CAPLINX

Late Stage Private Companies ("Unicorns"):  

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• Direct Transfer/Sale    A direct transfer is the quickest and cleanest transaction structure. In a direct transfer, the buyer pays the entire purchase price up front and in cash to the seller. A direct purchase holds the least counterparty risk but results in fewer liquidity options because it can only occur in the absence of certain transfer restrictions. 

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• SPV's   SPVs are entities created for the singular purpose of holding the shares of securities of an underlying issuer company. Essentially, it is an investment fund with a one-company “portfolio”. 

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• Hypothecation    A hypothecation structure may be utilized to allow a shareholder to gain liquidity under circumstances in which the transfer of ownership of the shares is not possible. In a hypothecation, the shareholder pledges the shares as collateral for a nominal interest loan from a creditor. The loan amount corresponds to the current market value of the shares of the securities. If or when the restrictions on transfer of the shares are lifted, the creditor calls the loan, and the shareholder officially transfers title to the shares over to the creditor.  ​