What is a Special Purpose Vehicle (SPV)?
What is an SPV? An SPV, which is the initialism of ‘Special Purpose Vehicle’, is exactly what the name suggests: it is a vehicle created for a special purpose. An SPV is usually launched by one investor, or a limited number of investors, to hold a single asset for long-term investment. SPVs are sometimes called a special […]
Who sets up SPVs, Syndicates and Funds (VCCs) with Auptimate?
Auptimate’s products and services have been designed for a wide variety of people and businesses. The user types below are some of the most common – and are referred to throughout Auptimate’s structuring tool – but we always want to hear from other users that may be interested in our products or services! User type […]
What is a Fund or VCC?
What is a Fund? A Fund is….actually kind of hard to define. The word ‘fund’ can be seen with surprising frequency. It’s used to describe structures like pension funds, mutual funds, trust funds, sovereign wealth funds, exchange-traded funds, private equity funds and hedge funds. All of these have the word ‘fund’ in common, but differ […]
What is a Syndicate?
What is a Syndicate? A Syndicate is an SPV with a twist (if you’re wondering “what is an SPV?”, see our separate article “Understanding SPVs“). Like an SPV, a Syndicate is an entity or legal arrangement (often a company) launched to acquire and hold a single asset for long-term investment. Unlike an SPV, a Syndicate […]
Representations and Warranties under the CARE
What are representations and warranties? Many contracts include terms called representations, warranties and undertakings. The CARE is no exception. Each of those terms have a specific meaning in the eyes of the law but, to simplify things, you can read them all as being a promise. Therefore, under a CARE, the company and the investor […]
Most Favoured Nation and Information Rights under the CARE
Most of the other articles in this series focus on the CARE’s conversion mechanics and related economic terms, including how these are impacted by the CARE’s deal terms (i.e. Discount Rate, Minimum Equity Raise, Multiple, Maturity Date and Maturity Cap). There are, however, a few other important standard provisions that are not directly impacted by […]
Liquidation Priority under the CARE
Why worry about the Liquidation Priority? In either a Dissolution Event or a Liquidity Event, both a CARE investor and a founder may be owed some money under the terms of their CARE and their shares, respectively. The more important point, however, is whether they will actually receive what they are owed. A CARE investor’s […]
Maturity Conversion under the CARE
What is a Maturity Date? As its name suggests, the CARE’s primary purpose is to convert into equity (i.e. shares). If and when this happens depends on the event that triggers the CARE’s conversion: an Equity Financing, a Liquidity Event or a Dissolution Event. The timing of these events – or whether they happen at […]
Dissolution Events under the CARE
Why have a Dissolution Event? A CARE investment will not guarantee the path to a successful Equity Financing or Liquidity Event. It’s a tough world out there and a significant number of start-ups will fall on hard times, forcing them to shutter their doors. The CARE does, however, envisage such an unfortunate outcome. A ‘Dissolution […]
Liquidity Events under the CARE
Why have a Liquidity Event? The CARE is used where an investor makes a cash investment on the expectation of receiving shares at a later date. The aim may be for the investor to receive shares in the company (i.e. on an Equity Financing or, if applicable, a Maturity Conversion), but the CARE also covers […]