What are Roll Up Vehicles (RUV)?

RUVs are Special Purpose Vehicles that allow founders to consolidate multiple investors into a single entity (i.e. RUV), which then signs the investment documents and sends a single wire to the company. It saves founders (and you) the hassle of collecting funds and signatures from many individuals. AngelList handles the entity formation, collection of funds, and post-investment activities for the lifetime of the RUV.

RUVs are structured as series Delaware Limited Partnerships. Each RUV is a distinct series under a Master Partnership called “Roll Up Vehicles, LP”.

An example RUV legal name would be “LD Fund I, a series of Roll Up Vehicles, LP”. This is the entity name that will appear on the company’s cap table and signn the investment documents.

The fund’s general partner is Fund GP, LLC, an AngelList affiliate. The RUV’s Investment Adviser is AngelList Advisors, LLC (unless otherwise indicated). RUVs are administered by Belltower Fund Group, AngelList’s preferred fund administrator.

How are these legally different from normal AngelList SPVs?

RUVs utilize the same AngelList SPV documents, which you may have seen before, but without formal advisory involvement from an external third party (specifically, the RUV offering does not involve a “Fund Lead” or “Sub-Adviser” and there is no carry charged on the vehicle).

Rather, AngelList Advisors, LLC, performs the role of an Investment Adviser, that acts in the best interest of the investors in the RUV. Any decisions are based on standard market practices, that aligns with similarly situated shareholders.

How easy is it for me as an investor?

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 ACH, Wire or Crypto.

Are RUVs good for the company?

Yes, we find that companies often save tens of thousands of dollars when they do the math on cap table costs and future cap table cleanliness. More importantly, they have a cleaner cap table, which positions them better for future fundraises or M&A transactions. Our estimations, suggest that a seed stage company that is considering using an RUV for 45 angels will save $75,000 over the lifetime of the company (when compared to the costs of allowing 45 direct investments).

Is this different from making a direct investment?

Yes. It is different than making a direct investment because of the structure of investing into a vehicle (RUV), which then makes the investment. The vehicle becomes the legal owner and the investment adviser makes future decisions, such as voting.

How much does an RUV cost?

The cost of the RUV is generally paid for by the company, so you often incur no additional cost for your investment. Any potential state filing fees (i.e. Blue Sky Fees) are also paid for by the company.

Do I need to be accredited?

Yes. All investors in AngelList RUVs must be accredited. For most Roll Up Vehicles, a self attestation of accreditation status is collected during the investment process.

Does AngelList perform a KYC check?

Once you complete 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.

If you’re 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 you are investing with, and can be reused for future investments.

What other information do I need to provide?

Other than name, address, date of birth, social security number/tax identification number, you may be prompted to provide a valid government-issued ID.

If you’re investing as an entity, you may have to provide additional information about the company and beneficial owners depending on the entity type and where it’s domiciled. You may also be prompted to provide incorporation documents. our KYC team will follow up over email asking for any such additional information required.

What documents will I sign?

As an investor in the RUV, you do not sign the actual investment docs (like a share purchase agreement or a SAFE), instead by closing online, you subscribe to the special purpose vehicle (i.e. the RUV) which is the entity that will sign the actual investment docs with the company.

Specifically, you are e-signing (on AngelList) RUV closing documents that consist of:

  1. The (RUV) Limited 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.

Here’s the default RUV closing docs if you’d like to review: draft-ruv-closing-docs.zip

Once the RUV is finalized, you will be able to access the executed RUV closing documents from your AngelList Investor Dashboard.

Will I get a copy of the financing documents?

No, we generally do not share the actual company financing docs with RUV investors, though you may ask the company for those documents.

As the Investment Adviser, AngelList reviews the financing documents before signing them, to ensure the terms match what the company disclosed to you on the platform. If there is a divergence, we’ll notify you before closing and provide you an opportunity to opt-out of the investment in the RUV.

What if the investment terms are changed after my commitment?

If any of the material investment terms that were disclosed to you at the time of your commitment, change after, we will send you a notice and provide an option to opt-out of the investment.

Examples of changes that would mandate an option to opt-out:

  • Instrument changes

  • Valuation changes

  • Discount changes

  • Lead investor changes

  • Loss of pro-rata rights

Will I be entitled to a token warrant if the deal’s terms included one?

If the deal includes a token warrant, the RUV will purchase one token warrant, unless stated otherwise. If the company plans to distribute tokens in kind, they will be distributed directly to you by the company. If its a cash distribution, the tokens may be sold for USD, with the proceeds sent to us for distribution back to you, the investors.

Will I receive a K-1?

The RUV will issue a K-1 to you, but it generally will be a $0 K-1 in the first year (we are required to create one in the first year of the RUV). Future years will only have a K-1 issued if there is a distribution or other taxable activity. (More Tax FAQs answered here)

Do QSBS benefits flow through to investors?

RUVs are Delaware Limited Partnerships which are pass through entities, so any eligible QSBS benefit or other benefits would flow through when investing in an RUV*.

*Not tax advice. Consult your own tax advisor.

Are there transfer restrictions on the members?

Yes. You generally will not be able to freely sell or have your investment redeemed. The RUV is a good instrument for long-term investors. The RUV template documents contains customary transfer restrictions that prevent limited partners in the RUV from transferring their interests in most cases. These are specified in Article 6 of the LPA.

That said, the LPA allows for transfers to be done for estate planning purposes. In those cases, email invest@angellist.com to initiate a transfer and we’ll guide you through the process.

We recommend investing through an entity structure if you anticipate needing flexibility in ownership.

What about liquidity & exits?

If secondary liquidity is presented to the SPV by the company, the investment adviser will generally not sell shares in a secondary. For an exit, when we receive distribution proceeds, we will distribute them to LPs. In some cases (like an IPO or acquisition by a public company), we may directly disburse stock to the brokerage accounts of the RUV members, depending on the feasibility, volume, and fees associated with the transaction.

Why would I not invest in the RUV?

If both parties want the investor to be able to directly negotiate with the founder in the future for sign offs, we would recommend that the investor should make a direct investment into the company instead of through a RUV. Institutional investors may not be able to give up their voting rights and may be required to invest directly.

If you have any further questions, you may email us at rollups@angellist.com