SPV Dictionary

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Fully Diluted Basis

Ownership based on the assumption that all options, warrants or other convertible securities or instruments or other rights to acquire stock have been exercised or converted. Read more: https://www.investopedia.com/terms/f/fullydilutedshares.asp

Fund (Capital, Investment)

A fund is a generic term to describe a structured vehicle  which has the main purpose of aggregating capital from a number of different investors in order to invest into private assets. An SPV is considered a fund, a venture capital fund is considered a fund, as is a private equity fund, hedge fund and […]

Fund Close (Close)

A “Close” is triggered upon one of the following events: (1) the fund docs are countersigned by the fund manager, (2) Funds are wired to the company (investors’ funds are used), or (3) the fund manager signs investment docs. The definition of a close is important because a close triggers the federal and state filing […]

Fund Docs (Fund Documents)

Legal documents govern how this entity (SPV) behaves, and the rights and rules of those members that belong to it.  SPV documents include an Operating Agreement, Private Placement Memorandum and Subscription Agreement. Operating Agreement governs the relationship between all of the investors and managers of the SPV.  Subscription Agreement covers the committing of capital to […]

Fund of Funds (FOF)

A fund of funds is an investment strategy in which a fund invests in other types of funds rather than investing directly in stocks, bonds, or other securities.

GP (General Partner)

A GP or General Partner is a legal entity or structure which is needed to be the owner of a limited partnership (LP).  A unique characteristic of a GP structure is its unlimited liability.  GPs typically act as the manager of the partnership. GP is also a general term for the individual or entity that […]

Grantor of a Trust

The person who creates the trust. The assets in the trust are supplied by the grantor. Read more: https://www.investopedia.com/terms/g/grantor.asp

Hedge Fund

A hedge fund is an investment fund that contains capital contributions from accredited individuals or institutional investors and invests in a variety of assets, often with complex portfolio-construction and risk- management techniques.  Hedge funds are almost always open-ended and allow contributions or withdrawals by the investors at set times. Read more: https://www.investopedia.com/terms/h/hedgefund.asp

Holdbacks

When a company is acquired, oftentimes the acquiring company requires that not all funds are immediately distributed to the owners/shareholders of the acquired company. The acquirer may holdback funds to cover unknown or known expenses and legal contingencies to be discovered or resolved in the near term.  The company will typically set a timeframe for […]

Investment

Term used to describe an investor’s completed subscription to an SPVs offering.

Investment Advisers Act of 1940

The Investment Advisers Act of 1940 defines the responsibilities and duties of investment advisers. It falls under U.S Federal Law, which states who is eligible to register with the Securities and Exchange Commission (SEC) to become an adviser under the supervision and control of the Act to protect investors. The Investment Advisers Act of 1940 […]

Investment Advisor

An investment adviser is an individual or a firm that is in the business of giving advice about securities to clients. For instance, individuals or firms that receive compensation for giving advice on investing in stocks, bonds, mutual funds, or exchange traded funds are investment advisers. Some investment advisers manage portfolios of securities. Depending on […]

Investment Amount

Total amount purchased of a private asset. Investment amount can describe the amount an SPV purchased of a company or project offering or the amount an investor subscribed to purchase of the SPV offering.

Investment Company

Investment companies are business entities, both privately and publicly owned, that manage, sell and market funds to the public. An investment company can be a corporation, partnership, business trust or limited liability company (LLC) that pools money from investors on a collective basis. The money pooled is invested, and the investors share any profits and […]

Investment Company Act of 1940

The Investment Company Act of 1940 is a law that Congress passed to define and regulate mutual funds and closed-end funds, as well as hedge funds, private equity funds, SPVs, and holding companies. Enforced by the Investment Management division at the SEC, a primary purpose of the Act is to protect investors by ensuring that […]