Frequently Asked Questions (FAQs)
You have questions, we have answers. If you don't see a question you have answered please contact us directly and we would be happy help with any additional questions
What are Special Purpose Vehicles (SPVs)
Special Purposes Vehicles are a non-operating entity established for the purpose of pooling members' capital to acquire a single asset.
What type of investment vehicles does Execute Capital Group Support?
The Execute Capital Group platform supports Special Purpose Vehicles. We currently support primary equity, secondaries, SAFEs, convertible notes and plan to offer additional deal types in the future.
What is the structure of the SPV entity and how is the income dispersed?
All SPVs are pass through vehicles; any income made from carried interest or management fees will be passed on to the EIN/SSN of the manager. It is ultimately up to you/your fund manager to decide how you want that income to be passed on and establish the best management practices for your situation.
Who handles setting up and managing bank accounts?
Execute Capital Group establishes a unique bank account for each SPV, your investors and your target investment through our system and fintech partner. Each individual person or group owns their own account entirely.
Can I use my own operating agreement?
Yes. We're aware you likely have drafted an operating agreement that works for your business and your investors. We can easily upload this operating agreement template into the Custom Portal of Execute Capital Group where it can be adjusted for every SPV you may run.
Similarly, we have a standard operating agreement we've crafted that covers 95% of use cases, and is editable should you want to use ours.
What is an accredited investor - and do I need to be one when investing in an SPV?
An accredited investor is an individual, entity or trust that falls under one of the various qualifications outlined by the SEC under Regulation D. To invest in a SPV 506b offering, you need to be a accredited investor, qualified purchaser or you can have an SPV with up to 35 non-accredited investors.
Is Execute Capital Group the Owner or posses control of the SPV?
Execute Capital Group is neither an owner nor have any active control over the SPV entity. Execute Capital Group establishes the SPV entity of behalf of our clients. The manager profile selected during the SPV creation request process (an individual or entity) has operational control of the entity, which is also outlined in the Operating Agreement. Execute Capital Group per our terms of service, is an authorized third party that can take actions on behalf of the manager and can support actions such as filling a certificate of good standing on behalf of the SPV entity each year.
Can you use this to shop interest before the SPV entity gets established?
Yes, Execute Capital Groups prospecting feature allows managers to create a SPV in a prospecting state to attract soft capital commitments before launching the SPV. This approach enables managers to gauge the level of interest from potential investors before committing to establishing the SPV entity. By using this feature, managers can streamline the process of attracting interest and gathering commitments from investors, thus simplifying the overall SPV lifecycle.
Does Execute Capital Group support secondary transactions?
Yes, Execute Capital Group supports secondary transactions. Secondary Stock Transaction (or Secondary) is when an investor buys shares in a company directly from an existing stockholder (typically a founder, employee or existing investor). The funds paid go to the seller, not to the company
Do you provide K1s for the SPV
Yes! For ten years after creation, Execute Capital Group provides K1s for all investors involved in the SPV which is included in the fee you pay for the SPV.