SPV Dictionary

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Accredited Investor

An accredited investor is an individual or entity that meets specific financial criteria, enabling them to bear the economic risks associated with investing in unregistered securities. These investors are permitted to participate in exempt offerings, such as those involving private companies or funds (e.g., hedge funds, venture capital funds, or special purpose vehicles (SPVs)), which […]

ACH

ACH refers to a network that facilitates electronic money transfers between financial institutions, such as banks and credit unions. In the context of Special Purpose Vehicles (SPVs), ACH is commonly used by investors to transfer investment funds to the SPV. While ACH transfers typically take around three business days to process, they are characterized by […]

Acquisition

A corporate action in which one company purchases a majority or all of the ownership interests in another company to gain control of that company. Acquisitions are typically pursued as part of a growth strategy, where acquiring an established company is considered more advantageous than expanding independently. Payment for acquisitions may be made in cash, […]

Administrative Manager

Administrative Manager is a person or entity designated to handle specific administrative tasks for a Special Purpose Vehicle (SPV), typically including duties such as setting up and managing a bank account. An SPV administrator can act as an administrative manager of SPVs where the Organizer elects or is required to retain managerial authority.

Administrator

A company or individual engaged by an SPV to perform designated back-office support functions for the entity.

Allocation

The portion of funds designated to a specific investor or Special Purpose Vehicle (SPV) for investment in a private asset. An allocation typically represents a subset of a larger total amount. For example, SPV 1 received an allocation of $1 million from the company’s $10 million fundraising.

AML (Anti-Money Laundering)

A set of laws, regulations, and procedures aimed at preventing the generation of income through illegal activities. Financial institutions are required to implement policies and conduct due diligence to verify the source of a customer’s wealth and funds, and to assess and manage the risk of being involved in money laundering.

Angel (Angel Investor)

An individual or entity that invests funds in early-stage startups or entrepreneurs, typically in exchange for equity ownership. Angel investors may invest independently or collectively through an SPV (Special Purpose Vehicle), where multiple investors pool their resources for a larger investment. While angel investors can include family members and friends, they are more commonly high-net-worth […]

Arbitration

A method of resolving legal disputes outside of the court system, where an impartial third party, known as an arbitrator, reviews the case and makes a binding decision. In the context of an SPV, arbitration is used as an alternative to litigation for settling disagreements.

Arbitration Location

The designated place where arbitration proceedings will take place in the event of a dispute involving the SPV. The location must be within the United States; it is recommended that the location be in Delaware, or the same city and state that the Organizer resides.

Asset

Any item or resource with monetary value. In the context of private equity financing, an asset typically refers to a financial asset, representing an investment in the securities or assets of other entities. SPVs generally hold ownership interests or rights to ownership in various types of assets, including startup companies, real estate, investment funds, crypto-assets, […]

Asset Class

A distinct category of assets within a single legal structure, where investor funds are allocated to a specific asset rather than pooled across multiple assets. Each asset class represents separate legal rights associated with a particular asset. Examples of asset classes include startup companies, secondaries, real estate, royalties, and collectibles.