Investment Portfolio
The name of the Company(ies) or asset(s) that an SPV acquired or invested into.
Investment Round (Securities Offering)
When a company, project, SPV or fund raises capital selling a distinct asset during a specific period of time. For example, a company raises capital during a six month period selling a Series A preferred stock. This Series A preferred stock raise would be considered an investment round. A subsequent investment round by the same […]
Investor (LP, limited partner)
An investor is any person or entity who commits capital with the expectation of financial returns. Investors participate in a variety of investment vehicles including, but not limited to, SPVs, funds, stocks, bonds, commodities, mutual funds, and real estate. Investors typically perform technical and/or fundamental analysis to determine favorable investment opportunities, and generally prefer to […]
IRA (Individual Retirement Account)
A tax advantageous investing tool individuals use to earn and earmark funds for retirement savings. There are several types of IRAs including: traditional IRAs, Roth IRAs, Simple IRAs, and SEP IRAs. SPVs can accommodate IRA investments up to 25% of a fund’s total capital contributions due to ERISA fiduciary and IRS prohibited transaction requirements. Only […]
Issuer
An issuer is a legal entity that develops, registers and sells securities to finance its operations. An SPV Organizer is an issuer. SPVs issue LLC or LP Membership Interests inviting investors to fund the SPVs purpose of purchasing a private asset. Start up companies are also issuers, along with large corporations and governments. Read more: […]
ITIN (Individual Taxpayer Identification Number)
An ITIN, or Individual Taxpayer Identification Number, is a tax processing number only available for certain nonresident and resident aliens, their spouses, and dependents who cannot get a Social Security Number (SSN). It is a 9-digit number, beginning with the number “9”, formatted like an SSN (NNN-NN-NNNN). To obtain an ITIN, you must complete IRS […]
K-1
A tax document generated by a form 1065, issued by a partnership (LLC or LP) entity to another entity or individual which reports the income, losses, and dividends of a business that is allocated to each partner of a partnership. Each partner is required to report the information in the K-1 in their personal income […]
KISS
A KISS is a “Keep It Simple Security”. It is an agreement between a company and an investor: the investor invests money in the company and, in exchange, receives the right to purchase shares in a future equity round when it occurs. KISS securities are a hybrid between debt and equity: it aims to keep […]
KYC (Know Your Customer)
A set of policies and procedures SPV organizers and financial institutions use to verify the identity of an investor. It is a requirement to know and keep records on the essential facts of each investor, as well as identify each person who has authority to act on the customer’s behalf. SPV Organizers are only required […]
Lead (Lead Investor)
Is an investor who will put up a substantial amount of the total investment – often around 20% – usually early in the fund raising process. Leading an investment round can result in improved economic terms.
Ledger
A listing of investors at a specific point in time invested in an SPV. The ledger should include the investor’s name, amount invested, date of investment, tax identification information and contact information. Not to be confused with a general ledger which is a ledger of various asset, liabilities, equity, income and expense accounts which are […]
Limited Partner (LP)
A non-managing owner of a Limited Partnership structure, whose liability is limited to the amount of its investment. A limited partner is the technical name for investors or members of a LP or limited partnership structure. LP is also a general term (umbrella term) for investors in an investment fund or structured vehicle. SPV investors […]
Limited Partnership (LP)
See Regular LLC/LP
Liquidation Preferences
Liquidation preference establishes that certain investors receive their investment money back first before other investors and/or company owners in the event the company is sold, has a public offering, pays dividends, or has another liquidation (payout) event.
Liquidity event
A distribution event that results from either the sale of an investment portfolio company or some of its assets or another type of event which results in cash, equity or tokens (cryptocurrency) being distributed to the SPV. Subsequent to an SPV receiving the cash, equity or tokens, oftentimes, the SPV Organizer will distribute to the […]