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 […]
LLC (limited liability company)
See Master LLC, Regular LLC/LP, and Series LLC
LLC-12
California Statement of Information form required for every California and registered foreign LLC within 90 days of registration and every two years thereafter.
Major Investor
A term used to describe investors that contribute large amounts to an investment round. The required minimum amount for an investor to be considered a major investor is specifically stated in the purchase agreement. Major Investors receive rights and benefits that non-major investors (smaller investors) do not receive. Some examples of major investor benefits are […]
Management Fee
A fee paid to SPV Organizers for their time and effort in managing the investment relationship between the SPV and the investment portfolio. Some of the activities an Organizer may engage in are tracking the progress of the asset, reviewing investment portfolio reports and materials, administration tasks of the SPV like post close activities and […]
Manager
An individual or entity that is responsible for the SPV entity (LLC or LP). A common term for Manager is GP because in the LP/GP structure the GP is the manager of the LP structure. When an LLC structure is used an LLC can be managed by a “Manager” or by its members and SPVs […]
Master LLC
Master LLC is the entity registered with the state of Delaware or another state that recognizes series. Part of the series LLC structure (see series LLC definition). It is required to have a Master LLC registered with Delaware before creating any Series LLCs associated with it. The Master LLC is like a parent, or “mothership” […]
Maturity Date
Maturity date is the date on which the principal amount of a note, draft, acceptance bond or another debt instrument becomes due and is repaid to the investor and interest payments stop. It is also the termination or due date on which an installment loan must be paid in full. Maturity dates can be extended. […]
Membership Class
Stockholders owning different shares in different companies or assets within the same SPV. Treatment of the investors within the SPV is different because each investor, or portion of investors, owns a different asset or assets from the other SPV investors. Investors are defined as Members of the SPV. Membership classes are a complex accounting puzzle […]
Membership Interest (Membership units, member)
A membership interest is an investor’s ownership stake in an LLC (not an LP). Each investor in an LLC is called a “member.” A person who holds a membership interest has a profit and voting interest in the LLC. Ownership in an LLC can be expressed by percentage ownership interest or membership units. A membership […]
Membership Sale
Sometimes investors wish to sell their SPV membership interest to a third party for more or less (usually more) than the amount they originally contributed when they invested into the SPV. It is advised to consult legal counsel and the SPV fund documents in these matters. A membership sale requires legal documentation and cap table […]