Membership Transfer
Oftentimes an investor needs to change the entity that invested in the SPV. For example, an investor might use an LLC to make an investment and then years later set up a trust that will hold all of the investor’s assets, including the investment they made into the SPV. The investor will ask the Organizer […]
Merger
A merger is a deal to unite two existing companies into one new company. There are several types of mergers and also several reasons why companies complete mergers. Most mergers unite two existing companies into one newly named company. Mergers and acquisitions are commonly interchangeable terms. SPVs that own shares in a company that merges […]
MFN (Most Favored Nation)
In a contract, a most favored nation clause indicates that one party has the right to the best pricing or terms for similar types of transactions. SPV Organizers might use a MFN clause when negotiating an investment into an asset. Or an SPV Organizer might agree to an MFN clause with an investor who wishes […]
Multi-Asset
The same legal entity (SPV) investing in more than one asset. Typically an SPV invests into one asset but sometimes an Organizer will use one SPV and invest into two or more assets. A multi-asset SPV can function more as a venture fund than an SPV.
NASAA (North American Securities Administrators Association)
The association representing the state and provincial securities regulators responsible for administering and enforcing “blue-sky” laws that apply to SPV-based securities offerings. NASAA coordinates regulatory standards, model rules, and multi-state enforcement actions that directly affect SPVs raising capital from retail or geographically dispersed investors. In practice, NASAA establishes the regulatory environment SPV managers must navigate […]
New Round
Is another round of business financing by SPV Organizers, private equity investors or venture capitalists, for a company to raise capital. See Investment Round.
Non Accredited Investor
A non-accredited investor is an investor who fails to meet the net worth or income requirements defined by the Securities and Exchange Commission (SEC). Non-accredited investors are sometimes referred to as retail investors. The concept of a non-accredited investor comes from the various SEC acts and regulations that refer to accredited investors. An SPV Organizer […]
OA (Operating Agreement)
LLC Operating Agreement is a document that customizes the terms of a Limited Liability Company (LLC) according to the specific needs of the owners and outlines the financial and functional decision-making in a structured manner. An Operating Agreement is a crucial document that should be included when setting up an SPV. The document, once signed […]
OFAC (Office of Foreign Control)
Office of Foreign Assets Control is a financial intelligence and enforcement agency of the United States Treasury Department. It administers and enforces economic and trade sanctions in support of the United States national security and foreign policy objectives. The OFAC sanctions list is designed to facilitate the use of the specially designated nationals and blocked […]
Opportunity
When an SPV Organizer has concluded that a particular deal or asset is of a certain quality they share that deal or asset with their network of investors as an “opportunity”. An opportunity is the chance for an investor to subscribe to an SPVs offering of investing into a private asset.
Organizer
An individual, entity, syndicator, angel group, fund or venture capitalist who organizes SPVs and raises funds by reaching out to their network of accredited investors to invest in private assets.
Oversubscribed
Oversubscribed is a situation in which an asset, like a startup company or real estate project, has more investment interest than allocation available. For example, a start up company is raising $1 million in new capital and the SPV Organizers and venture capitalist offer $3 million in capital. This means this startup company is oversubscribed […]
Ownership Class
Different types of stock– Series A stock holders own a different ownership class than Series B stockholders, Common stockholders own a different share class than the series A or B investors, etc.
PCA (Post Close Activity)
A post-closing activity (PCA) is any event that requires active administration of the SPV by the investment portfolio, the Organizer, or the investors in the fund. There are two categories of SPVs PCA, administration of the SPV and the SPV acting in its role as an investor in an asset. Types of administration of the […]
PE (Private Equity)
Private equity is equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. Capital for private equity is raised from retail and institutional investors, and can be […]