Deal
A term used to describe a specific investment opportunity in an asset, such as a portfolio company’s share offering or a real estate project. “Doing a deal” typically involves various steps, including due diligence, fundraising, and the formation of an SPV. Deals often utilize an SPV to pool investor capital in order to meet allocation […]
Debt (Liability, Financial Obligation)
An amount of money borrowed by one party from another, with the agreement to repay it at a later date, typically with interest. A convertible note is an example of a debt instrument. SPVs often invest in convertible notes or other debt instruments as the assets they acquire.
Delaware (State of Delaware)
Delaware is the most commonly selected jurisdiction for the formation of Special Purpose Vehicles (SPVs), primarily due to its well-established legal framework, particularly the Delaware Limited Liability Company Act (Delaware Act). The Delaware Act is widely regarded as the statute of choice for sophisticated ventures organized as LLCs, especially for deals involving parties from multiple […]
Discount
In finance, a discount refers to the condition where the price of a bond or security is lower than its par or face value. The discount is the difference between the price paid for the security and its par value. In the context of a convertible note, the discount refers to the percentage reduction applied […]
Distribution
A company’s payment of stock, cash or physical products (like crypto tokens) to its shareholders. For an SPV, a distribution is typically an allocation of capital gains and income from a portfolio company to its investors. SPVs will receive distributions from an asset, like a portfolio company investment and in turn make pro rata distributions […]
Doing Business
“Doing business” in a state is a legal term that refers to a business regularly carrying out its normal activities in a state that is different from its original registered jurisdiction, or having substantial contacts there. It’s also defined as having a presence in a state for legal and tax purposes. SPVs are considered businesses […]
DPA (Debt Payable by Assets)
DPA is a debt security, specifically for crypto token-presales to both accredited and unaccredited investors.