Setting up an RUV

Step-by-step process for running an RUV

1. Submit a setup form ruv.new. This involves sharing the company's legal name and the round terms.
2. We review your information to see if we can support your company and create your dashboard.
3. We approve the RUV, which means you can start inviting your investors through invite links and add a deal memo.
4. You invite your investors by sharing the invite links with them.
5. Investors close into the RUV & wire money to AngelList.
6. We collect all funds & perform a KYC check on each investor.
7. You track all of that in your dashboard (which investors have signed, whose wire is pending, etc). AngelList follows up with investors for information if necessary.
8. Once you want to close, click the "Ready to Close" button on your deal page and send the investment documents to rollups@angel.co.
9. AngelList signs the investment docs, wires the money to the company, and finalizes the RUV.

Requirements for International Companies

Foreign companies need to make tax representations (PFIC & CFC) & sign a side letter with the fund.

In an attempt to tax income generated abroad and fight tax evasion, the IRS enacted several rules that US taxpayers, or US incorporated funds for that purpose, are subject to. Two of those rules are particularly important for your RUVs - the Passive Foreign Investment Company taxation regime ("PFIC") and the Controlled Foreign Corporation status ("CFC").

In order for your RUV to file its taxes correctly and for your investors to file their taxes correctly, we need to know:

1. Whether the company you're investing in is a PFIC or a CFC;
2. Once the company becomes a PFIC or CFC;
3. Certain additional information for tax returns, should the company be a PFIC or CFC

Sometimes companies will make representations about their PFIC/CFC status in their main investment docs (usually in the "Investor Rights Agreement"). If not, we can capture these representations via our standard tax side letter:

In short, by signing the letter, the company represents that it is neither majority-owned by US persons and that they don't earn a majority of their income from rent or interest (i.e. aren't a passive income generating company). The second part of the document lays out what they would need to report if they ever became a 'passive foreign investment company'.

How fast can AngelList setup my dashboard?

Once we have all of the information we need and have confirmed we are able to run your RUV, we can typically make your dashboard live within 2 business days.

When do I share the the Investment Documents?

When closing, we will need the investment docs to review & sign.

Investors in the RUV are not signing the investment docs when they commit to the RUV. Instead, they are electronically signing documents that subscribe them to a special purpose vehicle ("SPV"). You can see an overview see a sample set of the docs in the following sections.

Overview of the docs

Investors electronically (through the platform flow) sign documents that subscribe them to a special purpose vehicle (the RUV). This closing packet consists 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.

How to Navigate the Dashboard

Basic Info

You can see the terms of the deal you set for investors in the RUV section of your round under RUV summary.

You can make changes to your RUV terms at any point during the raise by clicking the pencil icon next to the close date or clicking Customize RUV.

Co-Investors

You can list all of your co-investors and the amount they invested in the round. Note - all investors added to this list must be investing on the same terms as this RUV. If this is not the case, do not add the co-investor to this list.

Memo

Share a note with investors about the company and the round. We also recommend adding a pitch deck. Here is a template you can use.

Risks & Disclosures

This should not be removed as this is a requirement from our legal team. However, you are free to add more Risk disclosure that are more specific to your company. Here is an example:

Other disclosures is where we disclose that we will proxy the voting rights to an employee of the company.

How does the Voting Proxy work?

The proxy gives you the right to vote on behalf of the entire RUV for non Material matters (see a definition of “Material Matter” in the proxy).

What would be considered a Material Matter

Material matters can generally be separated into two categories:

1- Anything impacting the rights privileges and responsibilities of the stockholders. Ex: If the preferred stocks investors acquire come with certain rights and there is an instance where they could potentially lose these rights.

2-Any changes to the company. An example would be IPO, merger or major corporate restructuring (the company splitting off or rolling into another entity).

Below is a sample of the Proxy.

How do I invite investors to my RUV?

Click the Edit button at the top of the page to copy the link you can share with investors. There are three pre-set links for default investment minimums and maximums. If you'd like to set a custom investment minimum and maximum, click the Create New Link.

Preview

To preview what your investors might see, copy and paste the invite link into your browser. Click that you are an accredited investor to be taken to the investment page.

Overview

Raised

This is how much has been received from the investor that have gone through the flow. We will hold these funds in escrow until we are ready to close the RUV.

Committed

This is how much investors have signed and committed to the RUV.

Target Raise

This is how much of the round was allocated to the RUV. You can change this amount at any point during the raise.

Invited Investor

Invited

Here you will see a list of all the investors you have invited to your Syndicate.

Viewed

These are all the investors that have received and clicked the link to your RUV. The investors in this category can choose to invest or pass on the opportunity.

Signed

These are the investors that have e-signed the docs. If investors are in this stage, this means that there are action items pending on their end.

Completed

Once we've received the investors commitment and they have completed KYC, they will automatically be moved to the Completed column.

Passed

Investors who have Passed on the investment opportunity will be moved to this column.

Canceled

The investors that have requested to cancel their investment in the RUV, or that you have requested we remove, will be moved here.

Documents

You can download the RUV closing docs here. Once the RUV is finalized the fully executed docs will be available for download here.

FAQs

Can I add people to manage the RUV?

You can grant team members access from your Dashboard.

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. My tax package says I won't receive a K-1 for the year, why not?
4. Taxes FAQ

Fees and Economics

Stack Companies

No-fee RUVs are available for companies who have their cap table on AngelList Build's Growth Plan. The only cost you will be responsible for are the Blue Sky filing costs (typically than less $1k) which we will file, pay on your behalf, and invoice you for once the RUV is finalized.

For Other Companies

In some cases, companies with active RUVs can move their cap table to AngelList Build. Reach out to our team at rollups@angel.co to find out if you qualify.

State Regulatory Fees

• State and provincial regulatory filings are required by securities regulators in the US and Canada. In the US, state regulatory fees are known as blue sky filing costs.

• These regulatory fees vary based on the geographic makeup of investors in the RUV. The total median fee is around $1,000, but can range up to $4k.

• Not paid to AngelList. AngelList collects these fees and pays them to the state security regulators to cover the cost of the required notice filings.

• States and provinces may increase their regulatory fees year-to-year.

How are State Regulatory Fees Determined?

Blue sky laws differ from state to state, so the fees will vary depending on the geographic makeup of investors in the RUV. We’ve included a breakdown of state-by-state blue sky filing costs at the bottom of this article. Canadian filing fees are similar, varying province-by-province.

We calculate the fee for each investor in your RUV based on where their investing entity is located. This means the filing fees increase with each additional investor, and the cost for each investor will vary depending on the location of their investing entity.

What are Blue Sky Laws?

Blue sky laws are state-level regulations intended to protect investors against securities fraud by requiring certain securities issuers (e.g., funds) to register and disclose the specifics of the security offering. Most of our RUV offerings qualify for blue sky law exemptions, but do not bypass state filings. To learn more about blue sky laws, read our Education Center article.

Regulatory Filing Fees by Location

Unless stated otherwise, the filing fee is charged if any investors from that state or province invests in the RUV.

Table updated: 7/14/22

When will I get my invoice

Once the RUV is Finalized, typically 1-2 weeks after we close, you will receive an email with an invoice and wire instructions

Fees & Economics"

Here are the articles in this section: