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# SPV Dictionary

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## Dictionary

- [NASAA (North American Securities Administrators Association)](https://spvdictionary.com/dictionary/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
- [SPV One](https://spvdictionary.com/dictionary/spv-one/) - A single-member Special Purpose Vehicle (also called a “Fund-of-One SPV” or “Single-Investor SPV”) formed by one individual, family office, or institution for the sole purpose of making and holding a single private investment — with the primary goal of maximizing future transferability and liquidity. Key characteristics Exactly one economic owner (100 % membership interest) Appears
- [SPV Lite](https://spvdictionary.com/dictionary/spv-lite/) - A lightweight Special Purpose Vehicle (typically a Delaware LLC) that is formed and fully operational before any capital is raised or contributed. Unlike a traditional SPV, an SPV Lite is created with zero or nominal initial funding, no bank account requirement, and no immediate securities filings or tax returns. It is designed to onboard contributors
- [Regulation D (Reg D)](https://spvdictionary.com/dictionary/regulation-d-reg-d/) - Regulation D is the primary SEC exemption that allows SPVs to raise capital from investors without registering their securities with the SEC, provided they meet specific disclosure, investor qualification, and offering limitations. Under Rules 506(b) and 506(c), SPVs can privately issue interests—such as membership units, partnership interests, or notes—to accredited investors while maintaining streamlined compliance
- [CCC (CIK Confirmation Code)](https://spvdictionary.com/dictionary/ccc-cik-confirmation-code/) - The CCC is a confidential SEC authentication code used to authorize filings in the EDGAR system. While the CIK serves as the public identifier, the CCC functions like a secure password that allows an SPV or its authorized agent to submit filings, including Form D. Protecting the CCC is critical, as it enables legally binding
- [CIK Code](https://spvdictionary.com/dictionary/cik-code/) - A Central Index Key (CIK) is the unique identifier assigned by the SEC to an entity— including SPVs— when a Form ID is approved in EDGAR. The CIK code is required to submit federal securities filings such as Form D and to complete related compliance steps, including certain state Blue Sky notice filings. It functions
- [EDGAR (SEC Filing System)](https://spvdictionary.com/dictionary/edgar-sec-filing-system/) - EDGAR is the U.S. Securities and Exchange Commission’s online system for submitting and publicly accessing required filings. For SPVs, EDGAR is where organizers file a Form ID to obtain a CIK and CCC code, enabling future submissions. Once credentials are issued, EDGAR is used to file a Form D and other required disclosures tied to
- [SEC (Security Exchange Commission)](https://spvdictionary.com/dictionary/sec-security-exchange-commission/) - The U.S. regulator that oversees SPVs only when they engage in securities activities. The SEC governs how SPVs raise capital, whether offerings must be registered or qualify for exemptions (e.g., Reg D, Reg S), and what disclosures sponsors must provide about structure, risks, and conflicts. For securitization SPVs, it enforces Reg AB II reporting and
- [SPV Concierge](https://spvdictionary.com/dictionary/spv-concierge/) - SPV Concierge is a customizable, comprehensive, high-touch, rapid-response expert SPV service. www.spvconcierge.com
- [Sally SPV Software](https://spvdictionary.com/dictionary/sally-spv-software/) - #Sally is the only all-in-one automated SPV platform for launching and administering structured vehicles. It provides users with a white-labeled self-governing SPV engine to affordably run deals. With Sally, users can use their brand and URL to present an SPV engine to their network while customizing their SPV structure, documents, jurisdictions, and process – not
- [Dossier](https://spvdictionary.com/dictionary/dossier/) - A collection of papers containing information on a particular subject or person.
- [KYC (Know Your Customer)](https://spvdictionary.com/dictionary/kyc-know-your-customer/) - A set of policies and procedures implemented by SPV organizers and financial institutions to verify the identity of investors. KYC requires the collection and maintenance of essential information about each investor, including the identification of individuals with authority to act on the investor's behalf. SPV organizers must identify owners with 25% or more beneficial ownership
- [KISS](https://spvdictionary.com/dictionary/kiss/) - A KISS is a financial instrument between a company and an investor, where the investor provides capital in exchange for the right to purchase shares in a future equity financing round. It is a hybrid security, combining features of both debt and equity. While similar to a SAFE (Simple Agreement for Future Equity), a KISS
- [K-1](https://spvdictionary.com/dictionary/k-1/) - A tax document generated by Form 1065, issued by a partnership (LLC or LP) to report the income, losses, and dividends allocated to each partner. The recipient is required to include the information from the K-1 on their personal income tax return. SPVs, as partnerships, are required to file Form 1065 with the IRS annually
- [ITIN (Individual Taxpayer Identification Number)](https://spvdictionary.com/dictionary/itin-individual-taxpayer-identification-number/) - An ITIN is a 9-digit tax processing number issued to certain nonresident and resident aliens, their spouses, and dependents who are ineligible for a Social Security Number (SSN). It is formatted like an SSN (NNN-NN-NNNN), starting with the number "9." To obtain an ITIN, individuals must complete IRS Form W-7, which requires documentation verifying foreign/alien
- [Issuer](https://spvdictionary.com/dictionary/issuer/) - An issuer is a legal entity that creates, registers, and sells securities to raise capital for its operations. An SPV organizer is considered an issuer. SPVs issue LLC or LP membership interests to invite investors to fund the SPV's purpose, such as acquiring a private asset. Issuers can include startup companies, large corporations, and governments.
- [IRA (Individual Retirement Account)](https://spvdictionary.com/dictionary/ira-individual-retirement-account/) - A tax-advantaged investment account that individuals use to save for retirement. IRAs come in various types, including traditional IRAs, Roth IRAs, Simple IRAs, and SEP IRAs. SPVs may accept IRA investments, up to 25% of a fund’s total capital contributions, in accordance with ERISA fiduciary and IRS prohibited transaction rules. Only self-directed IRAs are eligible
- [Investor (LP, limited partner)](https://spvdictionary.com/dictionary/investor-lp-limited-partner/) - An investor is an individual or entity that allocates capital with the expectation of generating financial returns. Investors engage in various investment vehicles, such as SPVs, funds, stocks, bonds, commodities, mutual funds, and real estate. They typically conduct technical and/or fundamental analysis to identify favorable investment opportunities and seek to balance risk and return. An
- [Investment Round (Securities Offering)](https://spvdictionary.com/dictionary/investment-round-securities-offering/) - A capital-raising event in which a company, project, SPV, or fund sells a distinct asset over a specific period. For example, a company may raise capital over a six-month period by selling Series A preferred stock (investment round), which would constitute an investment round. A subsequent investment round may occur 18 months later, with the
- [Investment Portfolio](https://spvdictionary.com/dictionary/investment-portfolio/) - The collection of companies or assets that an SPV has acquired or invested in.
- [Investment Company](https://spvdictionary.com/dictionary/investment-company/) - A business entity, either privately or publicly owned, that manages, sells, and markets investment funds to the public. Investment companies can take the form of corporations, partnerships, business trusts, or limited liability companies (LLCs) that pool capital from investors. The pooled funds are invested, and investors share in the profits and losses in proportion to
- [Investment Company Act of 1940](https://spvdictionary.com/dictionary/investment-company-act-of-1940/) - Investment Company Act of 1940: A U.S. federal law enacted by Congress to regulate mutual funds, closed-end funds, hedge funds, private equity funds, SPVs, and holding companies. Administered by the Investment Management division of the SEC, the Act aims to protect investors by ensuring transparency regarding the risks of purchasing and owning securities.
- [Investment Amount](https://spvdictionary.com/dictionary/investment-amount/) - The total amount allocated for the purchase of a private asset. This term can refer to the amount an SPV invests in a company or project offering, or the amount an investor subscribes to in an SPV offering.
- [Investment Advisers Act of 1940](https://spvdictionary.com/dictionary/investment-advisers-act-of-1940/) - A U.S. federal law that establishes the duties and responsibilities of investment advisers. The Act defines the criteria for eligibility to register with the Securities and Exchange Commission (SEC) and outlines the requirements for advisers to operate under SEC oversight, ensuring the protection of investors. The Act mandates that individuals or firms providing investment advisory
- [Investment](https://spvdictionary.com/dictionary/investment/) - The term used to describe an investor's completed subscription to an SPV's offering.
- [Investment Advisor](https://spvdictionary.com/dictionary/investment-advisor/) - An individual or firm engaged in providing advice regarding securities to clients, including recommendations on private assets, stocks, bonds, mutual funds, or exchange-traded funds. SPV Organizers provide investment advice by organizing and managing an SPV. Depending on the size of assets under management, investment advisers must register with either the U.S. Securities and Exchange Commission
- [Holdbacks](https://spvdictionary.com/dictionary/holdbacks/) - A portion of the purchase price in an acquisition that is withheld by the acquiring company. These funds are held to cover potential or known expenses, liabilities, or legal contingencies that may arise post-acquisition. The acquiring company typically sets a defined period for these issues to be resolved, after which the remaining holdback funds are
- [Hedge Fund](https://spvdictionary.com/dictionary/hedge-fund/) - Hedge Fund: An investment fund that pools capital from accredited individuals or institutional investors to invest in a diverse range of assets. Hedge funds typically employ advanced portfolio construction and risk management strategies. They are generally open-ended, permitting contributions and withdrawals by investors at specified intervals. Read more: https://www.investopedia.com/terms/h/hedgefund.asp
- [Grantor of a Trust](https://spvdictionary.com/dictionary/grantor-of-a-trust/) - The Grantor of a trust is the individual who creates the trust and contributes the assets held within it. Read more: https://www.investopedia.com/terms/g/grantor.asp
- [GP (General Partner)](https://spvdictionary.com/dictionary/gp-general-partner/) - A General Partner (GP) is a legal entity or structure that serves as the owner and manager of a limited partnership (LP). A key characteristic of a GP is its unlimited liability. GPs are typically responsible for managing the partnership’s operations. The term "GP" is also used to refer to the individual or entity that
- [Fund of Funds (FOF)](https://spvdictionary.com/dictionary/fund-of-funds-fof/) - A fund of funds is an investment strategy where a fund invests in other funds rather than directly in stocks, bonds, or other securities.
- [Fund Docs (Fund Documents)](https://spvdictionary.com/dictionary/fund-docs-fund-documents/) - Fund documents are legal agreements that define the operations of an SPV and establish the rights and responsibilities of its members. SPV documents include the Operating Agreement, Private Placement Memorandum (PPM), and Subscription Agreement. The Operating Agreement outlines the relationship between the investors and managers of the SPV. The Subscription Agreement details the terms under
- [Fund Close (Close)](https://spvdictionary.com/dictionary/fund-close-close/) - A "Close" is triggered by one of the following events: (1) the countersignature of the fund documents by the fund manager, (2) the transfer of funds to the company (i.e., when investors' funds are wired), or (3) the signing of investment documents by the fund manager. The close is significant as it activates federal and
- [Fund (Capital, Investment)](https://spvdictionary.com/dictionary/fund-capital-investment/) - A fund is a structured vehicle designed to pool capital from multiple investors for the purpose of investing in private assets. This term encompasses various types of investment vehicles, including Special Purpose Vehicles (SPVs), venture capital funds, private equity funds, hedge funds, and others. Read more: https://www.investopedia.com/terms/i/investment-fund.asp
- [Fully Diluted Basis](https://spvdictionary.com/dictionary/fully-diluted-basis/) - Ownership on a fully diluted basis refers to the calculation of ownership assuming that all options, warrants, convertible securities, or other rights to acquire stock have been exercised or converted. Read more: https://www.investopedia.com/terms/f/fullydilutedshares.asp
- [Foreign LLC](https://spvdictionary.com/dictionary/foreign-llc/) - A Foreign LLC refers to an LLC that is registered in a state different from the state where it is "doing business." While most SPVs are initially registered in states such as Delaware, which offer favorable tax or fee benefits, an SPV may need to register as a Foreign LLC in the state where the
- [Formation Date](https://spvdictionary.com/dictionary/formation-date/) - The Formation Date refers to the date of creation of an entity (SPV) as recorded with the jurisdiction where it is filed. For Master and Regular/Traditional SPVs, this is the official date of establishment. For Series SPVs, the Formation Date is either the date a deal is initiated or, at the latest, the date the
- [Form ID](https://spvdictionary.com/dictionary/form-id/) - SPVs are required to file a Form D with the SEC through the SEC’s EDGAR online system. In order to gain access to the EDGAR system, a CIK number and other access codes must be obtained, and an SPV Organizer obtains a CIK number and other access codes by filing a Form ID with the
- [Form D (Notice of Sale of Securities)](https://spvdictionary.com/dictionary/form-d-notice-of-sale-of-securities/) - Form D, also referred to as the Notice of Sale of Securities, is a filing requirement under Regulation D, Section 4(6), and/or the Uniform Limited Offering Exemption of the Securities Act of 1933. It is required for companies that are selling securities in reliance on a Regulation D exemption or Section 4(6) exemption provisions. The
- [Form C](https://spvdictionary.com/dictionary/form-c/) - Form C is a document filed with the Securities and Exchange Commission (SEC) for equity crowdfunding under Regulation CF. This form is used to provide disclosures and information about the offering to potential investors. While Regulation CF transactions can utilize an SPV structure, many crowdfunding platforms operating under Regulation CF do not employ SPVs.
- [Foreign Tax Identification Number	(FTIN)](https://spvdictionary.com/dictionary/foreign-tax-identification-numberftin/) - A Foreign Tax Identification Number (FTIN) is a taxpayer identification number issued by a country outside the United States. The FTIN may take the form of a government-issued identification card or a social insurance card, depending on the country. Non-U.S. investors seeking to invest in an SPV are typically required to provide an FTIN as
- [Expense Reserve](https://spvdictionary.com/dictionary/expense-reserve/) - An Expense Reserve is a separate account, typically established by the SPV Organizer in the Organizer's name, used to collect funds from investors specifically for covering the SPV’s expenses. Investors are required to deposit their investment funds into the SPV’s main bank account and then contribute additional funds into the expense reserve account. This approach
- [Exempt Offering](https://spvdictionary.com/dictionary/exempt-offering/) - A securities transaction in which an SPV is not required to register with regulatory bodies, such as the Securities and Exchange Commission (SEC). Exempt offerings typically involve private placements or Regulation D offerings, where securities are sold privately to accredited investors rather than being offered to the general public. SPVs are mainly structured as exempt
- [ETF](https://spvdictionary.com/dictionary/etf/) - A marketable security that tracks the performance of an index, commodity, bonds, or a basket of assets. ETFs are traded on stock exchanges and offer investors exposure to a diversified portfolio, typically with lower fees compared to mutual funds.
- [Estimated Closing Date](https://spvdictionary.com/dictionary/estimated-closing-date/) - The projected date by which the SPV Organizer anticipates completing the capital raise to reach the target fundraise amount. This date is significant for all parties involved, as it indicates when funds will be available for allocation to the target asset or project. The estimated closing date helps create a timeline for investors to finalize
- [ERA (Exempt Reporting Adviser)](https://spvdictionary.com/dictionary/era-exempt-reporting-adviser/) - An Exempt Reporting Advisor is an investment adviser that is not required to register (like a Registered Investment Advisor) with the Securities and Exchange Commission (SEC) or state regulators, provided it meets specific qualifications, pays applicable fees, and reports public information through the Investment Adviser Registration Depository (IARD). Large advisers, with $100 million or more
- [Equity (Common Stock or Preferred Stock, Shares)](https://spvdictionary.com/dictionary/equity-common-stock-or-preferred-stock-shares/) - Equity refers to ownership in a company, typically represented by stock, that entitles the shareholder to a proportionate share of the company’s assets and earnings. The two most common types of equity are Common Stock and Preferred Stock. Preferred Stock is a class of ownership with a higher claim on the company’s assets and earnings
- [EIN (Employer's Identification Number, TIN, Tax Identification Number)](https://spvdictionary.com/dictionary/ein-employers-identification-number-tin-tax-identification-number/) - A unique identification number assigned to a business entity by the Internal Revenue Service (IRS) for tax reporting purposes. Commonly referred to as a Federal Tax Identification Number, the EIN is used to report taxes and identify the entity for various legal and financial activities. Banks typically require an EIN to open a bank account
- [DPA	(Debt Payable by Assets)](https://spvdictionary.com/dictionary/dpadebt-payable-by-assets/) - A type of debt security, typically used in crypto token presales, that is payable through assets. DPAs may be issued to both accredited and unaccredited investors.
- [Doing Business](https://spvdictionary.com/dictionary/doing-business/) - The term "doing business" refers to a legal condition where a business regularly conducts its normal activities in a state other than its original registered jurisdiction or has substantial contacts within that state. It also applies to having a presence in a state for legal and tax purposes. While SPVs are considered businesses, they are
- [Distribution](https://spvdictionary.com/dictionary/distribution/) - A payment made by a company to its shareholders, which may consist of stock, cash, or other assets such as crypto tokens. In the context of an SPV, a distribution refers to the allocation of capital gains and income from a portfolio company to the SPV investors. SPVs receive distributions from assets, such as portfolio
- [Discount](https://spvdictionary.com/dictionary/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
- [Debt (Liability, Financial Obligation)](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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
- [Deal](https://spvdictionary.com/dictionary/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
- [Crowdfunding](https://spvdictionary.com/dictionary/crowdfunding/) - A method of raising capital by soliciting small contributions from a large number of individuals to invest in a portfolio company. Special Purpose Vehicles (SPVs) are often used to aggregate these smaller investments into a single, larger investment amount for the purpose of making the investment. Read more: https://www.investopedia.com/terms/c/crowdfunding.asp
- [CPA (Certified Public Accountant)](https://spvdictionary.com/dictionary/cpa-certified-public-accountant/) - A designation granted by the American Institute of Certified Public Accountants (AICPA) to individuals who pass the CPA exam and meet the required work experience. CPAs are recognized for their expertise in income tax preparation but may also specialize in areas such as auditing, bookkeeping, fund accounting, forensic accounting, managerial accounting, and information technology. CPAs
- [Counsel (Lawyer, Legal Counsel, Advocate, Attorney)](https://spvdictionary.com/dictionary/counsel-lawyer-legal-counsel-advocate-attorney/) - A professional who practices law, applying legal knowledge, procedures, and experience to address specific legal issues or advance the interests of clients. A lawyer is licensed to practice in a particular jurisdiction after passing the required state bar examinations. In the context of an SPV, counsel typically provides assistance with fund documents, purchase agreements, securities-related
- [Convertible Note (Convertible Promissory Note, Convertible Debt, Convertible Loan)](https://spvdictionary.com/dictionary/convertible-note-convertible-promissory-note-convertible-debt-convertible-loan/) - A short-term debt instrument that converts into equity at a later date, typically used by early-stage companies to raise capital without immediately issuing ownership equity. In a convertible note, the investor lends money to the company with the intention of converting the loan into equity rather than receiving cash repayment. Commonly used by seed-stage startups,
- [Conversion Price](https://spvdictionary.com/dictionary/conversion-price/) - The price at which a convertible note or SAFE converts into equity. It is typically the lower of either (1) the price paid per share in the most recent equity round, adjusted for a discount rate, or (2) the valuation cap divided by the total shares of fully diluted equity.
- [Closing (Multiple)](https://spvdictionary.com/dictionary/closing-multiple/) - The process of new investors and/or additional capital investing in the same portfolio company or asset through the same legal entity during the same round of financing. SPVs will often have multiple closes by raising additional funds after an initial investment is made into the target company or asset.
- [Close](https://spvdictionary.com/dictionary/close/) - To finalize an SPV, meaning the organizer uses the funds received from investors to purchase an asset. Upon completing the purchase, the SPV executes a purchase agreement and is listed on the relevant company’s or project’s capitalization table. The closing of an SPV triggers several required actions, including countersigning SPV fund documents, generating capital account
- [Close Date](https://spvdictionary.com/dictionary/close-date/) - The date on which a closing event occurs, triggered by the earliest of the following, as defined by the Federal Securities and Exchange Commission: (1) the use of investor funds, either through signing investment documents (entering into a contract to invest in a portfolio company) or wiring funds to a portfolio company or other issuer;
- [Charter (Certificate of Incorporation, Articles of Incorporation)](https://spvdictionary.com/dictionary/charter-certificate-of-incorporation-articles-of-incorporation/) - A legal document that establishes the formation of a corporation. Issued by a federal or state government, the charter converts a business entity, such as a partnership or sole proprietorship, into a legally recognized corporation. The charter typically includes the corporation’s name, principal office location, date of incorporation, the types and amounts of stock to
- [CFO (Chief Finance Officer)](https://spvdictionary.com/dictionary/cfo-chief-finance-officer/) - The senior executive responsible for overseeing and managing the financial activities of a company, including financial planning, risk management, record-keeping, and financial reporting.
- [Certificate of Formation (Certificate of Organization, CoF, CoI)](https://spvdictionary.com/dictionary/certificate-of-formation-certificate-of-organization-cof-coi/) - A document filed with state authorities, typically the Secretary of State or Division of Corporations, to establish a limited liability company (LLC) or limited partnership (LP). As required by state LLC laws, the certificate generally includes the LLC’s purpose, principal place of business, and the names of its initial members or managers. In most states,
- [CEO	(Chief Executive Officer)](https://spvdictionary.com/dictionary/ceochief-executive-officer/) - The highest-ranking executive in a company, responsible for developing and executing high-level strategies, making major corporate decisions, overseeing overall operations and resources, and serving as the primary liaison between the board of directors and corporate operations. The CEO typically holds a position on the board of directors and, in some cases, may also serve as
- [Carry (Carried Interest, Profits Interest)](https://spvdictionary.com/dictionary/carry-carried-interest-profits-interest/) - A performance-based fee paid to the Organizer and other designated third parties as specified in the Operating Agreement, calculated as the net proceeds received by an SPV upon a liquidity event, minus the initial investment. Carry is typically paid after investors have received a return on their investment. Note: Under the Tax Cuts and Jobs
- [Capital Call](https://spvdictionary.com/dictionary/capital-call/) - A request made by an SPV for additional capital from investors when the funds initially collected are insufficient to meet the obligations outlined in the asset acquisition or purchase document. If the required additional capital exceeds the current available funds but is still within the total subscribed capital, the SPV issues a capital call to
- [Capital Account Statement](https://spvdictionary.com/dictionary/capital-account-statement/) - A document that details an investor's capital contribution, their percentage ownership in the SPV, and the underlying assets of the SPV.
- [Cap Table](https://spvdictionary.com/dictionary/cap-table/) - A spreadsheet or table that details the ownership structure of a company, commonly used by portfolio companies or early-stage ventures. It lists the various equity interests, including common shares, preferred shares, options, promissory notes, warrants, SAFEs, and other securities, along with the prices paid by each holder. The table presents ownership on both an actual
- [Board (Board of Directors, B of D, BoD)](https://spvdictionary.com/dictionary/board-board-of-directors-b-of-d-bod/) - A group of individuals elected by shareholders to represent their interests and oversee corporate governance. The board is responsible for establishing policies related to corporate management and making key decisions on major company matters. Acting as fiduciaries, board members are tasked with ensuring the financial well-being of the company. Responsibilities may include hiring and firing
- [Blue Sky](https://spvdictionary.com/dictionary/blue-sky/) - Blue Sky laws are State laws that mandate issuers to provide notice and, in some cases, pay fees to the states in which investors reside. These laws serve as an additional regulatory framework to complement federal securities regulations. For example, when an SPV raises capital from investors in multiple states, such as California, Utah, and
- [Blockchain](https://spvdictionary.com/dictionary/blockchain/) - A distributed digital ledger that records transactions made in cryptocurrencies, such as Bitcoin, in a chronological and publicly accessible manner. Each transaction is verified and added to a chain of blocks, ensuring transparency and security.
- [Asset Class](https://spvdictionary.com/dictionary/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.
- [Asset](https://spvdictionary.com/dictionary/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,
- [Arbitration](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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.
- [Angel (Angel Investor)](https://spvdictionary.com/dictionary/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
- [AML (Anti-Money Laundering)](https://spvdictionary.com/dictionary/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.
- [Allocation](https://spvdictionary.com/dictionary/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.
- [Administrator](https://spvdictionary.com/dictionary/administrator/) - A company or individual engaged by an SPV to perform designated back-office support functions for the entity.
- [Administrative Manager](https://spvdictionary.com/dictionary/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.
- [Acquisition](https://spvdictionary.com/dictionary/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,
- [ACH](https://spvdictionary.com/dictionary/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
- [Accredited Investor](https://spvdictionary.com/dictionary/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
- [Winddown / Shutdown (Wind Down, Dissolve)](https://spvdictionary.com/dictionary/winddown-shutdown-wind-down-dissolve/) - When an SPV has fulfilled its purpose, it can be wound down or shut down. The steps required to wind down an SPV may vary depending on its structure and jurisdiction but generally follow a similar process. The basic steps to winding down an SPV include: 1) formally shutting down the entity according to its
- [Structure](https://spvdictionary.com/dictionary/structure/) - An SPV's structure describes various elements combined to create an SPV. Structure in the context of an SPV refers to the jurisdiction selected and the type of “business structure”. For SPVs, the business structure options are LLC, Series LLC, LP, and Series LP. Other business structures not used for SPVs are Corporations, Sole Proprietorships, S
- [Shutdown (Closedown, Dissolution)](https://spvdictionary.com/dictionary/shutdown-closedown-dissolution/) - Portfolio company Shutdown. A cessation of operations or activity of a company or a segment of its operations. Usually, it happens when a company experiences no benefit for continuing operations, runs out of cash, or shuts down temporarily; it is the combination of output and price where the company earns just enough revenue to cover
- [Wire](https://spvdictionary.com/dictionary/wire/) - Wire is a common phrase to describe wiring funds or wire transfer from one bank account to another. Wiring money is performed throughout the world as an effective way to transfer funds. In the context of SPVs, investors who want to participate in an SPV investment opportunity must transmit their investment money to the SPV. Money
- [1065](https://spvdictionary.com/dictionary/1065/) - An IRS tax return form that reports the profits, losses, deductions, and credits of a business partnership. SPVs are considered partnerships (LLC or LP) by the IRS so SPVs file a 1065 each year the SPV has a taxable event. The IRS form 1065 generates K1s as part of its form. Each SPV member (investor)
- [1099](https://spvdictionary.com/dictionary/1099/) - Tax document issued by a business entity to another entity or individual which reports non W-2 wage income (non-employee compensation, interest, dividends, etc.). An SPV may need to generate and deliver 1099s to individuals or entities (companies) that provided the SPV with services and was paid for those services. Examples include a law firm, management
- [2x (or 3x, 4x, etc.)](https://spvdictionary.com/dictionary/2x-or-3x-4x-etc/) - A return/realization multiple. In private equity, a measurement showing how much has been paid out to investors. A realization multiple is found by dividing the cumulative distributions by the paid-in capital. Return/Realization Multiple = Cumulative Distributions / Paid-In Capital (e.g. 2x means an investor or SPV received back two times the amount that it invested
- [1042 (1042-S, 1042S)](https://spvdictionary.com/dictionary/1042-1042-s-1042s/) - Forms 1042, 1042-S and 1042-T are United States Internal Revenue Service tax forms dealing with payments to foreign persons, including non-resident aliens, foreign partnerships, foreign corporations, foreign estates, and foreign trusts. Forms 1042 and 1042-S are filed separately from an SPVs 1065 form. The main difference between forms 1042 and 1042-S is that form 1042-S
- [409(a) Valuation](https://spvdictionary.com/dictionary/409a-valuation/) - A 409(A) valuation is a formal report that sets the current value of an investment portfolio company’s common stock and the strike price to exercise an option to purchase the stock. Typically a company hires a professional appraiser to prepare the report since stock options set at a strike price below the current value of
- [Private Transaction](https://spvdictionary.com/dictionary/private-transaction/) - A purchase or sale of assets that are not publicly listed. SPVs are used to aggregate capital to participate in a private transaction.
- [Pro Rata (Proportionate Allocation, Pro Rata Dividends Share, Pro Rata Investment Opportunity)](https://spvdictionary.com/dictionary/pro-rata-proportionate-allocation-pro-rata-dividends-share-pro-rata-investment-opportunity/) - Pro rata is the term used to describe a proportionate allocation. It is a method of assigning an amount to a fraction according to its share of the whole. Pro rata in business financing may be used to identify the amount of shareholders dividend according to its share in the company. For SPVs, pro rata
- [Public Transaction](https://spvdictionary.com/dictionary/public-transaction/) - A purchase or sale of assets in which there will typically be no identifiable party to stand behind the obligations of the transaction after closing. In a public company transaction, the target company is subject to ongoing disclosure requirements by the Securities and Exchange Commission. This means that there is a significant amount of information
- [Purchase Agreement (PA)](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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+)](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/security-filings/) - Referring to the Federal Form D and Blue Sky filings.
- [SEDAR](https://spvdictionary.com/dictionary/sedar/) - System for Electronic Document Analysis and Retrieval, the electronic filing system for the disclosure documents of issuers across Canada, excluding Ontario and British Columbia as they can be filed outside SEDAR. This is the Canadian equivalent of the Securities and Exchange Commission (SEC).
- [Series A (Series Seed, Series B, Series C - Class of Stock)](https://spvdictionary.com/dictionary/series-a-series-seed-series-b-series-c-class-of-stock/) - Series A, B, and C are funding rounds that generally follow "seed funding" and "angel investing," providing outside investors the opportunity to invest cash in a growing company in exchange for equity or partial ownership. Series A, B, and C funding rounds are each separate fund-raising occurrences. Series A is the first major round of
- [Shareholder (Stockholder](https://spvdictionary.com/dictionary/shareholder-stockholder/) - Any person, company or other institution that owns at least one share of a company’s stock. Shareholders are a company's owners. They have the potential to profit if the company does well, but that comes with the potential to lose if the company does poorly. SPVs are the shareholders of companies they invest in and
- [Side Letter](https://spvdictionary.com/dictionary/side-letter/) - An Organizer will use a side letter to provide one SPV investor different (usually improved) economic terms than another investor or the rest of the SPV investors. Sometimes an SPV Organizer will reward or entice an investor to subscribe to the SPV with a change in the SPV economics, like lower carry or management fees.
- [Series LLC (SLLC)](https://spvdictionary.com/dictionary/series-llc-sllc/) - A Series Limited Liability Company is a master LLC whose organizing document provides for separate subunits (series), which operate as independent LLCs. It is a form of a limited liability company that provides liability protection across multiple "series" each of which is theoretically protected from liabilities arising from the other series, protect personal assets from
- [SPA (Stock Purchase Agreement, Deed of Conditional Sale, Deed of Subscription, Asset Purchase Agreement, Purchase Agreement)](https://spvdictionary.com/dictionary/spa-stock-purchase-agreement-deed-of-conditional-sale-deed-of-subscription-asset-purchase-agreement-purchase-agreement/) - A sales and purchase agreement (SPA) is a legal contract that obligates a buyer to buy and a seller to sell a product or service. An SPA 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,
- [SPV (Special Purpose Vehicle)](https://spvdictionary.com/dictionary/spv-special-purpose-vehicle/) - A legal structure, used typically to aggregate funds of one or more investors to purchase a private asset. SPVs have been used as a financial structure method in a number of contexts including derivatives trading, securitization transactions, and pooled investments. Today, Organizers from around the world are using the SPV structure to facilitate pooled investments
- [SS4](https://spvdictionary.com/dictionary/ss4/) - IRS form or application to apply for an EIN. This relays the contact information for the entity and the person responsible for requesting it. See EIN.
- [SSN (Social Security Number)](https://spvdictionary.com/dictionary/ssn-social-security-number/) - A nine-digit number assigned to citizens, some temporary residents and permanent residents of the United States (US) in order to track their income and determine benefit entitlements. US investors into an SPV need to share their SSN with the SPV Organizer for KYC/AML background check purposes. Read more: http://www.investopedia.com/terms/s/ssn.asp#ixzz4EK9E8Hmj
- [Stock (Share, Equity, Security)](https://spvdictionary.com/dictionary/stock-share-equity-security/) - A share in the ownership of a company, evidenced by a Stock Certificate. The exercise of the ownership rights in the company is best manifested through the voting rights granted on the different types of stock. Stock represents a claim on the company's assets and earnings.
- [Structured Vehicle (SPV, Venture Fund, Private Equity Fund, Structured Investment Vehicle)](https://spvdictionary.com/dictionary/structured-vehicle-spv-venture-fund-private-equity-fund-structured-investment-vehicle/) - A legal entity, typically an LLC or LP, used to pool investor capital to invest in a private asset. The term Structured Vehicle is a descriptive term to describe the use of an LLC or LP structure to aggregate investors funds in order to purchase a private asset. Structure Vehicle is the broad term (umbrella
- [Sub Doc (Subscription Document, Subscription Agreement)](https://spvdictionary.com/dictionary/sub-doc-subscription-document-subscription-agreement/) - A subscription agreement (Sub Docs) is an application by an investor to join an SPV (LLC or LP), and it is also used to sell stock shares in a private company. All SPV investors need to be accepted by the SPV Organizer. The investor candidate fills out a form documenting the investor's suitability for the
- [Subscription Amount](https://spvdictionary.com/dictionary/subscription-amount/) - The subscription amount is the minimum monetary commitment that the Organizer is requesting from the investors in order to participate in the deal. Most SPVs have a minimum subscription amount that is set by the Organizer and can be adjusted from time to time by the Organizer.
- [Syndicate](https://spvdictionary.com/dictionary/syndicate/) - Syndicate is another name for SPV. See SPV.
- [Syndicator](https://spvdictionary.com/dictionary/syndicator/) - Syndicator is another name for Organizer. See Organizer.
- [Takeover (Takeon, SPV Takeover)](https://spvdictionary.com/dictionary/takeover-takeon-spv-takeover/) - A takeover of the administrative, windup and post close activities of an existing SPV or fund which has already closed.
- [Taxable Event](https://spvdictionary.com/dictionary/taxable-event/) - Any event or transaction that results in a tax consequence for the party who executes the transaction is considered a taxable event. Common examples of taxable events for an SPV include receiving interest and dividends, selling securities for a gain, and exercising options. Unrealized gains on an investment do not qualify as a taxable event.
- [Tax Extension](https://spvdictionary.com/dictionary/tax-extension/) - Every tax form has a required file date but the IRS allows for extensions to this file date. Filing a tax extension changes the file date giving additional time for preparation and filing of a tax form. SPVs file a partnership return of IRS form 1065. The required date is by March 15th of each
- [TIN (EIN)](https://spvdictionary.com/dictionary/tinein/) - Taxpayer Identification Number (TIN) and Employer Identification Number (EIN) are defined as a nine-digit number that the IRS assigns to organizations. The IRS uses the number to identify taxpayers who are required to file various business tax returns. TIN/EIN are used by SPVs (Traditional LLCs and Series LLCs) to file tax returns and obtain a
- [Title III (Regulation Crowdfunding/Reg CF)](https://spvdictionary.com/dictionary/title-iii-regulation-crowdfunding-reg-cf/) - Crowdfunding regulation instituted as part of the JOBS Act. Title III allows issuers to raise funds online from non-accredited individuals for investment purposes. Issuers of securities in a Title III offering must meet various requirements. See Reg CF.
- [Traditional LLC/LP (Regular LLC/LP)](https://spvdictionary.com/dictionary/traditional-llc-lp-regular-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 traditional LLC/LP structure typically requires a filing
- [Valuation](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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
- [W-8](https://spvdictionary.com/dictionary/w-8/) - W-8 form is an Internal Revenue Service (IRS) form that allows non-US individuals and businesses to confirm they are not US taxpayers. An SPV Organizer should collect a completed W8 (W8 BEN and W8 BEN-E) from each of their non US investors. A completed W8 form allows for an SPV tax return (form 1065) to
- [W-9 (Request for Taxpayer Identification Number and Certification form)](https://spvdictionary.com/dictionary/w-9-request-for-taxpayer-identification-number-and-certification-form/) - A W-9 form is an Internal Revenue Service (IRS) form, also known as a Request for Taxpayer Identification Number and Certification form, which is used to confirm a person’s taxpayer identification number (TIN). This confirmation can be requested for either an individual defined as a U.S. citizen or a person defined as a resident alien.
- [Waterfall](https://spvdictionary.com/dictionary/waterfall/) - A schedule typically described in the SPV documents of how investor distributions are calculated. Typically broken up into tiers at either the SPV level or investment level that must be satisfied before Carried Interest is paid to the Organizer. Tiers often consist of the following phases: Return of Capital, Preferred Return, Catch-up, and Carry. Venture
- [Lead (Lead Investor)](https://spvdictionary.com/dictionary/lead-lead-investor/) - Is an investor who will put up a substantial amount of the total investment – often around 20% – usually early in the fund raising process. Leading an investment round can result in improved economic terms.
- [Ledger](https://spvdictionary.com/dictionary/ledger/) - A listing of investors at a specific point in time invested in an SPV. The ledger should include the investor’s name, amount invested, date of investment, tax identification information and contact information. Not to be confused with a general ledger which is a ledger of various asset, liabilities, equity, income and expense accounts which are
- [Liquidation Preferences](https://spvdictionary.com/dictionary/liquidation-preferences/) - Liquidation preference establishes that certain investors receive their investment money back first before other investors and/or company owners in the event the company is sold, has a public offering, pays dividends, or has another liquidation (payout) event.
- [Liquidity event](https://spvdictionary.com/dictionary/liquidity-event/) - A distribution event that results from either the sale of an investment portfolio company or some of its assets or another type of event which results in cash, equity or tokens (cryptocurrency) being distributed to the SPV. Subsequent to an SPV receiving the cash, equity or tokens, oftentimes, the SPV Organizer will distribute to the
- [LLC (limited liability company)](https://spvdictionary.com/dictionary/llc-limited-liability-company/) - See Master LLC, Regular LLC/LP, and Series LLC
- [LLC-12](https://spvdictionary.com/dictionary/llc-12/) - California Statement of Information form required for every California and registered foreign LLC within 90 days of registration and every two years thereafter.
- [Limited Partner (LP)](https://spvdictionary.com/dictionary/limited-partner-lp/) - A non-managing owner of a Limited Partnership structure, whose liability is limited to the amount of its investment. A limited partner is the technical name for investors or members of a LP or limited partnership structure. LP is also a general term (umbrella term) for investors in an investment fund or structured vehicle. SPV investors
- [Limited Partnership (LP)](https://spvdictionary.com/dictionary/limited-partnership-lp/) - See Regular LLC/LP
- [Major Investor](https://spvdictionary.com/dictionary/major-investor/) - A term used to describe investors that contribute large amounts to an investment round. The required minimum amount for an investor to be considered a major investor is specifically stated in the purchase agreement. Major Investors receive rights and benefits that non-major investors (smaller investors) do not receive. Some examples of major investor benefits are
- [Management Fee](https://spvdictionary.com/dictionary/management-fee/) - A fee paid to SPV Organizers for their time and effort in managing the investment relationship between the SPV and the investment portfolio. Some of the activities an Organizer may engage in are tracking the progress of the asset, reviewing investment portfolio reports and materials, administration tasks of the SPV like post close activities and
- [Manager](https://spvdictionary.com/dictionary/manager/) - An individual or entity that is responsible for the SPV entity (LLC or LP). A common term for Manager is GP because in the LP/GP structure the GP is the manager of the LP structure. When an LLC structure is used an LLC can be managed by a “Manager” or by its members and SPVs
- [Master LLC](https://spvdictionary.com/dictionary/master-llc/) - Master LLC is the entity registered with the state of Delaware or another state that recognizes series. Part of the series LLC structure (see series LLC definition). It is required to have a Master LLC registered with Delaware before creating any Series LLCs associated with it. The Master LLC is like a parent, or “mothership”
- [Maturity Date](https://spvdictionary.com/dictionary/maturity-date/) - Maturity date is the date on which the principal amount of a note, draft, acceptance bond or another debt instrument becomes due and is repaid to the investor and interest payments stop. It is also the termination or due date on which an installment loan must be paid in full. Maturity dates can be extended.
- [Membership Class](https://spvdictionary.com/dictionary/membership-class/) - Stockholders owning different shares in different companies or assets within the same SPV. Treatment of the investors within the SPV is different because each investor, or portion of investors, owns a different asset or assets from the other SPV investors. Investors are defined as Members of the SPV. Membership classes are a complex accounting puzzle
- [Membership Interest (Membership units, member)](https://spvdictionary.com/dictionary/membership-interest-membership-units-member/) - A membership interest is an investor's ownership stake in an LLC (not an LP). Each investor in an LLC is called a “member.” A person who holds a membership interest has a profit and voting interest in the LLC. Ownership in an LLC can be expressed by percentage ownership interest or membership units. A membership
- [Membership Sale](https://spvdictionary.com/dictionary/membership-sale/) - Sometimes investors wish to sell their SPV membership interest to a third party for more or less (usually more) than the amount they originally contributed when they invested into the SPV. It is advised to consult legal counsel and the SPV fund documents in these matters. A membership sale requires legal documentation and cap table
- [Membership Transfer](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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.
- [New Round](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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)](https://spvdictionary.com/dictionary/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
- [Plan Asset Rule](https://spvdictionary.com/dictionary/plan-asset-rule/) - An entity, such as an SPV that is not itself a plan subject to ERISA, is treated as holding assets of the investing employee benefit plans if it appears that its primary purpose is to invest retirement plan assets. This is known as the "look-through rule." The determination of whether an entity is treated as
- [Portfolio](https://spvdictionary.com/dictionary/portfolio/) - A grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents. A portfolio may consist of non-public securities, like start up companies, real estate, art, and secondaries. Investing into private assets through a number of SPVs would result in a portfolio of private assets.
- [Portfolio Company  (Investment Portfolio)](https://spvdictionary.com/dictionary/portfolio-company-investment-portfolio/) - A start up company, company or entity in which an SPV invests into.
- [3(c)(1) Exemption](https://spvdictionary.com/dictionary/3c1-exemption/) - In order for an SPV to not be subject to the Investment Company Act of 1940, the SPV must comply with various exemptions. The 3(c)(1) exemption states that no more than 100 accredited investors can participate in the SPV (there is another exemption called the Qualifying Venture Capital Fund exemption that allows, in certain circumstances,
- [3(c)(7) Exemption](https://spvdictionary.com/dictionary/3c7-exemption/) - In order for an SPV to not be subject to the Investment Company Act of 1940, the SPV must comply with various exemptions. The 3(c)(7) exemption states that no more than 2000 qualified purchaser investors can participate in the SPV. An SPV that is using the 3(c)(7) exemption cannot have a single “accredited investor” but
- [506(b) Offering](https://spvdictionary.com/dictionary/506b-offering/) - Rule 506 of Regulation D provides two exemptions from registration of an offering of securities with the SEC. An issuer offering securities pursuant to rule 506(b) cannot use general solicitation or advertising to market the securities. All the investors should be accredited investors. Issuers are required to file Form D with the SEC, comply with
- [506(c) Offering](https://spvdictionary.com/dictionary/506c-offering/) - Rule 506 of Regulation D provides two exemptions from registration of an offering of securities with the SEC. An issuer offering securities pursuant to rule 506(c) may broadly solicit and generally advertise an offering provided that, all purchasers in the offering are accredited investors, the issuer takes reasonable steps to verify purchasers’ accredited investor status,
- [506(c) Accreditation](https://spvdictionary.com/dictionary/506c-accreditation/) - Rule 506 of Regulation D provides two exemptions from registration with the SEC for companies offering and selling securities. The company can broadly solicit and generally advertise the offering if: (1) the investors in the offering are all accredited investors; (2) the issuer takes reasonable steps to verify that the investors are accredited investors by