Managing Investors

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How easy is it for investors?

Investors often say that investing through RUVs is significantly easier than making direct investments. RUVs allow investors to complete their commitment within minutes and fund their commitment over wire, ACH or USDC.

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Do Investors need an AngelList Profile?

No, they do not need to have an AngelList profile already. You can invite LPs by sharing a link with them. This link takes them directly to your RUV investment page and through an expedited sign-up flow. LPs do not need to register on AngelList ahead of time and they can create an account during the investment process.

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Do Investors need to be approved on AngelList?

No. Investors do not need pre-apply, but investors will need to confirm that they qualify as an accredited investor to view the deal page. You can share these links over email, text, etc. You may not use these links to generally solicit investors (for example, you may not post the link on Twitter nor should you include it in a press release).

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How do investors sign the closing docs?

Investors e-sign the closing docs. We do not provide any other way for LPs to sign than through our online closing flow.

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Do investors need to be accredited?

Investors in the RUV attest to their accreditation status by checking a box inside the investment flow. While investors need to be accredited, they do not need to provide documents to AngelList to verify their accreditation status when investing in private RUVs. Investors are asked to verify their accreditation status with documentation when investing in RUVs that are marketed publicly or funds that are marketed publicly such as Rolling Funds.

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What do investors sign?

Investors in the RUV do not sign the actual investment docs (like a share purchase agreement or a SAFE), instead by closing online, they subscribe to the special purpose vehicle which is the entity that will sign the actual investment docs with the company. AngelList will review the documents to ensure the terms match what you described to investors before signing the documents. If there is a divergence, we may need to message investors and provide them an opportunity to opt-out. Investors are e-signing (on AngelList) RUV documents that subscribe them to a special purpose vehicle (the RUV). The RUV documents consist of:

1. The (RUV) Partnership Agreement - This is where the parties establish respective rights and obligations to the fund, as well as the rules, processes, and procedures that shall govern the business and affairs of the fund.
2. The (RUV) Subscription Agreement and Privacy Notice - This document outlines the mechanics that surround the flow of funds to the RUV.
3. The Private Placement Memorandum (PPM) - The PPM describes the terms of the offering, details about the investment vehicle, and the risks of the investment, among other things.

test-comp-closing.zip

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Does AngelList Perform a KYC check?

Once an LP completes the investing flow, we automatically attempt to verify their identity using the information they provided (name, address, date of birth). We are required by law to perform these checks. For LPs investing with an entity that fails the automatic checks, our KYC team will follow up over email asking for additional information This check is only done once for each entity that an LP is investing with, not every time they are investing. You can track the status of an LP’s KYC check in your dashboard. “Pending KYC” means the KYC check is not complete yet. No label means the KYC check is done.

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Can an investor increase their commitment?

To increase or cancel an investment before the RUV has been finalized, investors may email us at invest@angellist.com.

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Will investors get a copy of the financing docs?

No, we do not share the financing docs with investors. However, you can send them the docs via email if you would like.

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Can investors see how much was raised in the RUV?

Investors will not see how much has been raised & committed to the RUV when it is raising, nor will they see who else invested.

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Can investors fund commitments with USDC?

Yes, select crypto as the funding method. Once sent, the funds should be posted within 2-3 business days. twitter

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What does the Investor Closing Flow look like?

Here’s the sequence of screens/steps that LPs see when they invest in your RUV. You can try out the flow for yourself by opening the private invite link in incognito mode in your browser. Users have the option of creating an account or logging in to an existing account. Once logged in, the investor will need to confirm that they are an accredited investor. They will be taken to a page where they can review the terms of the raise, sign documents, and download a copy of the Closing docs. Once they click Invest, investors will need to provide their investment entity and tax information. They can also choose their funding method, commit & e-sign. If an investor is requesting wire instructions or a wire callback, introduce them to us at invest@angellist.com. Once an investor clicks Commit & E-sign, they will be taken to the next steps page where they will be given bank instructions, be asked to verify KYC compliance, and be asked to submit tax information. Investors will also receive a confirmation email that outlines next steps.

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Do QSBS benefits flow through?

Generally, yes, the benefits of QSBS flow through when investing in a RUV. RUVs are Delaware Limited Partnerships which are passthrough entities.

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Will investors receive a K-1 every year?

In most cases, no. RUVs will generally only issue K-1s when there is taxable activity (such as distributions or interest). If applicable, K-1s will be posted to your AngelList dashboard and your email.

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When will investors receive their K-1s for the prior tax year?

AngelList provides prior tax year information sequentially as it becomes available:

• By the end of February:AngelList will publish a summary of your investments and information about which investments will have a K-1.
• By the end of March:AngelList will publish a tax package that includes either a K-1 or an estimate for all investments requiring a K-1 for the prior tax year.
• After March:Tax packages that include one or more estimates, such as investments in passthrough portfolio companies, will be updated with final K-1’s as outstanding tax information is received and processed.

Investors will be able to access their K-1 from their Dashboard.

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What are the tax consequences for international investors?

Capital gains are taxed in the recipient’s country of tax residence. Investors are investing in a US partnership and will receive a schedule K-1 for the initial year of investment and each subsequent year to the extent there is income or loss to report. Help Center Articles that may be useful:

1. What are the tax consequences for non-U.S. investors?
2. I’m foreign. Do I need to file a US tax return?
3. When will I receive my K-1 for the prior tax year?
4. My tax package says I won’t receive a K-1 for the year, why not?

Link to other Investor Tax FAQs