Purchase Agreement (PA)
A sales and purchase agreement (PA) is a legal contract that obligates a buyer to buy and a seller to sell a product or service. An PA serves as a basis for a transaction to take place, providing a framework of how the transaction will proceed, what is included in the transaction, and, if necessary, […]
Purchase Amount
Amount paid for an asset. The final amount sent from the SPV to the company or sponsor in exchange for the asset. The purchase amount should be stated in the purchase agreement.
Qualified Clients
A qualified client is a person that meets certain thresholds set by the SEC, which for individuals are currently at least $1.1. million in assets under management with the applicable investment advisor or a net worth of at least $2.2 million.
Qualified Purchaser
A qualified purchaser is a type of investor (other types are accredited investor and qualified clients) who can participate in certain alternative asset vehicles, such as 3(c)(7) funds. This standard gives SPV Organizers more flexibility in terms of the number of participants that can subscribe than the type of vehicles available for accredited investors (3(c)(1) […]
Qualifying Venture Capital Fund
Qualifying venture capital funds are a subset of all venture capital funds defined in the venture capital fund adviser exemption. Generally, structured vehicles that rely on Regulation D are limited to 100 investors. However, Qualifying Venture Capital Funds that meet the definition a “venture capital fund” stipulated by the Investment Advisers Act of 1940 can […]
Reg A (Regulation A or Title IV of the JOBS Act or Reg A+)
An exemption from registration for public offerings. Regulation A provides two offering tiers: Tier 1, for offerings of up to $20 million in a 12-month period; and Tier 2, for offerings of up to $50 million in a 12-month period. For offerings of up to $20 million, companies can elect to proceed under the requirements […]
Reg CF (Regulation Crowdfunding or Title III of the Jobs Act)
Regulation Crowdfunding (CF) provides an exemption from the registration requirements for securities-based crowdfunding allowing companies to offer and sell up to $5 million of their securities without having to register the offering with the SEC. With Regulation CF, non accredited investors now have the opportunity to participate in the early capital raising activities of start-up […]
Registered Agent
Also known as a resident agent or statutory agent, a registered agent is a business or individual designated to receive service of process when a business entity is a party in a legal action such as a lawsuit or summons. An SPV will typically have to engage a registered agent. Depending on the structure the […]
Regular LLC/LP (Traditional LLC/LP)
Before the Master Series LLC/LP structure was codified there was only LLC or LP. Now, because the Master Series structure can cause confusion, we need to distinguish between the two and the typical words to describe the original LLC/LP structure is “regular” or “traditional” (or the “OG!”). A regular LLC/LP structure typically requires a filing […]
Responsible Party
This term can be found in various IRS tax forms to apply for the person who will control the entity and its assets; typically the Organizer and/or the investment advisor.
SAFE (Simple Agreement for Future Equity)
An agreement between an investor and a company that provides rights to the investor for future equity, except without determining a specific price per share at the time of the initial investment. The SAFE investor receives the futures shares when a priced round of investment or liquidation event occurs. SAFEs are intended to provide a […]
SAFE-T (Simple Agreement for Future Equity or Tokens)
A SAFE-T is an agreement between an investor and a company that provides rights to the investor for when a cryptocurrency or other product is created, the investor will be given access to the newly created cryptocurrency or equity, except without determining a specific price at the time of the initial investment. SAFE-Ts are intended […]
SAFT (Simple Agreement for Future Tokens)
A SAFT is an agreement between an investor and a company that provides rights to the investor for when a cryptocurrency or other product is created, the investor will be given access, except without determining a specific price at the time of the initial investment. SAFTs are intended to provide a simple mechanism for startups […]
Secondary Sale
A secondary sale is the sale by an existing stockholder of shares in a private company to a third party that does not occur in connection with an acquisition of the company. Secondary sales differ from primary sales because in primary sales, the company sells stock to its investors and keeps the money. In secondary […]
Security Filings
Referring to the Federal Form D and Blue Sky filings.