For Investors
RUV FAQ for Investors
Understanding RUVs
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 from managing multiple investors’ paperwork and legal costs, both now and in future rounds. AngelList handles the entity formation, collection of funds, tax filings, and post-investment activities for the lifetime of the RUV.Ready to Invest?
- Click here for visual guides to help complete your investment in the RUV.
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.What is the legal structure 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 sign 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 are specifically designed for companies, in a way that addresses important compliance and conflict of interest issues. While, AngelList SPVs are more suited for venture funds and syndicates. 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 management fees or 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.What is the difference between investing direct vs through an RUV vs through an SPV?
| Direct | RUV | SPV | |
|---|---|---|---|
| Investment Position | Direct shareholder on cap table | Limited partner in RUV | Limited partner in SPV |
| Costs | • Low up-front costs to company & investor • Legal costs for company in future rounds | • Zero Investor fees • Company pays one-time fee for lifetime RUV management | Company pays no fee • Investor pays: • Admin fees • Management fees • Carried interest |
| Ownership & Returns | 100% ownership of invested amount | 100% ownership of invested amount (full investor economics preserved—no fees or carry) | Investors ownership & returns are reduced by Admin Fees_,_ Management Fees, and Carried Interest |
| Administration | Self-managed | Centralized through AngelList’s full-service platform | SPV admin |
| Decision Making | Investor | Professional management by AngelList’s investment advisor* (following standardized process) | SPV lead |
| Voting Rights Control | Investor | • Non-material: Company • Material: AngelList’s investment advisor* | SPV lead |
| Follow-on Management | Self-managed | Professional management by AngelList | SPV lead |
| Pro-Rata Rights | • Direct negotiation with company • Individual responsibility | Not available | Lead negotiates & decides participation |
| Pay-to-Play | • Direct obligation to participate • Individual responsibility | Not available | Lead decides & may require additional capital |
| Exit Management | Self-managed | Professional management by AngelList’s full-service platform | SPV lead |
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).When should I consider direct investment instead of an RUV?
Consider direct investment if you and the company want to maintain direct negotiations for future decisions, or if you’re an institutional investor who cannot delegate voting rights, or your investment mandate requires direct ownership.General Requirements
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.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?
Yes. We verify investor identity as required by law. After completing the investment flow, we automatically verify individual investors using their name, address, and date of birth. For entity investors that don’t pass automatic verification, our KYC team will request additional documentation via email. Once verified, you can reuse this KYC approved-entity for future investments.What information do I need to provide for KYC?
For individual investors: Name, address, date of birth, social security number/tax ID, government-issued ID (if requested). For entity investors: Entity details and documentation, beneficial owner information, additional documents based on entity type and jurisdiction.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.Investment Documents
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:- 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.
- The (RUV) Subscription Agreement and Privacy Notice
- This document outlines the mechanics that surround the flow of funds to the RUV.
- 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.
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: changes to funding instrument, valuations, discount, lead investor/financing info, or changes to investor rights.Rights & Restrictions
How does the Voting Proxy work?
The proxy gives the company the right to vote on behalf of the RUV for non-Material Matters. For Material Matters, AngelList as the Investment Adviser makes the voting decisions based on standard market practices and aligns with similarly situated investors.Material Matters can generally be separated into two categories:1. Anything impacting the rights privileges and responsibilities of the investors
(Ex: If the preferred stock that investors acquire comes with certain rights and there is an instance where they could potentially lose those rights).2. Any changes to the company
(Ex: If the company is preparing for IPO, going for a merger or major corporate restructuring, such as when the company is splitting off or rolling into another entity).
How are pro-rata rights handled?
RUVs do not have pro-rata rights in the portfolio company’s future financing rounds. While some companies may offer pro-rata rights, these can be waived or removed at the company’s discretion.What about pay-to-play provisions?
RUVs do not participate in pay-to-play provisions. This means you will not be subject to or responsible for pay-to-play obligations through your RUV investment.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 warrant for the vehicle, unless stated otherwise. At exercise:- If the company plans to distribute tokens in kind, they will be distributed directly to you by the company, or
- If its a cash distribution, the tokens may be sold for USD, with the proceeds sent to AngelList, who in turn will distribute the proceeds back to you (RUV investors).
Are there transfer restrictions on the members?
Yes. Generally, you 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.If you might need ownership flexibility, we recommend investing through an entity structure (like a jointly owned entity) rather than planning to transfer later.
What about liquidity & exits?
If secondary liquidity is presented to the RUV 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.Tax & Reporting
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.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.Other Help Center Articles that may be useful:
- What are the tax consequences for non-U.S. investors?
- I’m foreign. Do I need to file a US tax return?
- When will I receive my K-1 for the prior tax year?
- My tax package says I won’t receive a K-1 for the year, why not?
Need more help?
Browse more FAQs about Account Settings, Funding Investments, Portfolio Management, Transfers, Distributions, Withdrawals, Legal, Regulatory, & Taxes.
Have other questions? Email us at rollups@angellist.com