Valuation
Valuation is the process of determining the current worth of an asset or a company. There are many techniques used to determine value. The market value of a security is determined by what a buyer is willing to pay a seller, assuming both parties enter the transaction willingly. SPVs are used to invest into private […]
Valuation Cap
A “valuation cap” entitles note holders to convert the outstanding balance on the note into shares of stock at the lower of (i) the valuation cap or (ii) the price per share in a qualified financing. Valuation cap’s are used in cases of a convertible debt and SAFE rounds that allows Investors to invest into […]
VC (Venture Capital or Venture Capitalist)
Venture capital is financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. For startups without access to capital markets, venture capital is an essential source of money. Risk is typically high for investors, but the downside for the startup is that these venture capitalists usually get […]
VC Fund (Venture Capital Fund)
An investment fund that manages the money of investors who seek private equity interest in startup and small-to medium-sized enterprises with strong growth potential. Investment is used specifically to fund growth in the Series A round of funding. Venture capital funds use a structured vehicle structure very similar to an SPV. In fact, an SPV […]
Venture Capital Fund (ERA)
For ERA (and other) regulatory purposes, the SEC has defined a Venture Capital Fund as: A private fund that meets the following qualifications: Pursues a venture capital strategy; Fund has no more than 20% of the fund’s total assets (including committed but not yet invested capital) in assets that are not “qualifying investments” or “short […]
Venture Capital Fund Exemption
The venture capital fund adviser exemption allows advisers to venture capital funds to avoid certain regulations under the Investment Advisers Act. A venture capital fund is a private fund that pursues a venture capital strategy, holds no more than 20% of assets in non-qualifying investments, does not borrow or incur leverage and does not grant […]