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Frequently asked questions and

glossary of terms

FAQ's

What is SVLA?


SV Links Angels is the investment arm of SV Links programs. SV Links is a non-profit organization that connects entrepreneurs from around the world to Silicon Valley. We provide exclusive investment opportunities in technology startups in the innovation capital of the world.




What is the duration of the investment?


The documents stipulate 10 years as a limit. In past investments, our experience has been: the investment in Loki Studios recovered and returned in 12 months, although this is exceptional. In other investments in which people from our network participated, returns have been recovered in a time frame of about 3-5 years, when there have been returns.




What are the criteria followed by SV Links Angels when investing?


● The person. His career, experience, professional and moral reputation, his network, skills and technical knowledge. Fortunately, being in Silicon Valley allows us to know first-hand
entrepeneurs work and fulfill the skills and potential we seek.

● The market. Sectors that are growing, markets that are at least $1 billion dollars and that the entrepreneur has a clear strategy to penetrate the niche he wants to access from that market. ● The product. It needs to be easily adjustable to what the market demands, and the
entrepreneur has the ability to adapt it quickly.




What is the minimum investment amount?


Since the management fee is the same regardless of the amount invested, it is recommended to invest an amount greater than $10,000 USD. In SV Links Angels we seek that for each investment opportunity at least $375,000 USD is raised among the entire group.




Does my investment go directly to the startup?


No, SV Links Angels creates an SPV (Special Purpose Vehicle) in the State of Delaware that functions as a company or trust that collects contributions from a group of investors. This common fund is the one that invests in the startup.




How is the money transfer done?


The investor transfers the money to a bank account in the United States by wire transfer through his or her local bank.





What is the management fee?


Each investment by SV Links Angels involves the creation of a new "LLC" type company. We'll need to keep it operating during the investment. This new entity is the one that will invest in the company. In addition to that, the review of the legal documents by the lawyer to set up the entity. This cost can represent up to 20% of the investment if the company does not have an exit before 10 years. The 10 year management fee is withheld from each investor's contribution to guarantee the operation of the investment.




What is the agreement between investors and managing partners?


The investor is called LP (Limited Partner). The managers of the investment are the MP
(Managing Partners). In this industry the standards are that of each investment, 80%
goes to the investors and 20% to the managers.




What is a term sheet?


It is a document that specifies the basic information of the investment, such as the
amounts, valuation of the company, share prices, conditions, terms and discounts of
the investment. It is not a legal document; however, it contains the required
information for the lawyers to prepare the proper documentation.




What is the contract that the company delivers for the investment?


● It can be a convertible note, where a cap is established for the valuation of the company, as well as a discount on its valuation and an interest rate associated with the period of the
note before they become preferred stock.

● It can also be a SAFE (Simple Agreement for Future Equity). An agreement that happens between a company and an investor, which the investor issues capital and the company issue a stock in return with no interest unlike convertible notes.
● The instrument will totally depend on the company raising the funds. It can either be a
convertible note, or a SAFE (simple agreement for future equity). Both of them will be
made through an SPV (special purpose vehicle), where SV Links creates an entity and
that entity invests in the final company.




Do I have to declare my investment in the United States?


An investor should declare his investment in the United States only if he has tax residency in this country. Otherwise, there is no need to make a declaration of such investment.




Do I have to pay taxes if I get a return on my investment?


Yes, the investor must pay taxes in his or her country of tax residence. Each country has its own agreements before the law for tax collection.





Angel Investors


An angel investor is a high net worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company.




App


A software application that is designed to be downloaded into a mobile device and be
used by customers or businesses.




Carry


The percentage that Venture Capital funds will take on the extra returns in a company.
The industry standard is 20%.




Convertible notes


A short-term debt that can be converted into equity in the future, it includes interest.




Common stock


A security that represents ownership in a corporation. Holders of common stock elect the board of directors and vote on corporate policies.




Crowdfunding


Raising money from a large number of people asking them for small amounts of money to fund a project or a business.




Demo Day


An event that is organized by incubators, accelerators, or founders where they can
pitch their business project in a room full of investors.




Dilution


The decrease in the shareholder’s ownership in a company when raising new funds.




Seed capital


It refers to the type of financing used in the formation of a startup. Funding is provided by private investors—usually in exchange for an equity stake in the company or for a share in the profits of a product.




Fundraising


The process of generating money from investors in order to build a business.




General Partner (GP) and Managing Partner (MP)


A general partner is an owner of a partnership who has unlimited liability. A general partner is also usually a managing partner and active in the day-to-day operations of the business. A managing partner is roughly equivalent to a chief executive officer of a corporation in terms of duties and responsibilities, but in a partnership or small firm and not a corporation.





¿Cuál es la comisión de gestión (management fee)?


Cada inversión de SV Links Angels implica la creación de una nueva empresa del tipo "LLC" y mantenerla operando durante la inversión. Esta nueva entidad es la que invertirá en la empresa. Además, la revisión de los documentos legales del abogado para poner la entidad en marcha. Este costo puede representar hasta el 20% de la inversión si la empresa no tiene un salida antes de los 10 años. La tarifa de gestión de 10 años se retiene del aporte de cada inversor para garantizar el funcionamiento de la inversión.




¿Cuál es el acuerdo entre inversionistas y los gestores de las inversiones?


El inversionista toma el rol de LP (Limited Partner). Los gestores de la inversión funjen como MPs (Socios directores). En SV Links Angels utilizamos los estándares de la industria de cada inversión, 80% va a los inversionistas y el 20% a los gestores.




¿Qué es una hoja de términos?


Es un documento que especifica la información básica de la inversión, tales como los montos, valuación de la empresa, instrumentos, condiciones, plazos y descuentos de la inversión. No es un documento legal; sin embargo, contiene los requisitos información para que los abogados preparen la documentación adecuada.




¿Cuál es el contrato que entrega la empresa por la inversión?


● En el caso de una Nota Convertible, es un pagaré convertible, donde se establece un tope para la valoración de la empresa, según así como un descuento en su valoración y una tasa de interés asociada al período de la tenga en cuenta antes de que se conviertan en acciones preferentes. ● En un SAFE (acuerdo simple para capital futuro) se establece un acuerdo entre la empresa y el inversionista de convertir el dinero aportado en acciones de la empresa en una ronda futura con un tope de valuación de la empresa o bien con un descuento en el valor de las acciones en el momento de la conversión. ● El instrumento dependerá totalmente de la empresa que obtenga los fondos. Puede ser un nota convertible o SAFE (acuerdo simple para capital futuro). Ambos serán realizados a través de un SPV (vehículo de propósito especial), donde SV Links crea una entidad y esa entidad invierte en la empresa final.




¿Debo declarar mi inversión en los Estados Unidos?


Un inversionista debe declarar su inversión en Estados Unidos solamente si tiene residencia fiscal en este país. De lo contrario, no existe la necesidad de hacer una declaración de dicha inversión.




¿Debo pagar impuestos en caso de obtener retornos de mi inversión?


Si, el inversionista debe pagar impuestos en su país de residencia fiscal. Cada país tiene sus propios acuerdos ante la ley para la recaudación tributaria.





Glossary

Angel Investors


An angel investor is a high net worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company.




App


A software application that is designed to be downloaded into a mobile device and be
used by customers or businesses.




Carry


The percentage that Venture Capital funds will take on the extra returns in a company.
The industry standard is 20%.




Convertible notes


A short-term debt that can be converted into equity in the future, it includes interest.




Common stock


A security that represents ownership in a corporation. Holders of common stock elect the board of directors and vote on corporate policies.




Crowdfunding


Raising money from a large number of people asking them for small amounts of money to fund a project or a business.




Demo Day


An event that is organized by incubators, accelerators, or founders where they can
pitch their business project in a room full of investors.




Dilution


The decrease in the shareholder’s ownership in a company when raising new funds.




Seed capital


It refers to the type of financing used in the formation of a startup. Funding is provided by private investors—usually in exchange for an equity stake in the company or for a share in the profits of a product.




Fundraising


The process of generating money from investors in order to build a business.




General Partner (GP) and Managing Partner (MP)


A general partner is an owner of a partnership who has unlimited liability. A general partner is also usually a managing partner and active in the day-to-day operations of the business. A managing partner is roughly equivalent to a chief executive officer of a corporation in terms of duties and responsibilities, but in a partnership or small firm and not a corporation.





Angel Investors


An angel investor is a high net worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company.




App


A software application that is designed to be downloaded into a mobile device and be
used by customers or businesses.




Carry


The percentage that Venture Capital funds will take on the extra returns in a company.
The industry standard is 20%.




Convertible notes


A short-term debt that can be converted into equity in the future, it includes interest.




Common stock


A security that represents ownership in a corporation. Holders of common stock elect the board of directors and vote on corporate policies.




Crowdfunding


Raising money from a large number of people asking them for small amounts of money to fund a project or a business.




Demo Day


An event that is organized by incubators, accelerators, or founders where they can
pitch their business project in a room full of investors.




Dilution


The decrease in the shareholder’s ownership in a company when raising new funds.




Seed capital


It refers to the type of financing used in the formation of a startup. Funding is provided by private investors—usually in exchange for an equity stake in the company or for a share in the profits of a product.




Fundraising


The process of generating money from investors in order to build a business.




General Partner (GP) and Managing Partner (MP)


A general partner is an owner of a partnership who has unlimited liability. A general partner is also usually a managing partner and active in the day-to-day operations of the business. A managing partner is roughly equivalent to a chief executive officer of a corporation in terms of duties and responsibilities, but in a partnership or small firm and not a corporation.





Angel Investors


An angel investor is a high net worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company.




App


A software application that is designed to be downloaded into a mobile device and be
used by customers or businesses.




Carry


The percentage that Venture Capital funds will take on the extra returns in a company.
The industry standard is 20%.




Convertible notes


A short-term debt that can be converted into equity in the future, it includes interest.




Common stock


A security that represents ownership in a corporation. Holders of common stock elect the board of directors and vote on corporate policies.




Crowdfunding


Raising money from a large number of people asking them for small amounts of money to fund a project or a business.




Demo Day


An event that is organized by incubators, accelerators, or founders where they can
pitch their business project in a room full of investors.




Dilution


The decrease in the shareholder’s ownership in a company when raising new funds.




Seed capital


It refers to the type of financing used in the formation of a startup. Funding is provided by private investors—usually in exchange for an equity stake in the company or for a share in the profits of a product.




Fundraising


The process of generating money from investors in order to build a business.




General Partner (GP) and Managing Partner (MP)


A general partner is an owner of a partnership who has unlimited liability. A general partner is also usually a managing partner and active in the day-to-day operations of the business. A managing partner is roughly equivalent to a chief executive officer of a corporation in terms of duties and responsibilities, but in a partnership or small firm and not a corporation.





Angel Investors


An angel investor is a high net worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company.




App


A software application that is designed to be downloaded into a mobile device and be
used by customers or businesses.




Carry


The percentage that Venture Capital funds will take on the extra returns in a company.
The industry standard is 20%.




Convertible notes


A short-term debt that can be converted into equity in the future, it includes interest.




Common stock


A security that represents ownership in a corporation. Holders of common stock elect the board of directors and vote on corporate policies.




Crowdfunding


Raising money from a large number of people asking them for small amounts of money to fund a project or a business.




Demo Day


An event that is organized by incubators, accelerators, or founders where they can
pitch their business project in a room full of investors.




Dilution


The decrease in the shareholder’s ownership in a company when raising new funds.




Seed capital


It refers to the type of financing used in the formation of a startup. Funding is provided by private investors—usually in exchange for an equity stake in the company or for a share in the profits of a product.




Fundraising


The process of generating money from investors in order to build a business.




General Partner (GP) and Managing Partner (MP)


A general partner is an owner of a partnership who has unlimited liability. A general partner is also usually a managing partner and active in the day-to-day operations of the business. A managing partner is roughly equivalent to a chief executive officer of a corporation in terms of duties and responsibilities, but in a partnership or small firm and not a corporation.





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