmarket buyouts

Five Arrows
NetVendor
Undisclosed amount
Tualatin, OR-based provider of vendor compliance management software

JLL Partners
Parks Medical Electronics
Undisclosed amount
Aloha, OR-based ultrasound manufacturer

Haven Capital Partners and Altaline
Saratoga Compliance Solutions
Undisclosed amount
New York, NY-based insurance compliance platform

Arsenal Capital Partners
ThermoSafe
Undisclosed amount
Arlington Heights, IL-based packaging business

Venture Capital Deals

Allumia Ventures, Artis Ventures, City Light Capital, LifeArc Ventures, and Limitless Ventures
Affect Therapeutics
$26M
McLean, VA-based gamified mental health startup

Goldman Sachs Alternatives, Evolution Equity Partners, and CapitalG
Armis
$435M
San Francisco, CA-based cyber exposure management

Third Rock Ventures, RA Capital Management, Yosemite, and Sozo Ventures
Azalea Therapeutics
$65M
Berkeley, CA-based genomic medicines startup that wants to apply CRISP to in vivo CAR-T

Forbion, OrbiMed, Enavate Sciences, and Frazier Life Sciences
Braveheart Bio
$185M
San Francisco, CA-based developer of therapeutics for hypertrophic cardiomyopathy

Lightspeed Venture Partners, Bessemer Venture Partners, Angular Ventures, and Uncork Capital
DualBird
$25M
Westborough, MA-based data workload acceleration startup

Unity Ventures, Kylinhall Partners, Vision Plus Capital, Xstar Capital, and the founders of Anker Innovations
Evotrex
$16M
Los Angeles, CA-based developer of power-generating RVs

Basis Set Ventures, Patron, USC Viterbi, AME Cloud Ventures, Matt Pittinsky, Afore Capital, and YC
Flint
$15M
New York, NY-based startup building AI tutors for schools

Benchmark
Fomo
$17M
New York, NY-based social crypto trading app

Menlo Ventures, Mayfield, Innovation Endeavors, NVentures, M12, Snowflake Ventures, and Databricks
Inception
$50M
Palo Alto, CA-based developer of diffusion LLMs

Atomic, Foresite Capital, and Polaris Partners
Indomo
$25M
Boston, MA-based provider of at-home prescription dermatology treatments

LionTree, Eldridge Industries, Slow Ventures, DFJ, Vista Credit Partners, SoftBank, and Tekne Capital
Metropolis
$500M
Los Angeles, CA-based tech-enabled parking lot network

A91 Partners and Goldman Sachs Alternatives
MoEngage
$60M
San Francisco, CA-based customer engagement platform for consumer brands

ABL Bio
Neok Bio
$75M
Palo Alto, CA-based cancer drug developer

Catalyst Investors, Battery Ventures, Tower Research Ventures, K Street Capital, and Blu Ventures
Procurement Sciences
$30M
Dunstable, MA-based provider of government contracts software

Khosla Ventures and Kleiner Perkins
Reevo
$70M
Santa Clara, CA-based go-to-market platform

Fortress Investment Group, Citadel Securities, Pantera Capital, Galaxy Digital, Brevan Howard, and Marshall Wace
Ripple
$500M
San Francisco, CA-based cryptocurrency company behind XRP

Double Point Ventures, Arch Venture Partners, Khosla Ventures, Bezos Expeditions, NTI, METIS, Australian National Reconstruction Fund, T.Rx Capital, QIA, K5 Global, Protocol Labs, and IQT
Synchron
$200M
New York, NY-based non-surgical brain-computer interface startup

Sofreh Capital
Tala Health
$100M
Santa Monica, CA-based developer of an agentic platform for health care

M13, Primary Venture Partners, and Lerer Hippeau
Teleskope
$25M
New York, NY-based data security startup

Intel Capital, a16z, Abstract Ventures, and Lytical Ventures
Truffle Security
$25M
San Francisco, CA-based enterprise credentialing startup

A.P. Moller, Galvanize, Ora Global, and Sequoia Capital
Upway
$60M
New York, NY-based provider of refurbished e-bikes

November 12th, 2025|Scherzer Deal Report|

Independent Contractors, Misclassification, and the FCRA: Lessons from Joel Galarza’s Eleventh Circuit Case

The Eleventh Circuit’s recent decision in Galarza v. One Call Claims, LLC sent ripples through compliance and risk management circles. At its core, the case addressed whether three insurance adjusters labeled as independent contractors were actually employees under the Fair Labor Standards Act (FLSA). The court applied the economic realities test and concluded that a jury could reasonably find these workers were employees, reversing the district court’s summary judgment in favor of the companies. Five of six factors favored employee status, including:

Control over work: The companies dictated schedules, monitored performance, and approved overtime.
Economic dependence: Adjusters worked exclusively for the companies for nearly two years.
Integral role: Their work was central to the companies’ operations.
Permanency: Long-term, exclusive engagements suggested employment rather than independent contracting.

Why This Matters for Employment Background Screening

While the Galarza case was decided under the FLSA, it raises a critical question for compliance professionals: Should independent contractors be treated as employees for purposes of the Fair Credit Reporting Act (FCRA)?

Under the FCRA, requirements such as stand-alone disclosures, written authorization, and pre-adverse action notices apply when a consumer report is obtained for “employment purposes.” The statute defines this as evaluating a consumer for employment, promotion, reassignment, or retention as an employee. Although Federal Trade Commission (FTC) staff reports have suggested that the FCRA’s “employment purpose” provision may extend to certain independent contractors, courts have generally taken a narrower view. For example, in Smith v. Mutual of Omaha (S.D. Iowa), the court held that background screening for contractor roles did not trigger the FCRA’s employment-related protections.

However, the Galarza decision underscores a practical risk: labels don’t control legal outcomes. If a contractor is later deemed an employee under an “economic realities” or similar test, a company could face exposure—not just under wage laws, but potentially under FCRA if the screening process didn’t meet employment-purpose requirements.

Compliance Takeaways

Don’t Rely on Labels Alone
Contracts calling someone an “independent contractor” won’t shield you if the working relationship looks like employment. Courts focus on substance over form.
Assess Classification Before Screening
If the role involves long-term, exclusive work under significant control, treat the individual as an employee for FCRA compliance. This means providing proper disclosures, obtaining written consent, and following adverse action procedures.
Update Policies and Vendor Agreements
Ensure your background screening policies clearly address contractor roles and include contingency plans if classification changes.
Monitor Legal Trends
The Eleventh Circuit’s ruling aligns with broader enforcement trends emphasizing misclassification risks. Expect more scrutiny in wage-and-hour and consumer reporting contexts.

Bottom Line

The Galarza case is a wake-up call: misclassification isn’t just a wage-and-hour issue—it’s a compliance risk that touches background screening and FCRA obligations. When in doubt, err on the side of treating high-control, long-term contractors as employees for screening purposes. It’s a small step that can prevent big liability

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

November 11th, 2025|Compliance Corner, FCRA|

The Scherzer Deal Report: October 27-31, 2025

Here is this week’s Deal Report for private equity and venture capital activity for US-based PE and VC firms and portfolio companies, brought to you by Scherzer International.

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Fundraising for PE & VC Funds

Arlington Capital Partners
$6B
Seventh fund

Insignia Capital Group
$500M
Third fund

Sequoia Capital
$950M
New early-stage fund ($750M) and a new seed fund ($200M)

Private Equity Deals

Incline Equity Partners
Advanced Solutions International
Undisclosed amount
Alexandria, VA-based provider of engagement management software for associations, trade unions and nonprofits

Platinum Equity
Anuvu
Undisclosed amount
Lombard, IL-based provider of entertainment and high-speed connectivity for airlines

Verite Capital Partners
Buffalo Biodiesel
$300M
Buffalo, NY-based used-cooking-oil recycler and renewable green energy fuel producer

Francisco Partners
Jamf
$2.2B
Minneapolis, MN-based enterprise security and management platform for Apple devices

Forward Consumer Partners
Justin’s
Undisclosed amount
Wood-Ridge, NJ-based peanut butter brand

Centerbridge Partners
MeridianLink
Undisclosed amount
Costa Mesa, CA-based credit reporting and lending platform

Ares Management and Makorora Management
Plymouth Industrial REIT
$2.1B
Boston, MA-based real estate investment trust

Great Hill Partners
Ren
Undisclosed amount
Indianapolis, IN-based provider of donor-advised fund solutions

Blackstone
Shermco
$1.6B
Irving, TX-based provider oflectrical equipment services

Venture Capital Deals

DBL Partners, Nuveen, Autotech, Allison Transmission, Rethink Food, and Black Forest Ventures
Agtonomy
$18M
South San Francisco, CA-based provider of agriculture and land management software

TCV, Bessemer Venture Partners, CRV, and Entrée Capital
Archy
$20M
San Jose, CA-based dental practice software platform

ACME Capital, Ridge Ventures, and Twelve Below
Arya Health
$18.2M
New York, NY-based developer of post-acute-care agents

Greycroft, CrowdStrike Falcon Fund, Accel, and Felicis Ventures
ConductorOne
$79M
Portland, OR-based identity security and access governance startup

Tribeca Venture Partners, NEA, SineWave Ventures, Harrison Metal, Singtel Innov8, Samsung Next, Nimble Partners, and Alumni Ventures
CoreStory
$32M
San Francisco, CA-based code modernization platform

Luma Group, First Spark Ventures, Techas Capital, Micah Spear, Civilization Ventures, LifeX Ventures, Incite Labs, Mintaka Ventures, and NZVC
Curve Biosciences
$40M
San Mateo, CA-based chronic disease blood-testing and monitoring startup

Lightspeed, Index Ventures, Evantic, and Sequoia Capital
Fireworks AI
$250M
Redwood City, CA-based AI inference startup

Norwest Venture Partners, Cthulhu Ventures, Leap Forward Ventures, Wyoming Venture Capital, Echelon, Wyoming Business Council, and Sand Hill Angels
Frontline Wildfire Defense
$48M
Jackson Hole, WY-based fire sprinkler and detection startup

JPMorgan Asset Management led, Ray Dalio’s family office
Fruitist
$150M
Los Angeles, CA-based healthy snackmaker

a16z
Harvey
$150M
San Francisco, CA-based legal AI startup

Yttrium, International Airlines Group, World Kinect, and Shell Ventures
i6
$20M
Lodi, NJ-based provider of digital fuel management for aviation

Atomic, Foresite Capital, and Polaris Partners
Indomo
$25M
San Francisco, CA-based provider of an at-home prescription corticosteroid injection for acne

NEA, 776, Accel, a16z, and Carpenter Capital
Kaizen
$21M
New York, NY-based developer of e-government solutions

Bessemer Venture Partners, Iconiq, General Catalyst, Redpoint Ventures, Benchmark, and YC
Legora
$150M
New York, NY-based collaborative AI platform for lawyers

Zeev Ventures
Lettuce Financial
$28M
San Francisco, CA-based fintech platform that provides automated tax and accounting services for solopreneurs, freelancers, and contractors

Kindred Ventures, Basis Set Ventures, Peak XV Partners, GitHub Fund, and YC
Mem0
$24M
San Francisco, CA-based AI memory infrastructure platform

Communitas Capital, BTG Pactual, and L2 Point Management
SimSpace
$39M
Boston, MA-based enterprise cyber defense simulator

Georgian, Avenir, 01A, Index Ventures, IVP, Citi Ventures, and Slow Ventures
Sublime Security
$150M
Washington, DC-based agentic email security platform

Venrock and Two Seas Capital
Syllo
$30M
New York, NY-based legal tech startup

OpenAI Startup Fund, Lux Capital, and Founders Fund
Valthos
$30M
San Francisco, CA-based biodefense startup

DST Global, CapitalG, Sequoia Capital, Greycroft, a16z, Avra, and Bond
Whatnot
$225M
Culver City, CA-based live-shopping platform

T1D Fund, Polaris Partners, AbbVie, Regeneron, Sanofi, Mission BioCapital, Lightspeed, KdT Ventures, Boxer Capital, and Pear VC
Zag Bio
$80M
Cambridge, MA-based developer of thymus-targeted medicines for autoimmune diseases

November 5th, 2025|Scherzer Deal Report|

A Unified Credit Reporting System: CFPB Clarifies Federal Preemption Under the FCRA

On October 28, 2025, in a significant move toward regulatory clarity, the Consumer Financial Protection Bureau (CFPB) issued a new interpretive rule reaffirming the broad preemptive scope of the Fair Credit Reporting Act (FCRA) over state laws. This rule replaces the narrower interpretation issued in July 2022, which the CFPB formally withdrew in May 2025.

Why This Matters

The FCRA, enacted in 1970 and amended multiple times since, governs the creation and use of consumer reports. It has always included a preemption clause, but the scope of that clause has evolved. In 1996, Congress expanded FCRA’s preemption to cover specific subject matters, aiming to prevent a fragmented regulatory landscape. This expansion was made permanent in 2003 to support a unified national credit reporting system.

The CFPB’s latest interpretive rule confirms that the FCRA broadly preempts state laws that touch on the subject matter regulated by the federal statute. This clarification is intended to promote consistency across the credit reporting industry and ensure that consumers and businesses operate under a single, coherent set of standards.

The Shift from 2022

The 2022 interpretive rule argued for a narrow reading of FCRA’s preemption clause, suggesting that states could regulate areas like medical debt, rental information, and arrest records unless those regulations directly conflicted with specific FCRA provisions. The CFPB now asserts that this interpretation was flawed, both legally and practically.

According to the Bureau, the language of the FCRA—particularly section 1681t(b)(1)—uses broad terms like “no requirement or prohibition” and “with respect to any subject matter regulated under,” which indicate Congress’s intent to occupy the field of consumer reporting. The phrase “relating to” further expands the scope, encompassing any state law connected to the topics covered by the FCRA.

Legal and Legislative Support

The CFPB’s position is supported by legislative history and judicial precedent. Congress explicitly aimed to create national standards to avoid a “patchwork system of conflicting regulations.” Courts have consistently interpreted the FCRA’s preemption clause broadly, finding that state laws addressing the same subject matter as federal provisions are preempted even if they don’t mirror the exact language of the FCRA.

Implications on Compliance

While the CFPB’s interpretive rule provides helpful guidance, it is important to note that interpretive rules are not binding on any court. Courts may choose not to adopt the CFPB’s interpretation, and legal challenges could arise depending on jurisdiction and context.

October 31st, 2025|Compliance Corner, FCRA|

The Scherzer Deal Report: October 20-24, 2025

Here is this week’s Deal Report for private equity and venture capital activity for US-based PE and VC firms and portfolio companies, brought to you by Scherzer International.

Sign up: Get private equity and venture capital deals delivered to your inbox every week!

Fundraising for PE & VC Funds

BoxGroup
$550M
Seventh flagship VC fund ($275M) and its fourth follow-on fund ($275M)

Burnt Island Ventures
$50M
Second fund

Diversis
$1.2B
Third fundHigh

Vista Strategies

$270M
14th VC fund

Private Equity Deals

Sixth Street
CR Fitness Holdings
Undisclosed amount
Brandon, FL-based Crunch Fitness franchisee

BDT & MSD Partners
Designs for Health
Undisclosed amount
Palm Coast, FL-based supplements maker

Mainsail Partners
FieldFlo
Undisclosed amount
Denver, CO-based provider of project and safety management software for subcontractors

SkyKnight Capital
Force Electrical Services
Undisclosed amount
San Francisco, CA-based electrical distribution and transmission infrastructure services firm

River Pines Capital Growth
Loop
Undisclosed amount
New York, NY-based marketing tech company

FFL Partners
Janus Rx
Undisclosed amount
Montgomery, AL-based long-term care pharmacy for patients with serious mental illnesses

6North Partners and Carlyle
NEP Group
Undisclosed amount
Pittsburgh, PA-based provider of media services for live sports and entertainment

Ministry of Environment of South Korea, IMM Investment, Woori Private Equity Asset Management, and AB CarVal
Peregrine Energy Solutions
Undisclosed amount
Boulder, CO-based utility-scale renewables and energy storage develope

Carrick Capital Partners
Veritas Prime
Undisclosed amount
Orlando, FL-based provider of SAP SuccessFactors and payroll tech solutions

Curewell Capital
Wilmington Pharmatech
Undisclosed amount
Christiana, DE-based drug manufacturer

Venture Capital Deals

Spark Capital, Sapphire Ventures, Khosla Ventures, Sequoia Capital, and Index Ventures
Anrok
$55M
San Francisco, CA-based sales tax compliance automation startup

Lowercarbon Capital, Voyager Ventures, Gigascale Capital, and Marathon Petroleum
Arbor Energy
$55M
El Segundo, CA-based power and carbon removal startup

General Catalyst
Chainguard
$280M
Kirkland, WA-based open source security startup

Two Bear Capital, Allegis Cyber, and Gula Tech Adventures
Conceal
$26M
Augusta, GA-based cybersecurity startup

Mainsail Partners
CourtReserve
$54M
St. Augustine, FL-based provider of tennis and pickleball club management software

Insight Partners, UpWest, and Resolute Ventures
Darwin AI
$15M
Chicago, IL-based AI adoption startup for government agencies

XYZ VC, The General Partnership, Bloomberg Beta and WndrCo.
Defakto
$31M
Palo Alto, CA-based startup that secures automated interactions

Nextech, EQT Life Sciences, Sanofi, HBM Healthcare Investments, and Mubadala
Electra Therapeutics
$183M
San Francisco, CA-based biotech focused on immunology and cancer

M13, Firstmark, and Operator Partners
Estuary
$17M
New York, NY-based enterprise data platform

Flagship Pioneering
Expedition Medicines
$50M

Cambridge, MA-based AI drug discovery startup using quantum covalent chemistry

Sequoia Capital and Kleiner Perkins
Fal.ai
$250M
San Francisco, CA-based provider of media AI models for developers

Two Bear Capital, Gula Tech Adventures, and Next Frontier Capital
Gravwell
$15.4M
Minneapolis, MN-based data analytics and security platform

Anthos Capital, Harmonic Growth Partners, and Across Capital
HiveWatch
$33M
El Segundo, CA-based provider of physical security software

Healthier Capital, Norwest, Define Ventures, Bon Secours Mercy Health, and ServiceNow Ventures
Hyro
$45M
New York, NY-based developer of call-center agents for health care

IVP, Sequoia Capital, Benchmark, CapitalG, and Sapphire Ventures
LangChain
$125M
San Francisco, CA-based agent engineering platform

GV, Coatue, Conviction Capital, and Thrive Capital
OpenEvidence
$210M
Cambridge, MA-based AI medical assistant for doctors

Eclipse and Nvidia
Redwood Materials
$350M
Carson City, NV-based battery recycling and grid storage firm

Insight Partners and JP Morgan
Roller
$50M
Austin, TX-based venue management platform

Caffeinated Capital, Convective Capital, First Round Capital, Transition VC, Advance Venture Partners, Nextview Ventures, Bullpen Capital, Stepstone Group, DCVC, Offline Ventures, Roar Capital, and Slow Ventures
Seneca
$60M
San Francisco, CA-based maker of firefighting drones

Redpoint Ventures, First Round, General Catalyst, Box Group, Bessemer Venture Partners, and Chemistry
Serval
$47M
San Francisco, CA-based IT service management platform

Sequoia Capital and Spark Capital
Sesame
$250M
New York, NY-based smart glasses and conversational AI startup

Avenir, Bain Capital Ventures, Bessemer Venture Partners, and Menlo Ventures
Shop My Shelf
$70M
New York, NY-based curated commerce infrastructure company

Craft Ventures
Starbridge
$42M
Rochester, NY-based govtech startup for business sales teams

CDP Venture Capital, TTV Capital, P101, Monte Carlo Capital, 3Lines VC, Azimut, and Evolution VC
Streetbeat
$15M
Palo Alto, CA-based developer of agents for wealth managers

Canaan Partners, Coatue, Square Peg Capital, Zetta Venture Partners, Bloomberg Beta, AIX Ventures, Marc Benioff, and Nat Friedman
Sumble
$38.5M
San Francisco, CA-based sales intelligence startup

Lightspeed, Matrix Partners, Founder Collective, and Nat Friedman
Suno
$125M
Cambridge, MA-based AI music generator

Greenoaks, Thrive Capital, Sequoia, Ribbit Capital, and SV Angel
Tempo
$500M
San Francisco, CA-based blockchain-based payments startup

Nvidia, AMD, Snowflake Ventures, Databricks Ventures, NEA, March Capital, BNF Capital, National Grid Partners, and Prosperity7
Uniphore
$260M
Palo Alto, CA-based AI business cloud provider

OpenAI Startup Fund, Lux Capital, and Founders Fund
Valthos
$30M
New York, NY-based biodefense startup

Adjuvant Capital and RA Capital Management
VitriVax
$17M
Boulder, CO-based vaccine formulation company

October 29th, 2025|Scherzer Deal Report|

California Consumer Privacy Act (CCPA) and Employment Background Screening

Key Points:

Limited Applicability Due to AB 25

Initially, the CCPA broadly defined “consumer” to include job applicants and employees. However, Assembly Bill 25 (AB 25) amended the CCPA to temporarily exclude personal information collected from job applicants, employees, and independent contractors from most CCPA provisions.

This exclusion was in effect until January 1, 2023, after which some CCPA rights were extended to employees and job applicants. As of now, employers must comply with the following CCPA provisions when using background screening services:

Notice at collection–employers must inform applicants about:
What personal data is being collected (e.g., criminal history, credit data, identifiers)
The purpose of data collection (e.g., hiring decisions)

Data security obligations:
Employers must implement reasonable security measures to protect personal data. If a breach occurs due to negligence, affected individuals may sue for statutory damages.

Overlap with Other Laws

Employers in California must also comply with:

Fair Credit Reporting Act (FCRA)
Investigative Consumer Reporting Agencies Act (ICRAA)
Consumer Credit Reporting Agencies Act (CCRAA)

These laws govern how background checks are conducted, what disclosures are required, and how adverse actions must be handled.

October 27th, 2025|Compliance Corner, Employment Decisions|

Takeaways for Employers from the Grijalva v. ADP Screening Decision

The Ninth Circuit’s August 2025 ruling in Grijalva v. ADP Screening clarified how exclusions from federally funded healthcare programs and similar long-term listings, such as sex offender registries, can be reported under the Fair Credit Reporting Act (FCRA).

Key Implications for Employers:

Ongoing exclusions are reportable. Even if the exclusion began over seven years ago, it’s considered a current status and can appear in a background report.
The reason for the exclusion may not be reportable. If the underlying cause (e.g., an administrative action) occurred more than seven years ago and isn’t a criminal conviction, Consumer Reporting Agencies (CRAs) generally cannot report it unless the candidate is expected to earn $75,000 or more annually.
Employers can ask candidates directly. If you need context behind an exclusion or listing, you’re free to ask the candidate. CRAs may be restricted from providing that information due to FCRA limitations.
Convictions are treated differently. Criminal convictions are reportable regardless of age under the FCRA, but several states impose their own time-based restrictions.

October 24th, 2025|Compliance Corner, Employment Decisions|

Pitfalls of Delegating the Employment Adverse Action Process to Consumer Reporting Agencies

In the complex landscape of employment background screening, compliance with the Fair Credit Reporting Act (FCRA) and state-specific laws is critical. One area that demands particular attention is the adverse action process, that is, the legal steps an employer must follow when deciding not to hire a candidate based on information in a background report. While some employers may be tempted to outsource this process to their consumer reporting agency (CRA), doing so can expose them to legal and regulatory risks.

The Employer’s Legal Responsibility Under the FCRA

The FCRA requires employers to follow a two-step process before taking adverse action:

Pre-Adverse Action Notice: Along with this notice, the employer must provide the candidate with a copy of their consumer report and a summary of rights under the FCRA.
Adverse Action Notice: After a reasonable waiting period–typically at least five business days, per Federal Trade Commission (FTC) guidance–the employer may send a final notice if they decide not to hire the candidate.

This process allows candidates to dispute inaccurate or incomplete information before a final decision is made.

Timing Matters: The Risk of Premature Decisions

The timing between the pre-adverse and adverse action notices is not explicitly defined in the FCRA, but courts and regulators have consistently held that five business days is the minimum acceptable waiting period. If a CRA sends both notices too close together or simultaneously, it undermines the candidate’s right to dispute the report and may be seen as a violation of the FCRA.

Who Is Making the Hiring Decision?

The most critical issue arises when a CRA appears to be making the hiring decision rather than the employer. If a CRA sends adverse action notices without the employer’s review or discretion, it could be construed that the CRA is deciding the candidate’s eligibility for employment. This is problematic because:

Only the employer can assess job-relatedness and business necessity.
CRAs are not equipped to perform individualized assessments, which are required under many state and local laws.

Fifteen states (California, Colorado, Connecticut, Hawaii, Illinois. Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, Vermont and Washington) have “Ban-the-Box” laws, several of which require employers to conduct individualized assessments before taking adverse action based on criminal history. Additionally, cities and counties like Los Angeles, New York City, and San Francisco have their own ordinances that include more stringent requirements for these assessments. These assessments typically involve evaluating the nature and gravity of the offense, its relevance to the job, and the time that has passed, and must be documented and provided to the applicant. They cannot be delegated to a CRA.

Legal Precedent: When a CRA Crosses the Line

While there is limited case law directly holding that a CRA made the decision instead of the employer, courts have scrutinized situations where employers failed to retain control over the adverse action process. In Goode v. LexisNexis Risk & Information Analytics Group, Inc., the court emphasized that employers must make the final employment decision and cannot rely solely on automated decision tools provided by CRAs.

Additionally, in Henderson v. CoreLogic, the court found that the CRA’s automated scoring system used to filter candidates could be interpreted as making employment decisions, raising serious FCRA compliance concerns.

These cases underscore the importance of employer discretion and the legal risks of outsourcing the hiring decision.

Conclusion

Delegating the adverse action process to a CRA may seem efficient, but it can lead to serious compliance failures. Employers must remain actively involved in evaluating background check results, conducting individualized assessments, and making final hiring decisions. The stakes are too high to outsource this critical function.

October 23rd, 2025|Compliance Corner, Employment Decisions|

The Scherzer Deal Report: October 13-17, 2025

Here is this week’s Deal Report for private equity and venture capital activity for US-based PE and VC firms and portfolio companies, brought to you by Scherzer International.

Sign up: Get private equity and venture capital deals delivered to your inbox every week!

Fundraising for PE & VC Funds

Ares Management
$5.3B
Third infrastructure secondaries fund

Ascenta Capital
$325M
Debut fund

Bain Capital
$14B
14th flagship PE fund

Brookfield
$20B
Second global energy transition fund

Carnelian Energy Capital Management
$600M
Canada focused fund

Crystal Venture Partners
$33M
Debut fund

Ecosystem Investment Partners
$400M
Fifth fund

Energy Impact Partners
$1.4B
Third flagship fund

Manulife Investment Management
$5.5B
Third infrastructure fund

Origin Ventures
$140M
Sixth fund

Simha Partners
$45M
Debut fund

Sugar Free Capital
$32M
Debut fund

TCG Crossover
$1.3B
Third fund

Private Equity Deals

Avance Investment Management
Barchemy
Undisclosed amount
Donora, PA-based maker of better-for-you chocolate and confectionery ingredients

Nautic Partners
Cenavera Nutrition
Undisclosed amount
Scottsdale, AZ-based food service provider for K-12 schools

Clearlake Capital Partners
Constant Contact
Undisclosed amount
Waltham, MA-based digital marketing and automation platform

Mainsail Partners
Flyntlok
Undisclosed amount
Juneau, AK-based heavy equipment dealer management system

GenNx360
Heartland Business Systems
Undisclosed amount
Little Chute, WI-based provider of IT services for commercial and public sector clients

Advent International and Corvex Private Equity
Heidrick & Struggles
Undisclosed amount
Chicago, IL-based executive search firm

Shofner Capital Partners
PtEverywhere
Undisclosed amount
Cary, NC-based practice management platform for cash-pay physical therapy clinics

TZP Group
True Lacrosse
Undisclosed amount
Lombard, IL-based youth lacrosse organization

Mountaingate Capital
Walker Sands
Undisclosed amount
Chicago, IL-based corporate communications firm

Venture Capital Deals

Avalon BioVentures, Correlation Ventures, and Alexandria Venture Investments
AeroRx Therapeutics
$21M
La Jolla, CA-based biotech focused on chronic respiratory diseases

NEA, Eli Lilly, Alexandria Venture Investments, Atlas Venture, Avidity Partners, F-Prime, GV, Mass General Brigham Ventures, and Perceptive Advisors
Affinia Therapeutics
$40M
Waltham, MA-based gene therapy startup focused on cardiovascular and neurological diseases

Prime Eight Capital, CR Biotech, HighLight Capital, HM Venture Partners, and ReliantTech
Arthrosi Therapeutics
$153M
San Diego, CA-based company treating gout and tophaceous gout patients

Addition, Trust Ventures, Valor Equity Partners, Thrive Capital, Lightspeed, Andreessen Horowitz, Altimeter, StepStone, Elad Gil, 137 Ventures, Terrain, Waybury, Ribbit, CapitalG, Spark, BOND, Lowercarbon, Avenir, Glade Brook, Positive Sum, and 1789
Base Power
$1B
Austin, TX-based home power backup company

Pantera Capital,LDA Capital, Borderless Capital, and Ajna Capital
Bee Maps
$32M
San Francisco, CA-based decentralized mapping startup

Pantera Capital, Coinbase Ventures, Reciprocal Ventures, and Jump Capital
Coinflow
$25M
Chicago, IL-based stablecoin payments startup

Bain Capital Ventures, Index, Elad Gil, Sequoia, Cooley LLP, and Patrick Collison
Crosby
$20M
New York, NY-based AI law firm

FTV Capital and Forerunner Ventures
Duos
$130M
Minneapolis, MN-based senior benefits company

Bessemer Venture Partners, B Capital, SignalFire, Lightspeed, HarbourVest, Adams Street, RELX, and Broadlight Capital
EvenUp
$150M
San Francisco, CA-based provider of AI solutions for personal injury law

A16z, Nexus Venture Partners, and YC
FurtherAI
$25M
San Francisco, CA-based insurance workflow startup

Point72, Goodwater Capital, Headline, Blackbird VC, LG Technology Ventures, and Alumni Ventures
Heidi Health
$65M
New York, NY-based medical scribe

Vinod Khosla, Khosla Ventures. Celesta Capital, Anthology Fund, and Carya Venture Partners
HiOctave
$15M
San Francisco, CA-based SMB customer service agent company

Sonder Capital, Senvest Management, and LB Investment
Jupiter Endovascular
$40M
Menlo Park, CA-based developer of endovascular procedures tech

Sequoia, Andreessen Horowitz, Paradigm, CapitalG, Coinbase Ventures, General Catalyst, and Spark Capital
Kalshi
$300M
New York, NY-based prediction markets

WestRiver Group
Lumen Bioscience
$30M
Seattle, WA-based biologic drugmaker

Haun Ventures, Bain Capital Cryptoled, Pantera Capital, Apollo, Northwestern Mutual Future Ventures, and Stillmark
Meanwhile
$82M
San Francisco, CA-based Bitcoin life insurer

Pangaea Ventures, PureTerra Ventures, Ecolab, W. L. Gore & Associates, The Lewis Family Office, Safar Partners, Lam Research, Indico Ventures, and Giantleap Capital
Membrion
$20M
Seattle, WA-based industrial wastewater treatment startup

The Column Group, DCVC Bio, Lux Capital, the Gates Foundation, and Alexandria Venture Investments
Nilo Therapeutics
$101M
New York, NY-based immune disease treatment developer

HighPost Capital
Northbeam
$15M
El Segundo, CA-based video marketing tech startup

FPV Ventures, McKesson Ventures, OSE, Black Opal, Tau, and Rogue VC
Oath Surgical
$24M
San Francisco, CA-based outpatient surgery clinic operator

Titanium Ventures, Google, and 2150
OpenSolar
$20M
San Francisco, CA-based provider of solar installer software

Index Ventures, Benchmark, Coatue, and Root Ventures
Quilter
$25M
Los Angeles, CA-based developer of autonomous PCB layout

Jump Capital, Glasswing Ventures, and Accomplice
Realm.Security
$15M
Boston, MA-based data security startup

Nvidia, Lightspeed Venture Partners, and Sequoia Capital

Reflection AI

$2B

Brooklyn, NY-based open-source AI model startup

DCVC, Blackbird, KdT Ventures, and Build Collective
Remedy Robotics
$35M
San Francisco, CA-based developer of robotic interventions for stroke and cardiovascular car

PeakSpan Capital
Routefusion
$26.5M
Austin-based embedded cross-border payments startup

Qumra Capital, Zeev Ventures, Insight Partners, Entrée Capital, Flint Capital, and Jibe Ventures
Sensi.AI
$45M
Palo Alto, CA-based caregiver insight platform

Bessemer Venture Partners, Arch Venture Partners, Vida Ventures, and Polaris Partners
Soufflé Therapeutics
$200M
Newton, MA-based RNA biotech

US Innovative Technology Fund
Stoke Space Technologies
$510M
Kent, WA-based reusable rocket maker

Spark Capital
Tigris
$25M
Sunnyvale, CA-basedprovider of localized data storage centers

Pantera Capital, Lightspeed, Alpha Edison, Motley Fool Ventures, California Innovation Fund, and Tomer London
TransCrypts
$15M
Newark, CA-based blockchain-based digital identity startup

Spice Expeditions, Autotech Ventures, FPV Ventures, Pelion Venture Partners, Mark Cuban, and Clocktower Technology Ventures
Yendo
$50M
Dallas, TX-based vehicle-secured credit card company

October 22nd, 2025|Scherzer Deal Report|

The Scherzer Deal Report: October 6-10, 2025