Learning Centre
Learning Centre
Whether you are launching your first or your fiftieth investment, Allocations gives you the knowledge and tools you need to succeed.
ALL
SPV BASICS
FUND BASICS
INVESTING
LEGAL, TAX AND COMPLIANCE
SPV BASICS
What is an SPV and how does it work?
An SPV is a legal entity created for a single investment, pooling capital to purchase one asset. It keeps risks isolated from the sponsor’s main business. Once the investment exits, the SPV distributes proceeds and winds down
SPV BASICS
Where SPVs are used?
SPVs are used in venture, secondaries, private credit, real assets, and token-linked rights. They simplify cap tables, support cross-border capital, and isolate risk for specific transactions. Corporates, family offices, and digital-asset treasuries use them to ring-fence and manage strategic holdings.
SPV BASICS
Why investors and founders use SPVs?
Investors get deal-by-deal exposure with clear terms and defined carry. Founders keep one line on the cap table and speed up closing. Digital-asset teams use SPVs to manage custody, token events, and reporting cleanly.
SPV BASICS
How to launch an SPV on Allocations
Allocations handles formation, banking, onboarding, and compliance in one platform. Sponsors start a deal, invite investors, collect capital, and close quickly. The system manages reporting, distributions, tax documents, and wind-down automatically.
SPV BASICS
Benefits of a Series LLC structure
A Series LLC lets multiple SPVs operate under one master entity, each legally separate. Filings and compliance are shared, reducing cost. It scales well for frequent SPV managers.
SPV BASICS
What are Investor rights in an SPV?
Investors own membership interests in the SPV. Rights are defined in the Operating Agreement, Subscription Agreement, and the deal instrument. The SPV manager acts on behalf of investors.
SPV BASICS
How SPVs make money?
SPVs do not produce revenue. They pass investment gains back to investors. Profits come from the exit of the underlying asset. Sponsors earn carry only if the investment gains value.
SPV BASICS
How an SPV runs end-to-end
An SPV is formed, funded by investors, and used to purchase a specific asset. It handles subscriptions, compliance, banking, and ongoing reporting. After the exit, it distributes proceeds and dissolves.
SPV BASICS
What documents are included in an SPV setup?
An SPV includes formation filings, the Operating Agreement, and series designations. Investors sign subscription documents and submit tax and accreditation forms. Allocations coordinates Form D, Blue Sky, and AML/KYC checks.
SPV BASICS
Can international investors participate?
Yes, Allocations supports both U.S. investors under Reg D and non-U.S. investors under Reg S. Every investor completes AML, KYC, sanctions checks, and proper tax forms. Jurisdictions are tracked separately for full regulatory compliance.
SPV BASICS
What are carry and management fees in SPVs?
Carry is a performance fee, commonly 10-20%, taken only on profits. Management fees are uncommon in single-deal SPVs. Allocations calculates, tracks, and distributes fees transparently
SPV BASICS
How Allocations handles distributions and exits?
Proceeds return to the SPV, where the system reconciles payouts automatically. Carry, fees, and pro-rata returns are calculated and wired to each investor. Full transaction records and tax updates appear in the dashboard.
SPV BASICS
Typical costs of launching an SPV
Cost includes platform fees, filings, and banking or tax requirements. Delaware and Cayman entities have fixed annual fees. Allocations provides exact deal pricing by structure and investor mix.
SPV BASICS
What reporting do SPV investors receive?
Investors get dashboards with ownership, funding, and distributions. They receive automated statements, performance updates, and tax documents. All materials remain archived for audit and future reference.
SPV BASICS
When to launch an SPV?
Launch once you have allocation and investor interest. You should know the instrument, timeline, and investor mix. Allocations lets you configure the vehicle and activate it when ready.
SPV BASICS
Single SPV vs. layered SPV
A single SPV invests directly into one deal. A layered structure adds a feeder or master entity for tax treatment, cross-border flows, and investor separation.
SPV BASICS
How does Allocations compare to AngelList or Carta for SPVs?
Allocations provides full-stack automation across formation, banking, onboarding, filings, and taxes. It supports Delaware and Cayman structures. Managers run SPVs and funds from the same system.
FUND BASICS
What is a venture fund?
A venture fund pools capital from LPs and invests across many companies. The GP picks deals, manages the portfolio, and oversees exits. Fees and carry define economics and long-term outcomes.
FUND BASICS
How is a fund different from an SPV?
A fund invests in multiple companies over a defined lifecycle with recurring capital calls and reporting. An SPV invests in one deal, raises once, and distributes once. Managers use funds for core strategy and SPVs for co-invests or special opportunities.
FUND BASICS
How do I form a fund with Allocations?
You define the strategy, structure, and economics. Fund+ generates LPAs, PPMs, subscriptions, and side letters. Once banking opens, LPs onboard digitally and the first close activates deployment.
FUND BASICS
What key fund documents do I need?
A fund uses an LPA for terms, a PPM for risks and strategy, and Subscription Agreements for LPs. Side letters customize terms. Digital asset funds add valuation, custody, and trading clauses.
FUND BASICS
Management fees and carried interest
Management fees fund operations, often charged on commitments early and invested capital later. Carried interest is the GP’s share of profits after returning capital and meeting hurdles. Allocations tracks capital accounts and automates waterfall calculations during distributions.
FUND BASICS
How do Fund LPs differ from SPV investors?
Fund LPs commit to a diversified strategy and expect ongoing calls and reporting. SPV investors choose a single deal, fund once, and wait for one exit. Funds provide breadth and pacing; SPVs offer precision and speed.
FUND BASICS
How are capital calls managed on Allocations?
Managers create capital calls, send notices, and track payments automatically. LPs see all calls, instructions, and confirmations in their portal. Real-time ledgers keep audits and reconciliations clean and efficient.
FUND BASICS
How fund distributions are handled?
Proceeds are received, expenses and carry applied, and waterfalls calculated automatically. Notices and payouts are issued to each LP with full transparency. All statements and proofs remain stored for download.
FUND BASICS
What is a fund administrator and how does Allocations automate it?
A fund admin maintains books, capital accounts, fee schedules, and reporting. Allocations automates these tasks with built-in workflows and service review. Managers and LPs operate from a single, accurate source of truth.
FUND BASICS
Delaware vs. Cayman fund structures
Delaware funds suit U.S. taxable investors and issue K-1s. Cayman funds are tax-neutral and ideal for non-U.S. and U.S. tax-exempt LPs. Both can be paired in master–feeder structures, fully supported by Allocations.
FUND BASICS
Can I raise a fund and SPVs at the same time?
Yes, funds run the main strategy while SPVs capture co-invests or special opportunities. Allocations manages both vehicle types in one account. LPs and investors get consistent onboarding, flows, and reporting.
FUND BASICS
What is a hybrid or parallel fund structure?
Hybrid structures use multiple vehicles for different investor types. Example: Delaware for U.S. taxable LPs and Cayman for non-U.S. or tax-exempt LPs. Both invest side by side with aligned calls, allocations, and waterfalls.
FUND BASICS
Advantages of launching a fund digitally
Digital formation cuts timelines and unifies documents, onboarding, and workflow. Calls, distributions, statements, and tax docs issue from one dashboard. Managers reduce admin overhead and LPs gain full visibility into the fund lifecycle.
INVESTING
What is an accredited investor?
An accredited investor meets SEC income, net-worth, or professional criteria to invest in private offerings. Qualifiers include high income, $1M+ net worth, certain FINRA licenses, or $5M+ entity assets. These standards apply to SPVs, funds, and corporate/digital-asset treasury raises under Regulation D.
INVESTING
Do I need to be accredited to invest in an SPV or fund?
Most deals run under Regulation D. Under 506(c), all investors must be accredited and verified. Under 506(b), accredited investors plus some sophisticated non-accredited investors may join. Sponsors often limit to accredited investors.
INVESTING
How does Allocations verify accreditation?
Investors upload tax returns, brokerage statements, or license records. Allocations reviews documents for 506(c) deals. For 506(b), investor representations and questionnaires are maintained in the portal.
INVESTING
Minimum investment requirements
Sponsors set the minimum. SPVs often have lower minimums. Funds generally require larger commitments. Allocations supports custom tiers.
INVESTING
How returns are calculated and distributed?
Returns follow the Operating Agreement (SPVs) or LPA (funds). Proceeds flow in, expenses and carry are applied, and distributions are made by ownership or capital accounts. Allocations automates ledger updates, waterfall rules, and investor notices.
INVESTING
How carried interest works?
Carry is the sponsor’s share of profits after capital is returned and any hurdle is met. It applies only when a gain occurs. Allocations tracks capital accounts and applies the waterfall so investors see clear breakdowns.
INVESTING
Direct vs. indirect investment
Direct investment means holding the security in your own name. Indirect investment means participating through an SPV or fund. Indirect structures streamline cap tables, taxes, onboarding, and custody.
INVESTING
How to track your portfolio on Allocations?
Investors get a dashboard showing all SPVs and funds. You can view commitments, calls, ownership, distributions, documents, and tax forms. All records stay archived for full historical visibility.
INVESTING
How KYC/AML verification works?
Investors provide identity, residency, and ownership information. Allocations checks sanctions, AML, and tax forms. Cayman vehicles include enhanced due diligence for global investors.
INVESTING
Risks of investing through an SPV?
SPVs are concentrated in one asset. They are illiquid and long-term. They depend on the underlying company or token. Allocations provides clear documents so investors understand the risks.
INVESTING
What happens if an SPV goes to zero?
If the underlying investment fails, the SPV becomes worthless. Sponsors complete final accounting, issue any tax forms, and dissolve the entity. Losses for U.S. partnerships may appear on the K-1.
INVESTING
How long SPVs and funds remain active?
An SPV stays active until its single investment exits and final filings are complete. Funds typically operate for around 10 years, plus possible extensions. Both remain open until all capital is returned and the entity is dissolved.
INVESTING
Process for exiting an investment
Proceeds are received by the SPV or fund and reviewed by the sponsor. Allocations updates accounts, applies the waterfall, and sends payouts. Investors receive statements and, after final distribution, the entity moves to dissolution.
INVESTING
Can non-U.S. investors participate?
Yes, non-U.S. investors join under Regulation S or via Cayman vehicles. They complete W-8 forms plus standard KYC/AML checks. Cayman structures are common for global capital and digital-asset treasury strategies.
INVESTING
How tax documents are delivered?
All tax forms appear in the investor portal. U.S. entities issue Schedule K-1; Cayman vehicles provide annual statements. Documents stay archived for future reference and downloads.
LEGAL, TAX & COMPLIANCE
What legal entities does Allocations form?
Allocations forms Delaware LLCs and LPs for SPVs and Delaware LPs for funds under 3(c)(1) or 3(c)(7). For global pools, it supports Cayman, BVI, and Seychelles entities. Formation, filings, and banking run on the platform.
LEGAL, TAX & COMPLIANCE
What is a Series LLC?
A Series LLC has a master LLC with separate series, each with its own investors, assets, and books. Liabilities stay isolated. It is ideal for managers running many SPVs.
LEGAL, TAX & COMPLIANCE
Tax benefits of a Series LLCat is a Series LLC?
Each series is treated as its own partnership for U.S. federal tax purposes when structured correctly. Income and losses flow only to investors in that series and appear on separate K-1s. Sponsors gain cost efficiency and cleaner separation, though treatment varies by state.
LEGAL, TAX & COMPLIANCE
What is an Exempt Reporting Adviser (ERA)?
An ERA is exempt from full SEC registration but must file a shortened Form ADV. You qualify if you advise only VC funds or have under $150M in U.S. private-fund AUM. Many early-stage SPV and fund managers operate as ERAs until they scale.
LEGAL, TAX & COMPLIANCE
When do I need to file Form ADV?
You must file Form ADV once you rely on an ERA exemption or become a registrable adviser. Initial filings are due when you begin relying on the exemption, and updates are required at least annually and after material changes. Allocations structures compliant vehicles but does not file ADV on your behalf.
LEGAL, TAX & COMPLIANCE
How Allocations handles investor compliance and reporting?
KYC, AML, accreditation checks, and subscriptions are built into onboarding. Form D and Blue Sky filings are coordinated. Statements, distributions, and tax reports are generated in the platform.
LEGAL, TAX & COMPLIANCE
Taxable income vs. accounting income
Accounting income comes from GAAP/IFRS financials; taxable income follows tax rules. Differences arise from timing, deductions, and adjustments. These variations appear on K-1s for SPVs and funds, especially with digital-asset holdings.
LEGAL, TAX & COMPLIANCE
Forms W-8 and W-9
W-9 is for U.S. individuals and entities; W-8BEN and W-8BEN-E certify non-U.S. status. These forms determine withholding and tax reporting. Allocations collects the correct form during onboarding for every investor.
LEGAL, TAX & COMPLIANCE
Can I write off an SPV loss?
A complete SPV loss generally flows through on the K-1 and may be deductible. Actual deductions depend on basis, passive-loss rules, and investor tax circumstances. Investors should confirm treatment with their tax adviser.
LEGAL, TAX & COMPLIANCE
How Allocations handles K-1s?
The platform tracks income, expenses, and allocations throughout the year. It compiles data for K-1 preparation and delivers the final tax package to each investor. All historical K-1s remain archived in the investor portal.
LEGAL, TAX & COMPLIANCE
What is pass-through taxation?
The entity pays no tax; income and losses flow directly to investors. LLCs and LPs taxed as partnerships use this model. It avoids a second tax layer and preserves the character of gains and losses.
LEGAL, TAX & COMPLIANCE
How Allocations ensures SEC and state compliance?
Allocations generates compliant documents and manages investor certifications and filings. It supports Form D, Blue Sky notices, and subscription records. Sponsors remain responsible for choosing exemptions and following solicitation rules.
LEGAL, TAX & COMPLIANCE
What deal leads should know about securities laws?
Deal leads are issuing securities and must understand the relevant exemption. They need to know accreditation rules, verification requirements, and marketing restrictions. These apply whether investing in startups or digital-asset treasury structures.
LEGAL, TAX & COMPLIANCE
How AML compliance works on Allocations?
The platform verifies identity, sanctions status, and beneficial ownership for all investors. Entity investors disclose controlling persons; transactions are monitored. Allocations builds around evolving AML rules for private funds and global/crypto exposure.
LEGAL, TAX & COMPLIANCE
Privacy and data protection on Allocations
Personal data is used only for administering the vehicle and fulfilling legal requirements. Access is restricted to authorized personnel and essential service providers. Allocations aligns with regional regimes such as Cayman DPA for offshore structures.
ALL
SPV BASICS
FUND BASICS
INVESTING
LEGAL, TAX AND COMPLIANCE
SPV BASICS
What is an SPV and how does it work?
An SPV is a legal entity created for a single investment, pooling capital to purchase one asset. It keeps risks isolated from the sponsor’s main business. Once the investment exits, the SPV distributes proceeds and winds down
SPV BASICS
Where SPVs are used?
SPVs are used in venture, secondaries, private credit, real assets, and token-linked rights. They simplify cap tables, support cross-border capital, and isolate risk for specific transactions. Corporates, family offices, and digital-asset treasuries use them to ring-fence and manage strategic holdings.
SPV BASICS
Why investors and founders use SPVs?
Investors get deal-by-deal exposure with clear terms and defined carry. Founders keep one line on the cap table and speed up closing. Digital-asset teams use SPVs to manage custody, token events, and reporting cleanly.
SPV BASICS
How to launch an SPV on Allocations
Allocations handles formation, banking, onboarding, and compliance in one platform. Sponsors start a deal, invite investors, collect capital, and close quickly. The system manages reporting, distributions, tax documents, and wind-down automatically.
SPV BASICS
Benefits of a Series LLC structure
A Series LLC lets multiple SPVs operate under one master entity, each legally separate. Filings and compliance are shared, reducing cost. It scales well for frequent SPV managers.
SPV BASICS
What are Investor rights in an SPV?
Investors own membership interests in the SPV. Rights are defined in the Operating Agreement, Subscription Agreement, and the deal instrument. The SPV manager acts on behalf of investors.
SPV BASICS
How SPVs make money?
SPVs do not produce revenue. They pass investment gains back to investors. Profits come from the exit of the underlying asset. Sponsors earn carry only if the investment gains value.
SPV BASICS
How an SPV runs end-to-end
An SPV is formed, funded by investors, and used to purchase a specific asset. It handles subscriptions, compliance, banking, and ongoing reporting. After the exit, it distributes proceeds and dissolves.
SPV BASICS
What documents are included in an SPV setup?
An SPV includes formation filings, the Operating Agreement, and series designations. Investors sign subscription documents and submit tax and accreditation forms. Allocations coordinates Form D, Blue Sky, and AML/KYC checks.
SPV BASICS
Can international investors participate?
Yes, Allocations supports both U.S. investors under Reg D and non-U.S. investors under Reg S. Every investor completes AML, KYC, sanctions checks, and proper tax forms. Jurisdictions are tracked separately for full regulatory compliance.
SPV BASICS
What are carry and management fees in SPVs?
Carry is a performance fee, commonly 10-20%, taken only on profits. Management fees are uncommon in single-deal SPVs. Allocations calculates, tracks, and distributes fees transparently
SPV BASICS
How Allocations handles distributions and exits?
Proceeds return to the SPV, where the system reconciles payouts automatically. Carry, fees, and pro-rata returns are calculated and wired to each investor. Full transaction records and tax updates appear in the dashboard.
SPV BASICS
Typical costs of launching an SPV
Cost includes platform fees, filings, and banking or tax requirements. Delaware and Cayman entities have fixed annual fees. Allocations provides exact deal pricing by structure and investor mix.
SPV BASICS
What reporting do SPV investors receive?
Investors get dashboards with ownership, funding, and distributions. They receive automated statements, performance updates, and tax documents. All materials remain archived for audit and future reference.
SPV BASICS
When to launch an SPV?
Launch once you have allocation and investor interest. You should know the instrument, timeline, and investor mix. Allocations lets you configure the vehicle and activate it when ready.
SPV BASICS
Single SPV vs. layered SPV
A single SPV invests directly into one deal. A layered structure adds a feeder or master entity for tax treatment, cross-border flows, and investor separation.
SPV BASICS
How does Allocations compare to AngelList or Carta for SPVs?
Allocations provides full-stack automation across formation, banking, onboarding, filings, and taxes. It supports Delaware and Cayman structures. Managers run SPVs and funds from the same system.
FUND BASICS
What is a venture fund?
A venture fund pools capital from LPs and invests across many companies. The GP picks deals, manages the portfolio, and oversees exits. Fees and carry define economics and long-term outcomes.
FUND BASICS
How is a fund different from an SPV?
A fund invests in multiple companies over a defined lifecycle with recurring capital calls and reporting. An SPV invests in one deal, raises once, and distributes once. Managers use funds for core strategy and SPVs for co-invests or special opportunities.
FUND BASICS
How do I form a fund with Allocations?
You define the strategy, structure, and economics. Fund+ generates LPAs, PPMs, subscriptions, and side letters. Once banking opens, LPs onboard digitally and the first close activates deployment.
FUND BASICS
What key fund documents do I need?
A fund uses an LPA for terms, a PPM for risks and strategy, and Subscription Agreements for LPs. Side letters customize terms. Digital asset funds add valuation, custody, and trading clauses.
FUND BASICS
Management fees and carried interest
Management fees fund operations, often charged on commitments early and invested capital later. Carried interest is the GP’s share of profits after returning capital and meeting hurdles. Allocations tracks capital accounts and automates waterfall calculations during distributions.
FUND BASICS
How do Fund LPs differ from SPV investors?
Fund LPs commit to a diversified strategy and expect ongoing calls and reporting. SPV investors choose a single deal, fund once, and wait for one exit. Funds provide breadth and pacing; SPVs offer precision and speed.
FUND BASICS
How are capital calls managed on Allocations?
Managers create capital calls, send notices, and track payments automatically. LPs see all calls, instructions, and confirmations in their portal. Real-time ledgers keep audits and reconciliations clean and efficient.
FUND BASICS
How fund distributions are handled?
Proceeds are received, expenses and carry applied, and waterfalls calculated automatically. Notices and payouts are issued to each LP with full transparency. All statements and proofs remain stored for download.
FUND BASICS
What is a fund administrator and how does Allocations automate it?
A fund admin maintains books, capital accounts, fee schedules, and reporting. Allocations automates these tasks with built-in workflows and service review. Managers and LPs operate from a single, accurate source of truth.
FUND BASICS
Delaware vs. Cayman fund structures
Delaware funds suit U.S. taxable investors and issue K-1s. Cayman funds are tax-neutral and ideal for non-U.S. and U.S. tax-exempt LPs. Both can be paired in master–feeder structures, fully supported by Allocations.
FUND BASICS
Can I raise a fund and SPVs at the same time?
Yes, funds run the main strategy while SPVs capture co-invests or special opportunities. Allocations manages both vehicle types in one account. LPs and investors get consistent onboarding, flows, and reporting.
FUND BASICS
What is a hybrid or parallel fund structure?
Hybrid structures use multiple vehicles for different investor types. Example: Delaware for U.S. taxable LPs and Cayman for non-U.S. or tax-exempt LPs. Both invest side by side with aligned calls, allocations, and waterfalls.
FUND BASICS
Advantages of launching a fund digitally
Digital formation cuts timelines and unifies documents, onboarding, and workflow. Calls, distributions, statements, and tax docs issue from one dashboard. Managers reduce admin overhead and LPs gain full visibility into the fund lifecycle.
INVESTING
What is an accredited investor?
An accredited investor meets SEC income, net-worth, or professional criteria to invest in private offerings. Qualifiers include high income, $1M+ net worth, certain FINRA licenses, or $5M+ entity assets. These standards apply to SPVs, funds, and corporate/digital-asset treasury raises under Regulation D.
INVESTING
Do I need to be accredited to invest in an SPV or fund?
Most deals run under Regulation D. Under 506(c), all investors must be accredited and verified. Under 506(b), accredited investors plus some sophisticated non-accredited investors may join. Sponsors often limit to accredited investors.
INVESTING
How does Allocations verify accreditation?
Investors upload tax returns, brokerage statements, or license records. Allocations reviews documents for 506(c) deals. For 506(b), investor representations and questionnaires are maintained in the portal.
INVESTING
Minimum investment requirements
Sponsors set the minimum. SPVs often have lower minimums. Funds generally require larger commitments. Allocations supports custom tiers.
INVESTING
How returns are calculated and distributed?
Returns follow the Operating Agreement (SPVs) or LPA (funds). Proceeds flow in, expenses and carry are applied, and distributions are made by ownership or capital accounts. Allocations automates ledger updates, waterfall rules, and investor notices.
INVESTING
How carried interest works?
Carry is the sponsor’s share of profits after capital is returned and any hurdle is met. It applies only when a gain occurs. Allocations tracks capital accounts and applies the waterfall so investors see clear breakdowns.
INVESTING
Direct vs. indirect investment
Direct investment means holding the security in your own name. Indirect investment means participating through an SPV or fund. Indirect structures streamline cap tables, taxes, onboarding, and custody.
INVESTING
How to track your portfolio on Allocations?
Investors get a dashboard showing all SPVs and funds. You can view commitments, calls, ownership, distributions, documents, and tax forms. All records stay archived for full historical visibility.
INVESTING
How KYC/AML verification works?
Investors provide identity, residency, and ownership information. Allocations checks sanctions, AML, and tax forms. Cayman vehicles include enhanced due diligence for global investors.
INVESTING
Risks of investing through an SPV?
SPVs are concentrated in one asset. They are illiquid and long-term. They depend on the underlying company or token. Allocations provides clear documents so investors understand the risks.
INVESTING
What happens if an SPV goes to zero?
If the underlying investment fails, the SPV becomes worthless. Sponsors complete final accounting, issue any tax forms, and dissolve the entity. Losses for U.S. partnerships may appear on the K-1.
INVESTING
How long SPVs and funds remain active?
An SPV stays active until its single investment exits and final filings are complete. Funds typically operate for around 10 years, plus possible extensions. Both remain open until all capital is returned and the entity is dissolved.
INVESTING
Process for exiting an investment
Proceeds are received by the SPV or fund and reviewed by the sponsor. Allocations updates accounts, applies the waterfall, and sends payouts. Investors receive statements and, after final distribution, the entity moves to dissolution.
INVESTING
Can non-U.S. investors participate?
Yes, non-U.S. investors join under Regulation S or via Cayman vehicles. They complete W-8 forms plus standard KYC/AML checks. Cayman structures are common for global capital and digital-asset treasury strategies.
INVESTING
How tax documents are delivered?
All tax forms appear in the investor portal. U.S. entities issue Schedule K-1; Cayman vehicles provide annual statements. Documents stay archived for future reference and downloads.
LEGAL, TAX & COMPLIANCE
What legal entities does Allocations form?
Allocations forms Delaware LLCs and LPs for SPVs and Delaware LPs for funds under 3(c)(1) or 3(c)(7). For global pools, it supports Cayman, BVI, and Seychelles entities. Formation, filings, and banking run on the platform.
LEGAL, TAX & COMPLIANCE
What is a Series LLC?
A Series LLC has a master LLC with separate series, each with its own investors, assets, and books. Liabilities stay isolated. It is ideal for managers running many SPVs.
LEGAL, TAX & COMPLIANCE
Tax benefits of a Series LLCat is a Series LLC?
Each series is treated as its own partnership for U.S. federal tax purposes when structured correctly. Income and losses flow only to investors in that series and appear on separate K-1s. Sponsors gain cost efficiency and cleaner separation, though treatment varies by state.
LEGAL, TAX & COMPLIANCE
What is an Exempt Reporting Adviser (ERA)?
An ERA is exempt from full SEC registration but must file a shortened Form ADV. You qualify if you advise only VC funds or have under $150M in U.S. private-fund AUM. Many early-stage SPV and fund managers operate as ERAs until they scale.
LEGAL, TAX & COMPLIANCE
When do I need to file Form ADV?
You must file Form ADV once you rely on an ERA exemption or become a registrable adviser. Initial filings are due when you begin relying on the exemption, and updates are required at least annually and after material changes. Allocations structures compliant vehicles but does not file ADV on your behalf.
LEGAL, TAX & COMPLIANCE
How Allocations handles investor compliance and reporting?
KYC, AML, accreditation checks, and subscriptions are built into onboarding. Form D and Blue Sky filings are coordinated. Statements, distributions, and tax reports are generated in the platform.
LEGAL, TAX & COMPLIANCE
Taxable income vs. accounting income
Accounting income comes from GAAP/IFRS financials; taxable income follows tax rules. Differences arise from timing, deductions, and adjustments. These variations appear on K-1s for SPVs and funds, especially with digital-asset holdings.
LEGAL, TAX & COMPLIANCE
Forms W-8 and W-9
W-9 is for U.S. individuals and entities; W-8BEN and W-8BEN-E certify non-U.S. status. These forms determine withholding and tax reporting. Allocations collects the correct form during onboarding for every investor.
LEGAL, TAX & COMPLIANCE
Can I write off an SPV loss?
A complete SPV loss generally flows through on the K-1 and may be deductible. Actual deductions depend on basis, passive-loss rules, and investor tax circumstances. Investors should confirm treatment with their tax adviser.
LEGAL, TAX & COMPLIANCE
How Allocations handles K-1s?
The platform tracks income, expenses, and allocations throughout the year. It compiles data for K-1 preparation and delivers the final tax package to each investor. All historical K-1s remain archived in the investor portal.
LEGAL, TAX & COMPLIANCE
What is pass-through taxation?
The entity pays no tax; income and losses flow directly to investors. LLCs and LPs taxed as partnerships use this model. It avoids a second tax layer and preserves the character of gains and losses.
LEGAL, TAX & COMPLIANCE
How Allocations ensures SEC and state compliance?
Allocations generates compliant documents and manages investor certifications and filings. It supports Form D, Blue Sky notices, and subscription records. Sponsors remain responsible for choosing exemptions and following solicitation rules.
LEGAL, TAX & COMPLIANCE
What deal leads should know about securities laws?
Deal leads are issuing securities and must understand the relevant exemption. They need to know accreditation rules, verification requirements, and marketing restrictions. These apply whether investing in startups or digital-asset treasury structures.
LEGAL, TAX & COMPLIANCE
How AML compliance works on Allocations?
The platform verifies identity, sanctions status, and beneficial ownership for all investors. Entity investors disclose controlling persons; transactions are monitored. Allocations builds around evolving AML rules for private funds and global/crypto exposure.
LEGAL, TAX & COMPLIANCE
Privacy and data protection on Allocations
Personal data is used only for administering the vehicle and fulfilling legal requirements. Access is restricted to authorized personnel and essential service providers. Allocations aligns with regional regimes such as Cayman DPA for offshore structures.
ALL
SPV BASICS
FUND BASICS
INVESTING
LEGAL, TAX AND COMPLIANCE
SPV BASICS
What is an SPV and how does it work?
An SPV is a legal entity created for a single investment, pooling capital to purchase one asset. It keeps risks isolated from the sponsor’s main business. Once the investment exits, the SPV distributes proceeds and winds down
SPV BASICS
Where SPVs are used?
SPVs are used in venture, secondaries, private credit, real assets, and token-linked rights. They simplify cap tables, support cross-border capital, and isolate risk for specific transactions. Corporates, family offices, and digital-asset treasuries use them to ring-fence and manage strategic holdings.
SPV BASICS
Why investors and founders use SPVs?
Investors get deal-by-deal exposure with clear terms and defined carry. Founders keep one line on the cap table and speed up closing. Digital-asset teams use SPVs to manage custody, token events, and reporting cleanly.
SPV BASICS
How to launch an SPV on Allocations
Allocations handles formation, banking, onboarding, and compliance in one platform. Sponsors start a deal, invite investors, collect capital, and close quickly. The system manages reporting, distributions, tax documents, and wind-down automatically.
SPV BASICS
Benefits of a Series LLC structure
A Series LLC lets multiple SPVs operate under one master entity, each legally separate. Filings and compliance are shared, reducing cost. It scales well for frequent SPV managers.
SPV BASICS
What are Investor rights in an SPV?
Investors own membership interests in the SPV. Rights are defined in the Operating Agreement, Subscription Agreement, and the deal instrument. The SPV manager acts on behalf of investors.
SPV BASICS
How SPVs make money?
SPVs do not produce revenue. They pass investment gains back to investors. Profits come from the exit of the underlying asset. Sponsors earn carry only if the investment gains value.
SPV BASICS
How an SPV runs end-to-end
An SPV is formed, funded by investors, and used to purchase a specific asset. It handles subscriptions, compliance, banking, and ongoing reporting. After the exit, it distributes proceeds and dissolves.
SPV BASICS
What documents are included in an SPV setup?
An SPV includes formation filings, the Operating Agreement, and series designations. Investors sign subscription documents and submit tax and accreditation forms. Allocations coordinates Form D, Blue Sky, and AML/KYC checks.
SPV BASICS
Can international investors participate?
Yes, Allocations supports both U.S. investors under Reg D and non-U.S. investors under Reg S. Every investor completes AML, KYC, sanctions checks, and proper tax forms. Jurisdictions are tracked separately for full regulatory compliance.
SPV BASICS
What are carry and management fees in SPVs?
Carry is a performance fee, commonly 10-20%, taken only on profits. Management fees are uncommon in single-deal SPVs. Allocations calculates, tracks, and distributes fees transparently
SPV BASICS
How Allocations handles distributions and exits?
Proceeds return to the SPV, where the system reconciles payouts automatically. Carry, fees, and pro-rata returns are calculated and wired to each investor. Full transaction records and tax updates appear in the dashboard.
SPV BASICS
Typical costs of launching an SPV
Cost includes platform fees, filings, and banking or tax requirements. Delaware and Cayman entities have fixed annual fees. Allocations provides exact deal pricing by structure and investor mix.
SPV BASICS
What reporting do SPV investors receive?
Investors get dashboards with ownership, funding, and distributions. They receive automated statements, performance updates, and tax documents. All materials remain archived for audit and future reference.
SPV BASICS
When to launch an SPV?
Launch once you have allocation and investor interest. You should know the instrument, timeline, and investor mix. Allocations lets you configure the vehicle and activate it when ready.
SPV BASICS
Single SPV vs. layered SPV
A single SPV invests directly into one deal. A layered structure adds a feeder or master entity for tax treatment, cross-border flows, and investor separation.
SPV BASICS
How does Allocations compare to AngelList or Carta for SPVs?
Allocations provides full-stack automation across formation, banking, onboarding, filings, and taxes. It supports Delaware and Cayman structures. Managers run SPVs and funds from the same system.
FUND BASICS
What is a venture fund?
A venture fund pools capital from LPs and invests across many companies. The GP picks deals, manages the portfolio, and oversees exits. Fees and carry define economics and long-term outcomes.
FUND BASICS
How is a fund different from an SPV?
A fund invests in multiple companies over a defined lifecycle with recurring capital calls and reporting. An SPV invests in one deal, raises once, and distributes once. Managers use funds for core strategy and SPVs for co-invests or special opportunities.
FUND BASICS
How do I form a fund with Allocations?
You define the strategy, structure, and economics. Fund+ generates LPAs, PPMs, subscriptions, and side letters. Once banking opens, LPs onboard digitally and the first close activates deployment.
FUND BASICS
What key fund documents do I need?
A fund uses an LPA for terms, a PPM for risks and strategy, and Subscription Agreements for LPs. Side letters customize terms. Digital asset funds add valuation, custody, and trading clauses.
FUND BASICS
Management fees and carried interest
Management fees fund operations, often charged on commitments early and invested capital later. Carried interest is the GP’s share of profits after returning capital and meeting hurdles. Allocations tracks capital accounts and automates waterfall calculations during distributions.
FUND BASICS
How do Fund LPs differ from SPV investors?
Fund LPs commit to a diversified strategy and expect ongoing calls and reporting. SPV investors choose a single deal, fund once, and wait for one exit. Funds provide breadth and pacing; SPVs offer precision and speed.
FUND BASICS
How are capital calls managed on Allocations?
Managers create capital calls, send notices, and track payments automatically. LPs see all calls, instructions, and confirmations in their portal. Real-time ledgers keep audits and reconciliations clean and efficient.
FUND BASICS
How fund distributions are handled?
Proceeds are received, expenses and carry applied, and waterfalls calculated automatically. Notices and payouts are issued to each LP with full transparency. All statements and proofs remain stored for download.
FUND BASICS
What is a fund administrator and how does Allocations automate it?
A fund admin maintains books, capital accounts, fee schedules, and reporting. Allocations automates these tasks with built-in workflows and service review. Managers and LPs operate from a single, accurate source of truth.
FUND BASICS
Delaware vs. Cayman fund structures
Delaware funds suit U.S. taxable investors and issue K-1s. Cayman funds are tax-neutral and ideal for non-U.S. and U.S. tax-exempt LPs. Both can be paired in master–feeder structures, fully supported by Allocations.
FUND BASICS
Can I raise a fund and SPVs at the same time?
Yes, funds run the main strategy while SPVs capture co-invests or special opportunities. Allocations manages both vehicle types in one account. LPs and investors get consistent onboarding, flows, and reporting.
FUND BASICS
What is a hybrid or parallel fund structure?
Hybrid structures use multiple vehicles for different investor types. Example: Delaware for U.S. taxable LPs and Cayman for non-U.S. or tax-exempt LPs. Both invest side by side with aligned calls, allocations, and waterfalls.
FUND BASICS
Advantages of launching a fund digitally
Digital formation cuts timelines and unifies documents, onboarding, and workflow. Calls, distributions, statements, and tax docs issue from one dashboard. Managers reduce admin overhead and LPs gain full visibility into the fund lifecycle.
INVESTING
What is an accredited investor?
An accredited investor meets SEC income, net-worth, or professional criteria to invest in private offerings. Qualifiers include high income, $1M+ net worth, certain FINRA licenses, or $5M+ entity assets. These standards apply to SPVs, funds, and corporate/digital-asset treasury raises under Regulation D.
INVESTING
Do I need to be accredited to invest in an SPV or fund?
Most deals run under Regulation D. Under 506(c), all investors must be accredited and verified. Under 506(b), accredited investors plus some sophisticated non-accredited investors may join. Sponsors often limit to accredited investors.
INVESTING
How does Allocations verify accreditation?
Investors upload tax returns, brokerage statements, or license records. Allocations reviews documents for 506(c) deals. For 506(b), investor representations and questionnaires are maintained in the portal.
INVESTING
Minimum investment requirements
Sponsors set the minimum. SPVs often have lower minimums. Funds generally require larger commitments. Allocations supports custom tiers.
INVESTING
How returns are calculated and distributed?
Returns follow the Operating Agreement (SPVs) or LPA (funds). Proceeds flow in, expenses and carry are applied, and distributions are made by ownership or capital accounts. Allocations automates ledger updates, waterfall rules, and investor notices.
INVESTING
How carried interest works?
Carry is the sponsor’s share of profits after capital is returned and any hurdle is met. It applies only when a gain occurs. Allocations tracks capital accounts and applies the waterfall so investors see clear breakdowns.
INVESTING
Direct vs. indirect investment
Direct investment means holding the security in your own name. Indirect investment means participating through an SPV or fund. Indirect structures streamline cap tables, taxes, onboarding, and custody.
INVESTING
How to track your portfolio on Allocations?
Investors get a dashboard showing all SPVs and funds. You can view commitments, calls, ownership, distributions, documents, and tax forms. All records stay archived for full historical visibility.
INVESTING
How KYC/AML verification works?
Investors provide identity, residency, and ownership information. Allocations checks sanctions, AML, and tax forms. Cayman vehicles include enhanced due diligence for global investors.
INVESTING
Risks of investing through an SPV?
SPVs are concentrated in one asset. They are illiquid and long-term. They depend on the underlying company or token. Allocations provides clear documents so investors understand the risks.
INVESTING
What happens if an SPV goes to zero?
If the underlying investment fails, the SPV becomes worthless. Sponsors complete final accounting, issue any tax forms, and dissolve the entity. Losses for U.S. partnerships may appear on the K-1.
INVESTING
How long SPVs and funds remain active?
An SPV stays active until its single investment exits and final filings are complete. Funds typically operate for around 10 years, plus possible extensions. Both remain open until all capital is returned and the entity is dissolved.
INVESTING
Process for exiting an investment
Proceeds are received by the SPV or fund and reviewed by the sponsor. Allocations updates accounts, applies the waterfall, and sends payouts. Investors receive statements and, after final distribution, the entity moves to dissolution.
INVESTING
Can non-U.S. investors participate?
Yes, non-U.S. investors join under Regulation S or via Cayman vehicles. They complete W-8 forms plus standard KYC/AML checks. Cayman structures are common for global capital and digital-asset treasury strategies.
INVESTING
How tax documents are delivered?
All tax forms appear in the investor portal. U.S. entities issue Schedule K-1; Cayman vehicles provide annual statements. Documents stay archived for future reference and downloads.
LEGAL, TAX & COMPLIANCE
What legal entities does Allocations form?
Allocations forms Delaware LLCs and LPs for SPVs and Delaware LPs for funds under 3(c)(1) or 3(c)(7). For global pools, it supports Cayman, BVI, and Seychelles entities. Formation, filings, and banking run on the platform.
LEGAL, TAX & COMPLIANCE
What is a Series LLC?
A Series LLC has a master LLC with separate series, each with its own investors, assets, and books. Liabilities stay isolated. It is ideal for managers running many SPVs.
LEGAL, TAX & COMPLIANCE
Tax benefits of a Series LLCat is a Series LLC?
Each series is treated as its own partnership for U.S. federal tax purposes when structured correctly. Income and losses flow only to investors in that series and appear on separate K-1s. Sponsors gain cost efficiency and cleaner separation, though treatment varies by state.
LEGAL, TAX & COMPLIANCE
What is an Exempt Reporting Adviser (ERA)?
An ERA is exempt from full SEC registration but must file a shortened Form ADV. You qualify if you advise only VC funds or have under $150M in U.S. private-fund AUM. Many early-stage SPV and fund managers operate as ERAs until they scale.
LEGAL, TAX & COMPLIANCE
When do I need to file Form ADV?
You must file Form ADV once you rely on an ERA exemption or become a registrable adviser. Initial filings are due when you begin relying on the exemption, and updates are required at least annually and after material changes. Allocations structures compliant vehicles but does not file ADV on your behalf.
LEGAL, TAX & COMPLIANCE
How Allocations handles investor compliance and reporting?
KYC, AML, accreditation checks, and subscriptions are built into onboarding. Form D and Blue Sky filings are coordinated. Statements, distributions, and tax reports are generated in the platform.
LEGAL, TAX & COMPLIANCE
Taxable income vs. accounting income
Accounting income comes from GAAP/IFRS financials; taxable income follows tax rules. Differences arise from timing, deductions, and adjustments. These variations appear on K-1s for SPVs and funds, especially with digital-asset holdings.
LEGAL, TAX & COMPLIANCE
Forms W-8 and W-9
W-9 is for U.S. individuals and entities; W-8BEN and W-8BEN-E certify non-U.S. status. These forms determine withholding and tax reporting. Allocations collects the correct form during onboarding for every investor.
LEGAL, TAX & COMPLIANCE
Can I write off an SPV loss?
A complete SPV loss generally flows through on the K-1 and may be deductible. Actual deductions depend on basis, passive-loss rules, and investor tax circumstances. Investors should confirm treatment with their tax adviser.
LEGAL, TAX & COMPLIANCE
How Allocations handles K-1s?
The platform tracks income, expenses, and allocations throughout the year. It compiles data for K-1 preparation and delivers the final tax package to each investor. All historical K-1s remain archived in the investor portal.
LEGAL, TAX & COMPLIANCE
What is pass-through taxation?
The entity pays no tax; income and losses flow directly to investors. LLCs and LPs taxed as partnerships use this model. It avoids a second tax layer and preserves the character of gains and losses.
LEGAL, TAX & COMPLIANCE
How Allocations ensures SEC and state compliance?
Allocations generates compliant documents and manages investor certifications and filings. It supports Form D, Blue Sky notices, and subscription records. Sponsors remain responsible for choosing exemptions and following solicitation rules.
LEGAL, TAX & COMPLIANCE
What deal leads should know about securities laws?
Deal leads are issuing securities and must understand the relevant exemption. They need to know accreditation rules, verification requirements, and marketing restrictions. These apply whether investing in startups or digital-asset treasury structures.
LEGAL, TAX & COMPLIANCE
How AML compliance works on Allocations?
The platform verifies identity, sanctions status, and beneficial ownership for all investors. Entity investors disclose controlling persons; transactions are monitored. Allocations builds around evolving AML rules for private funds and global/crypto exposure.
LEGAL, TAX & COMPLIANCE
Privacy and data protection on Allocations
Personal data is used only for administering the vehicle and fulfilling legal requirements. Access is restricted to authorized personnel and essential service providers. Allocations aligns with regional regimes such as Cayman DPA for offshore structures.
Allocations secondary market is operated through Allocations Securities, LLC dba AllocationsX, member FINRA/SIPC. To check this firm on BrokerCheck, click on the following link: here. The main FINRA website can be accessed through this link: here. Allocations Securities, LLC is a wholly owned subsidiary of Allocations, Inc.
Copyright © Allocations Inc
Allocations secondary market is operated through Allocations Securities, LLC dba AllocationsX, member FINRA/SIPC. To check this firm on BrokerCheck, click on the following link: here. The main FINRA website can be accessed through this link: here. Allocations Securities, LLC is a wholly owned subsidiary of Allocations, Inc.
Copyright © Allocations Inc
Allocations secondary market is operated through Allocations Securities, LLC dba AllocationsX, member FINRA/SIPC. To check this firm on BrokerCheck, click on the following link: here. The main FINRA website can be accessed through this link: here. Allocations Securities, LLC is a wholly owned subsidiary of Allocations, Inc.
Copyright © Allocations Inc