Selling shareholders are current and former employees, early accredited investors, and advisors. They are typically selling only a portion of their holdings in order to 1) cover costs associated with exercising and paying taxes on the remainder of their shares 2) life events such as purchasing a home or preparing for a child and to 3) diversify their holdings.
Your investment in most funds would be taxed like any other fund investment. Our networks funds are taxed as partnerships, meaning that the fund’s gains and losses would pass through to its investors. Generally, if an investment is held for more than one year before its disposition, any income resulting from that investment would be taxed at the long term capital gains rate. On an annual basis, Investors will receive a Schedule K-1 that updates them on their investment. Note: we are not tax experts and have provided this discussion for informational purposes only and not as personal tax advice. You should consult your tax advisors for guidance specific to your circumstances.
Yes. Most funds have a third party Fund Administrator, who should issue K1’s annually. Our network will also update you on any material impact to your investment (company news, new funding rounds, secondary transactions or indicators to new valuation).
Following an IPO lockup period, the funds you invested in can transfer the shares to your brokerage account for you to hold or sell at your preference.
We cannot guarantee an exit nor a timeline for any of your holdings. However, our strategy of investments are to provide companies with a faster or highly anticipated IPO in the near horizon. Although generally investment opportunities are companies who have received institutional financing and have a typical liquidity event of 1-3 years.
The industry uses the last round of financing and expected IPO range as a pricing guidepost. Other factors may include investor demand, access to the company, other secondary transactions that have occurred and publicly available information.
While our network views the membership interest as a long-term commitment, it may be permissible to sell your interest if needed and upon approval of the manager. We would be able to accommodate the situation by working with you to find a replacement buyer in the fund. Your LLC ownership is transferable, and we can market it to our investor base, but we cannot guarantee we’ll be able to find a buyer.
accredited investors are Members of a fund (organized as an LLC) that purchases a specific company’s Shares or the economic interests in shares. Most funds we introduce will have a manager that will establish a Series of Interests for the purpose of making a separate and distinct investment in a specific company or companies identified by the Manager; purchasing securities in such company or companies from secondary sources (directly or through forward purchase contracts); or investing in interests of investment funds, special purpose vehicles and other entities (including investment funds and other entities affiliated with the Manager or its affiliates) whose investment portfolios are comprised of one or more companies consistent with the Fund’s general investment focus. Each Series will remain segregated from each other Series.
When a company series that you’ve invested in goes public, our network would register the shares and work with your brokerage account’s custodian to transfer the shares. In some but not all cases, the common stock is subject to a 30-180 day lockup, so we would facilitate this transfer after this period.
Right of first refusal (ROFR or RFR) is a contractual right that gives its holder the option to enter a business transaction with the owner of something, according to specified terms, before the owner is entitled to enter into that transaction with a third party. In short, the Right of First Refusal is the company’s right to purchase the shares from the shareholder on the same terms asa third parties bid. The company has up to 30 days to make the decision upon a third party submitting a Bona Fide Offer via a Transfer Notice (they may also waive their right, in which case we can proceed immediately).
Yes, Our fund will send your countersigned Subscription Document indicating your membership in the Fund. You should also receive a Confirmation Letter from the managers outlining the Series of participation and breakdown of your investment.
Following any lockup or restriction period (if applicable), the funds you invested in may transfer the shares to your brokerage account for you to hold or sell at your preference.
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