SPV Dictionary

This Special Purpose Vehicle (SPV) Dictionary serves as a comprehensive resource for understanding the terminology associated with these financial instruments. SPVs, by their nature, can involve a complex interplay of legal, accounting, banking, tax, compliance, and administrative considerations. This dictionary aims to provide clear and concise definitions for the key terms encountered in the context of SPVs.

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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

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

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.

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.

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

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

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

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