AngelTrades is a discovery and trading platform for private company funds, whose invite-only membership is made of U.S.-only accredited/angel investors.
AngelTrades is the first invite-only trading platform for U.S.-only accredited investors, with U.S.-only private opportunities. Competing platforms require hold periods of seven-to-ten years. Because the AngelTrades platform provides liquidity we refer to our SPVs as Liquid SPVs™ or LSPVs™. Liquid SPVs (LSPVs) were invented by AngelTrades, Inc. and that term is protected by trademark in the United States. Our LSPVs provide a way for any AngelTrades Member to invest deal-by-deal in single opportunities, which are SEC-compliant utilizing rule 506 of Regulation D.
If an underlying opportunity has a financial event such as going public or is sold, or if there is a dividend payment or any type of financial payment to owners of the underlying opportunity, that benefit is immediately passed on to the owner/s of the LSPV based on the number of shares owned by the Member/s.
Comparison to Other Investment Platforms
Members MUST be U.S. Citizens & Accredited
According to the Securities & Exchange Commission there are two types of accredited investors who may invest and trade private opportunities: Those with earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR those with a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence) OR a trust, with total assets in excess of $5 million, not formed specifically to purchase the subject securities, whose purchase is directed by a savvy person, OR an entity in which all of the equity owners are accredited investors.
Managing Member Shared Carry
Each listed opportunity on AngelTrades.com is made available as a limited liability partnership (“LLP”), which we call a Liquid-Special-Purpose-Vehicle™ (LSPV™). It’s a single-focused fund, investing in one private company opportunity and is tradable amongst AngelTrades Members after the S.E.C.-required one-year hold period. Each time a share in that fund sells at a profit the Managing Member receives a 5% share of the profit as shared carry.
One-Year Hold on all Shares
All investments may be sold one year after the investment is made. When any share owners sell their individual shares the profit (carry) is shared, and those rewards are provided to the accounts of the referring members, Ambassadors and AngelTrades.
After the required hold period a fund’s shares are delivered to the member’s account on AngelTrades.com and they may be sold to other members. Because there is limited supply of shares (no more than 100 for each LSPV fund), and investors may choose to hold for the long-term, it is likely that there will be very thin trading and there may not be any shares available at all. It is also possible shares that are listed for sale may not attract buyers. In this peer-to-peer exchange buyers may sell for more or less than the original cost of each share and much of this will be dependent on the success of the underlying opportunity.
Sale of Shares by Investors
After one year, when/if an investor sells a share, the seller pays a fee known as “carry” on the profit from their investment. The initial carry is 5%.
Example: A member invests $25,000 (including the 5% lifetime management fee) in a single share and later sells the share for $50,000. The member shows a profit of $25,000 and would pay $1,250 in carry and keep $23,750 plus their original investment of $25,000.
Of the $1,250 carry in the above example the entire $1,250 is given to the managing Member who performed due-diligence and approved the opportunity for listing and checks in with them quarterly to review updated company results.
If the Company is sourced and managed by the AngelTrades team, or is managed directly by the AngelTrades team after the Company applied directly with no referring Member, AngelTrades receives the $1,250.
Secondary Sale of Shares
If after one year a Member sells a Security share it always requires a one-year hold period by the new buyer. If after the hold period the secondary buyer sells at a profit the same 5% carry applies to the seller.
Every time a share is resold it requires a one-year hold period by the new buyer and the same 5% carry applies to the seller if there is a profit.