What are the differences between a loan-based SPV and a Nominee?
There are two types of investment structures that Funderbeam uses for syndicated investments: a loan-based SPV or a Nominee.
In making their investment, investors will provide a loan to an investment vehicle (the Loan SPV) by subscribing for Loan Notes issued by the Loan SPV. The Loan SPV then makes the investment in the fundraising company, based on the terms agreed in the relevant investment agreement. The Loan SPV becomes the legal shareholder of the fundraising company.
A separate Loan SPV is created for each fundraising company that completes a funding round through the platform. The fundraising company will have only one new shareholder instead of all the syndicate participants becoming individual shareholders.
Investors make their investment in the shares of the fundraising company via the Nominee (Funderbeam Nominees Ltd), which holds the shares in the company on their behalf. Investors are the beneficial owners of their shares in the fundraising company, but the shares are held on the investors’ behalf by the Nominee SPV. Similar to the Loan SPV, only the Nominee is listed as a shareholder of the fundraising company. The Nominee can hold shares in different fundraising companies.
We aim to help lead investors and fundraising companies chose the best possible structure for their needs. As an introduction, you can see the main differences here:
|Loan structure||Nominee structure|
|Who holds the shareholders rights towards the fundraising company? (Voting, dividends)||The SPV||The investors|
|Who is the beneficial owner of shares?||The SPV||The investors|
|What do the investors receive in return for their investment?||Notes representing the loan||Units representing the shares|
|Which instruments are available?||Equity and convertible||Equity and convertible|
|What costs are incurred by the Fundraising Company for setting up the investment vehicle?||Funderbeam fees + Capital requirement for SPV||Funderbeam fees|
|How many additions are made to the Fundraising Company’s cap table?||One single investment vehicle|
|Who is responsible for the information disclosure?||Fundraising company|
|Who is responsible for the taxes from investor’s side?||Investors|
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