Glossary of Terms
Account Incomplete:
This status denotes that the investor is yet to complete their account setup with Odin before committing to the deal.
Accredited Investor:
A catch-all term for the two investor classes that can invest in deals on the Odin platform (High Net Worth Individuals and Self-Certified Sophisticated Investors). An investor must meet certain criteria established by the Financial Conduct Authority (FCA) to meet either definition. Criteria for Accredited Investors is slightly different in the USA compared to the UK.
Acquisition:
A specific type of exit event in which a single buyer agrees to purchase the Investee Company and acquire all of its share capital.
Advanced Assurance:
Confirmation provided to an investee company by HMRC that an investment into the company is likely to qualify for tax relief under EIS, SEIS, or both schemes. It does not guarantee that the investment in question will meet the conditions, but is often used by Founders to attract new investors.
Advance Subscription Agreement (ASA):
An investment agreement that enables investors to subscribe ‘in advance’ for equity in the investee company. Capital is provided to the company immediately, and a fixed (longstop) date is agreed at which point the investors will receive shares. The conversion of an ASA is usually triggered by a new funding round prior to the longstop date.
Allocation:
A term used to refer to the proportion of a company’s overall funding round that a specific party is covering. For example, if a company is raising £3,000,000 in a Seed round, and allocates 10% of the round to a Syndicate, that Syndicate Lead’s allocation into the deal is £300,000.
All Funds In:
A term which refers to a deal state in which all funds have been raised from the Syndicate Investors and are ready to be deployed to the investee company.
Alternative Investment Fund Management (AIFM):
Refers to legal persons whose regular business is managing one or more Alternative Investment Fund (AIF) schemes.
AML:
‘Anti Money Laundering’. Refers to a set of procedures, laws and regulations which make it more difficult to hide and obscure the proceeds of crime. AML helps to detect and report suspicious activity, including the predicate offences to money laundering and terrorist financing, such as securities fraud and market manipulation. Odin carries out stringent AML policies in addition to its KYC and KYB policies.
Anti-Portfolio:
The section of the Odin platform where deals an investor has ‘passed’ on are stored.
Apostille:
The authentication of a document for use in another country, usually confirming that the signature, seal or stamp from the document’s country of origin is genuine and can be accepted when presented in another country.
Articles of Association:
The written rules that set out how a specific company will be run, agreed to by the company’s directors, shareholders, guarantors and the company secretary.
Asset:
An item of property owned by an individual or business entity, such as a house or an equity stake in a private company.
Authorised Signatory:
An individual who has been given the right to sign (individually or jointly) on behalf of another individual or company, in relation to select matters.
Awaiting AML:
This status denotes that the investor is yet to submit their Source of Wealth information for anti-money laundering purposes.
BaFIN:
The financial regulatory authority in Germany, which supervises the German financial sector to ensure that it functions properly and safely.
Bare Trust:
A basic trust in which the beneficiary has the absolute right to the capital and assets within the trust, as well as the income generated from it. Odin utilises a Bare Trust structure to facilitate SPVs.
Base Pricing:
Odin’s lowest tier of Syndicate pricing. Base pricing incurs deal fees of 3.95% (capped at £10,000), and does not incur a recurring subscription fee.
Beneficial Owner:
A person who ultimately owns some form of property, even in cases where the title to that property is in another name.
Blue Sky Filing:
A set of filings which require sellers of new issues of shares to register their offerings and provide financial details of the deal and the entities involved, so that investors have verifiable information on which to base their investment decision.
Branded Legal Entity:
A nominee entity which is incorporated by Odin for the use by a specific Odin customer, such as a Syndicate Lead. These are set up as limited companies with Join Odin Limited as the sole corporate shareholder, but afford the opportunity for customers to have their own name on the investee company’s cap table (e.g. ‘My Syndicate SPV Limited’).
Bridge Round:
A funding round that helps a company to ‘bridge’ the gap between major funding rounds, and provide enough cash to keep the company afloat until it raises the next, larger round. Sometimes, Bridge rounds are required to mitigate financial troubles, but in other cases they’re used to capitalise upon rapid growth.
Buyer (Secondary):
The individual or business entity that aims to purchase shares in a specific company from a Seller, outside of a funding round or any other form of primary share issuance for that company.
Capital:
Money or assets which are either owned by a person or organisation, or which are available to invest.
Capital Call:
The legal right of an investment firm, such as a venture capital fund, to demand a portion of the funds promised to it by an investor.
Capital Gains Tax:
A UK tax which is payable on the profit made when an individual sells (or disposes of) something which has increased in value, such as a stake in an early-stage private company which has appreciated. Non-UK tax residents investing through Odin are not liable for paying Capital Gains Tax, as the tax transparency of the Bare Trust ensures they only pay tax in the country they are a tax resident of.
Capital Introduction:
A scenario in which new capital is introduced to a deal by a third party, often in return for something else. For example, a Syndicate Member could introduce a new investor to their Syndicate Lead, who then invests in the Syndicate’s next deal. In return, the original Syndicate Member could receive a small percentage of the carry split.
Cap Table:
Short for capitalisation table. A cap table is a document that details the individuals or entities that have ownership of a company. Investors who use Odin are rolled up into an SPV structure, which sits as just one entrant on the company’s cap table.
Carried Interest (Carry):
A share of the profits that an investor makes on an investment, specifically in alternative investments (private equity, venture capital, etc.) Carry is a performance fee, and is usually payable to the investment manager as a reward for enhanced investment performance. If an investor puts $10,000 into a deal with 20% carry, and their stake becomes worth $100,000, they pay carry on the $90,000 of profit (which equals $18,000).
Carry Hurdle:
The rate of return upon which carried interest is payable to the deal lead. Unless this specific rate of return is achieved, no carried interest can be charged to an investor. Also referred to as the ‘Hurdle Rate’.
Carry Recipient:
An individual or business entity that receives carried interest on a profitable investment.
Carry Split:
The percentage share of carry that each of the carry recipients in a specific deal will receive upon a liquidity event being triggered. Regardless of the number of recipients involved, the total percentage split must add up to 100%.
Cash Fee:
A fixed or %-based fee charged by a Syndicate Lead to investors who wish to participate in a specific deal. This term is interchangeable with ‘Syndicate Lead Fee’ or ‘Management Fee’.
Certificate of Incorporation:
A document issued to a company by the company registry in the country the company was set up in. It confirms the existence of the company and records various key details about the company.
Chair of the Board:
The presiding officer of the board of a company. They are typically appointed by members of the company, and their responsibilities include presiding over board meetings and conducting the board’s business in an orderly fashion.
Closed Deal:
A term used to refer to a deal on the Odin platform where funds have been transferred to the investee company and investment legals have been signed. Closed deals are locked off from further investment, but can be reopened for more investors to join on the same deal terms.
Closing Process:
The process by which Odin closes deals once they have reached the ‘All Funds In’ status. It encompasses all actions from fee calculation to issuing proof of investment documentation to the syndicate investors.
Co-Lead:
An additional Syndicate Lead who leads jointly on a specific deal. Co-Leads are common among larger syndicates and syndicates who jointly syndicate a specific deal together.
Commitment:
A term used to refer to the amount an investor indicates they wish to invest into a deal. Commitments are not legally-binding and only serve as an indication for how much an investor is prepared to invest.
Commitment Required:
This status denotes that the investor has selected ‘invest’ rather than ‘pass’, but are yet to provide a commitment figure for the deal.
Common/Ordinary Shares:
A class of shares that represents ownership in a specific company. Most investors typically receive common or ordinary shares, which enable the shareholder to vote on matters of corporate governance, and provides a residual claim to the company’s profits and assets after all its other obligations have been met.
Conversion Event:
An event in which a convertible type of asset, such as convertible debt, is exchanged into equity, either on the longstop date of the original convertible agreement, or triggered by a specific event such as a new equity funding round.
Convertible Loan Note/Agreement (CLN/A):
An investment agreement in which investors offer the company an interest-bearing, repayable loan that is convertible into that company’s shares at their discretion, or upon the occurrence of certain events. Convertible Loans allow companies to raise funds quickly, and often provide investors with shares at a discounted price.
Core Pricing:
Odin’s middle tier of Syndicate pricing. Core pricing incurs deal fees of 3.45% (capped at £8,500), and also incurs a recurring subscription fee of £2,500 per year.
Customer Due Diligence (CDD):
A set of standardised checks that Odin employs when onboarding its clients, including investors, deal leads and investee companies. CDD aims to verify the identity of these users and confirm the nature of their transactions and dealings with Odin.
Customer Support:
The internal Odin team responsible for reacting to customer queries and resolving issues related to the Odin platform.
Customer Success:
The internal Odin team responsible for working strategically with key Odin customers to ensure they are successful in using the Odin platform, and helping customers achieve their wider goals beyond Odin.
Data Room:
A secure space where confidential documents concerning a portfolio company or investment opportunity can be kept and read only by the people authorised to access them.
Deal:
A more everyday term used to refer to an SPV being conducted on the Odin platform. Deals are arrangements between a syndicate of investors (led by a Deal Lead) and the investee company to exchange investment monies for shares in the company, or a future right to shares in the company.
Deal Flow:
Refers to the total amount of investment opportunities (deals) that a Syndicate or Fund receives. Deal flow can either be interpreted as quantitative (number of opportunities) or qualitative (cadence of ‘good’ opportunities).
Deal Lead:
The individual or individuals who launch, run and close a deal on Odin. This can either be a Syndicate Lead, or the Founder of the Investee Company.
Deal Operations:
The internal Odin team responsible for deal closing, and post-close events like conversions and exit events, along with financial and legal responsibilities.
Deal Sheet:
A document generated by the Odin platform that lists out key pieces of information on the deal in question, the Syndicate leading that deal, and any associated fees that will be incurred. Each Odin user will receive their own version of the Deal Sheet, and the Syndicate Lead will also be able to view a ‘default’ Deal Sheet.
Deed of Adherence (DoA):
A supplementary legal agreement which binds a new party to the existing shareholder’s agreement.
Delta:
The difference between two specific values.
Discount:
A rate offered on non-equity deals which offers investors a reduced price on shares of the company when their investment converts into equity. For example, a company might raise convertible debt with a 20% discount, and then convert the debt into equity with a share price of £3. In this case, the investors would receive more shares, as their discounted share price would be £2.40.
Disguised Investment Management Fees (DIMF) Rules:
A piece of UK legislation that is intended to ensure that sums paid for managing an investment scheme (and which are not calculated by reference to the performance of the underlying investments) are charged to income tax where they arise to individuals.
Drag-Along:
Pre-negotiated rights that majority shareholders have in a company’s stock, which enable them to force minority shareholders to sell at the same price and terms as the majority shareholder. Drag-along rights ensure that the majority shareholder can deliver 100% of the company’s share capital to a buyer.
Enhanced Due Diligence:
A more robust version of Customer Due Diligence (CDD) that employs extra checks and balances to verify the identity of an Odin customer and the nature of their transaction with (or through) Odin.
Entity:
A catch-all term used to refer to something that exists separately from other things, such as a person, or a limited company.
Enterprise Investment Scheme (EIS):
A government-run scheme in the UK which enables the investors in qualifying companies to claim tax relief. There are criteria that investee companies must meet to be eligible for the scheme, and funds raised under the scheme can only be used for certain purposes.
Entity Legal Name:
The name which appears on the formation document of a business entity, as per the company registry in the country in which the entity is formed or incorporated.
Equity:
The amount of money that would be returned to a shareholder if all of the investee company’s assets were liquidated. It can be used interchangeably with ‘shares’ to express an entity’s shareholding in a specific company.
Exit Event:
Any event, such as an initial public offering or acquisition, where all investors can ‘exit’ their investment and potentially earn profits.
Final Investment Amount:
The amount that is allocated to be invested into an investee company, net of any Odin platform fees or Syndicate Lead fees.
Financial Conduct Authority (FCA):
A UK governmental body that regulates the conduct of 45,000 businesses involved in financial markets in the UK. It promotes competition and innovation while reducing and preventing serious harm to consumers and individuals.
Financial Ombudsman Service (FOS):
A free service in the UK that is used to settle complaints between consumers and businesses that provide financial services.
Financial Services Compensation Scheme (FSCS):
A statutory compensation scheme in the UK for customers of UK-authorised financial services firms. When a financial services firm goes out of business or cannot fulfil its services, claimants are entitled to up to £85,000 under this scheme.
Follow-On Deal:
The term used to refer to a deal which ‘follows on’ from a previous one, meaning a second deal into the same investee company from the original group of investors. Odin offers reduced minimum deal fees for follow-on deals.
Foreign Account Tax Compliance Act (FATCA):
A U.S. federal law which requires all non-U.S. foreign financial institutions to search their records for customers who have a connection to the U.S., and to report their assets and identities to the U.S. Department of the Treasury.
Form K1:
A federal tax document used to report the income, losses and dividends for a business’ partners, or for an S Corporation’s shareholders. It can also be used to report income distributions from trusts and estates to beneficiaries.
Founder:
The individual(s) that incorporate a company and initially manage the company themselves.
Fractional Shares:
A term used to refer to a shareholding which is not an exact multiple of the share price. If a company has a share price of £58.63, than an investment amount of £5,000 would return a fractional shareholding of 85.28 shares.
Fund:
An investment vehicle where relatively large sums of capital are raised up-front and then deployed (or called) into a series of deals.
GP-LP:
A type of investment fund structure in which the General Partner (GP) is the managing entity of the investment, and the Limited Partners (LPs) are passive investors in the investment.
Gross Available:
The sum total of all funds that have been received, minus any cash fees being charged by the deal lead.
Headliner Pricing:
Odin’s highest tier of Syndicate pricing. Headliner pricing incurs deal fees of 2.95% (capped at £7,000), and also incurs a recurring subscription fee of £7,500 per year.
High-Risk Country:
A country which has been identified by the Financial Action Task Force (FATF) as being high-risk for anti-money laundering purposes.
High-Net-Worth Individual:
A term which refers to individuals who receive income and/or maintain assets at or above a certain thresholds. The specific amounts depend on the country the investor is resident in.
HMRC:
The UK’s tax, payments and customs authority, equivalent to the American IRS. It collects the money which pays for the UK’s public services.
Investor:
An entity, such as a person or a trust, which commits capital to an investee, such as a limited company or an exchange-traded fund, with the expectation of receiving financial returns.
Investee Company:
A company that receives investment from another party through an investment vehicle, such as from a Syndicate via an SPV.
Investment Agreement:
Any legal document, or set of legal documents, which outlines the terms and conditions under which an investment into an investee company is being made.
Investment Entity:
The type of entity which makes an investment into a specific deal. Odin users can invest either as themselves (an ‘individual’ entity), or they can invest via their ‘business entity’, be it a Limited Company, Trust or something else.
Investment Instrument:
A term used to refer to the specific investment agreement being used to facilitate a deal. A SAFE would be a distinct investment instrument from a Convertible Loan Note, for example.
Investment Memo:
A written pitch that is usually crafted by the Deal Lead, rather than the investee company. It is used to succinctly convey the strength of the investment opportunity to potential investors, as well as providing key details on the company and its management.
Invite Link:
A URL link that can be sent to prospective investors and Syndicate Members to provide access to a deal on Odin. Invite links can be pre-set with specific levels of carried interest and cash fees.
Investment Tranche:
A portion of total investment monies that are wired to the investee company separately from the rest of the funds. Odin wires tranches separately in certain scenarios, such as SEIS and non-SEIS amount, or for Rolling Closes.
IPO:
A specific type of exit event in which the Investee Company agrees to list on a public stock exchange, such as the New York Stock Exchange, and make its shares available to new investors.
IRS:
The revenue service for the federal government of the United States, which is responsible for collecting U.S. federal taxes and enforcing tax laws.
Join Odin Limited:
The operating company which trades as ‘Odin’.
KYB:
‘Know Your Business’. KYB is a similar process to KYC, but is used to verify pertinent details for businesses that are customers of Odin, such as investee companies. KYC checks are also conducted as part of the KYB process on the underlying beneficial owners of the business.
KYC:
‘Know Your Customer’. KYC is a mandatory process each Odin customer must go through in order for Odin to verify their identity, and monitor any changes on an ongoing basis, the objective being to ensure that Odin’s customers are genuinely who they claim to be.
Liquidity Event:
Any event upon which an investor gains the ability to convert their ownership stake in a private company or other asset into cash, or another form of liquidity. In the context of private companies, common liquidity events include mergers, acquisitions, initial public offerings and secondary share sales.
Minimum Commitment:
The absolute minimum amount that an individual investor can commit and wire to a specific deal.
MT103:
A specific message type used in the SWIFT payments network, which allows transfers of funds from one customer to another to be instructed by banks and financial institutions.
NIF:
A tax identification number that is required to carry out procedures before the Agencia Tributaria in Spain. Odin has an NIF for its own nominee entity for the purposes of facilitating deals into Spanish investee companies.
Nominee Entity:
An entity, often a limited company, which is nominated to hold assets on behalf of another entity or group of entities, who are the ultimate beneficial owner(s) of those assets. In Odin SPVs, a nominee entity holds shares or debt on behalf of the underlying investors in the SPV.
Notarisation:
The process by which a notary public certifies the authenticity of signatures appended to a document. Notarisation is a requirement for investment agreements issued by investee companies in certain countries.
Odin Investments Limited:
Odin’s standard nominee entity, which is used to facilitate deals.
Ongoing Monitoring:
The process by which Odin keeps its KYC information on all users and customers up to date.
Pass:
The decision to not invest into a specific deal on the Odin platform. All deals an investor has passed on will move to their anti-portfolio.
Passed:
This status denotes that the investor has passed on the opportunity to invest in your deal.
Passive Foreign Investment Company (PFIC):
A term used to refer to companies located outside the U.S. which have customers who have a connection to the U.S. PFICs must exhibit one of two behaviours - the first being at least 50% of the company’s assets are income-generating investments, and the second being at least 75% of the company’s gross income is passive. Odin nominee entities are considered ‘PFICs’ under FATCA.
Payment Received:
This status denotes that Odin has received the investor’s funds and the investor has therefore completed Odin’s investment flow.
Payment Reconciliation:
The financial process by which transaction records are matched and compared to ensure that a payment made or received is registered properly and consistent with what is recorded in the business’ accounting books. For example, custom payment references are used by Odin to ensure investor transfers can be reconciled to the correct deal on Odin, once received.
Payment Reference:
A unique reference used to identify a payment received. The Odin platform generates custom payment references for investors to include when they wire money to deals, so that these payments can be reconciled quickly and easily.
Payment Required:
This status denotes that the investor has completed everything required during the investment flow, but is yet to wire their funds to Odin.
Payment/Transfer Instruction:
A set of wiring instructions that informs an investor of the bank details for the bank account they need to wire investment funds and associated fees to, for their investment to be registered to a deal on Odin. The custom reference highlighted at the top of the instructions must always be included.
Performance-Related Carry:
Used to refer to any terms where the level of carried interest payable to the deal lead is influenced by the performance of the investment.
Pitch Deck:
A slide deck or presentation, prepared by the Founders of a company, that persuades and engages investors by telling the story of the business, demonstrating the size of the opportunity in the business’ market segment, and particularly how the company is best-placed to win the opportunity.
Platform Fee Cap:
The absolute maximum amount that Odin charges a customer in platform fees, pursuant to the pricing tier that the customer has agreed to.
Platform Fee Minimum:
The absolute minimum amount that Odin charges a customer in platform fees, pursuant to the pricing tier that the customer has agreed to.
Platform Operator:
The entity that contracts with other parties to make available all or part of a platform to such parties.
Portfolio:
The section of the Odin platform where closed deals that an investor has invested in are stored.
Post-Money Valuation:
The estimated valuation of an investee company, including the added value of the investment funds it intends to raise during the round in question.
Power of Attorney:
A legal authorisation which gives the agent or attorney the authority to act on behalf of an individual (referred to as the principal). While power of attorney can have many uses across finances, property and medical care, in the context of early-stage venture investing it typically appears when a third party is required to sign legal documents on behalf of another (such as a Company Director).
Preferred Shares:
A class of shares that provides different rights when compared with common or ordinary shares. Preferred shares confer a higher claim to the companies assets and dividends than common shareholders possess, commonly referred to as a liquidation preference.
Pre-Emption Rights:
The contractual right by which an investors (or group of investors) can purchase newly-issued shares by an investee company in proportion to the size of their original investment, before the newly-issued shares are offered to a third party.
Pre-Money Valuation:
The estimated valuation of an investee company, excluding the added value of the investment funds it intends to raise during the round in question.
Pre-Seed:
A term used to refer to any small instance of fundraising that a company undergoes before it initiates its Seed round. Pre-seed rounds usually involve raising money from friends, family and angel investors, as opposed to venture capital firms and institutional investors.
Primary Deal:
A deal in which investment funds are exchanged for newly-issued shares or convertible debt in the investee company.
Proof of Address:
A document which verifies the address of the individual in question. Odin accepts utility bills, bank or credit card statements, tax documents and government-issued residential documents as proof of address, so long as they are photographs of physical documents or e-statements (not scans).
Proof of Funds:
A document that proves the stated source of investment funds. E.g. a bank statement that shows the payment of a salary.
Proof of Identity:
A document which verifies the identity of the individual in question. Odin accepts passports, national ID cards, driving licenses and residence permits as proof of identity, so long as they are photographs or certified copies (not scans).
Proof of Investment:
A document generated by the Odin platform for each investor in a deal, once it fully closes. It outlines specific details of their investment (as the beneficial owner of the shares being held by the Odin nominee entity) and can be used for accounting and tax purposes.
Pro-Rata:
A Latin term used to describe a proportionate allocation, meaning each party received their fair share in proportion to the whole.
Proxy Voting:
A mechanism by which individual shareholders pass on their voting rights to another person or entity, meaning they are unable to exercise their vote on corporate issues. In syndicated investments, the voting rights of investors are almost always proxied to the Syndicate Lead.
Published/Live Deal:
A term used to refer to a deal on the Odin platform which is capable of receiving investor funds, and is no longer in the review process.
Qualified Electing Fund:
A U.S. government initiative which allows for qualifying taxpayers who invest in a PFIC to reduce the overall tax liability for the owner of the PFIC.
Registration Number:
The unique number that is assigned to a newly-formed company or business entity by the company register in the country of incorporation, to identify it and distinguish it from similarly-named companies. Registration number formatting depends on the country in question.
Rolling Close:
A term used to refer to the scenario in which a Deal Lead draws down some or all of the funds in an SPV for immediate use by the investee company, but keeps the SPV open for further investment.
Roll-up:
Another colloquial term for an SPV, in which many investors can be ‘rolled up’ into one single entity on an investee company’s cap table.
Secondary Deal:
A deal in which one shareholding entity sells one or more of its shares to a third party. No new shares are issued by the company in question during a secondary deal.
Seed:
A term used to refer to the first official round of funding that a company will undergo, in which it sells shares to investors in exchange for equity.
SeedFAST:
An S/EIS-friendly variant of the Advanced Subscription Agreement which provides future equity rights to investors who commit funds up-front. Similarly to a SAFE, the conversion of a SeedFAST occurs when the next funding round is triggered, and no immediate valuation is set until the next funding round is triggered.
Seed Enterprise Investment Scheme (SEIS):
A government-run scheme in the UK which enables the investors in qualifying companies to claim tax relief and loss relief. There are restrictions under the scheme for how much investors can invest through SEIS in a given tax year, how much qualifying companies can raise under SEIS in a given tax year, and the characteristics of the company, such as employee headcount and the sector it operates in.
S/EIS1:
A compliance statement that is submitted by the Investee Company to HMRC for the shares it intends to issue to investors that wish to claim tax relief under the EIS or SEIS schemes.
S/EIS2 (or S/EIS UIR):
A form issued to the Investee Company by HMRC which formally completes their review and affirms that the company has met the conditions of the EIS or SEIS scheme. This form contains a Unique Investment Reference (UIR) number for the particular share issue.
S/EIS3 Certificates:
Compliance certificates that are issued either by the Investee Company or by Odin to the investors in a specific deal that are eligible to claim EIS or SEIS relief. Specific details about the investment and the UIR must be included on these forms. Individual investors can use these forms to claim their relief under either scheme.
Seller (Secondary):
The individual or business entity that is selling part or all of their equity stake in a specific company, often to realise a financial gain or achieve earlier liquidity.
Self-Certified Sophisticated Investor:
An investor who meets certain criteria of knowledge and experience in financial matters, and can self-certify that they meet these criteria. In the UK, these criteria are laid out by the FCA in article 23A of the Promotion of Collective Investment Schemes Order, in article 50A of the *Financial Promotion Order,* or in COBS 4.12B.40R.
Series Round:
Funding rounds which generally follow a Seed round. As the company grows larger and raises higher amounts of capital to reach its growth and profitability targets, more institutional investors tend to join later Series rounds. Series rounds are typically alphabetised, such as Series A, B, C and D.
Shares:
An indivisible unit of capital which expresses the ownership relationship between a company and the entity holding the share(s).
Share Class:
The specific type of shares being issued by an investee company, or an investor selling their shares. Different share classes will carry certain privileges, such as improved voting rights. Early-stage companies typically issue two classes of shares - preference shares and common/ordinary shares.
Share Price:
The amount that it would cost to buy one whole share in an investee company for. The share price can increase or decrease based on successive investment rounds or market conditions.
Share Rounding:
A practice in which shares are rounded up or down to the nearest whole number. Odin employs share rounding in limited situations, such as rounding an investor’s shareholding down if they need to claim S/EIS relief but have a fractional shareholding.
Share Subscription Agreement (SSA):
A formal investment agreement which outlines the terms and conditions under which an investor (or group of investors) agrees to purchase shares in the investee company.
Side Agreement:
An agreement which is separate to the primary contract or agreement, and is agreed upon by all relevant parties to clarify, supplement or vary the original document. Side Agreements can also be referred to as ‘Side Letters’.
Signature Block:
A block of information containing key details about one of the signatories to a legal agreement, such as their name, email, physical address and more.
Simple Agreement for Future Equity (SAFE):
A flexible investment agreement which provides future equity rights to investors without settling on an immediate valuation. Rather than converting at a certain maturity date, investors receive their equity upon the triggering of a specific event like an equity fundraising round or acquisition.
Source of Wealth:
A statement or document that provides additional context about the origin or source of the funds being used for an investment being made through the Odin platform.
Special Purpose Vehicle (SPV):
A legal entity created for a special, limited purpose, usually as a structured investment vehicle. SPVs are always free from pre-existing obligations and debts, and are separate to the parties that set them up for accountancy, tax and insolvency purposes. Odin uses SPVs to structure investments into early-stage private companies.
Stamp Duty:
A tax levied by the UK government on the buyer or seller of the shares in a secondary share sale, if the company in question is registered in the UK and the transaction is over £1,000. Stamp Duty is typically 0.5% of the transaction amount, but can be higher under certain circumstances.
Stamp Duty Reserve Tax (SDRT):
A tax levied by the UK government on the buyer or seller of the shares in a secondary share sale, if the company in question is registered in the UK and the transaction is electronic or paperless. SDRT is typically 0.5% of the transaction amount.
Startup:
A colloquial term used to refer to businesses that are newly-established.
Stock Transfer Form (STF):
A legal document commonly used in secondary share sales, where one person or business entity transfers ownership of their shares in a specific company to another person or business entity.
Sumsub:
A Know Your Customer (KYC) provider that Odin uses to verify the identity of users of the Odin platform.
Syndicate:
A term that refers to a group of individuals or organisations which come together to promote a common interest. In the context of early-stage venture investing, ‘Syndicate’ often refers to a group of angel investors who share a similar background or want to invest into certain types of deals.
Syndicate Lead:
The individual who leads a group of syndicate investors. The responsibilities of the Syndicate Lead can include sourcing allocations into good deals, setting the investment thesis for the syndicate, and attracting capital onto their network.
Syndicate Lead Fee:
A fixed or %-based fee charged by a Syndicate Lead to investors who wish to participate in a specific deal. This term is interchangeable with ‘Cash Fee’ or ‘Management Fee’.
Syndicate Member:
Any member of a Syndicate who is not the Syndicate Lead.
Syndicate Terms:
An Odin-specific legal agreement that sets out the terms on which a Syndicate on Odin operates. The terms are agreed to by Join Odin Limited, the Syndicate Lead and the Syndicate Members, and affirm the relationship between each party, carried interest, taxation and fees, among other things.
Tag-Along:
Pre-negotiated protective rights that minority shareholders have in a company’s stock, that allow them to sell their shares at the same price and terms, if a majority shareholder is negotiating a sale for their stake. Tag-along rights ensure that minority shareholders can participate in a sale and receive a fair price for their holdings.
Target Close Date:
The estimated date by which the Deal Lead intends to close their deal and transfer funds to the investee company. Odin uses this date to determine when internal teams reach out to offer assistance to the Deal Lead.
Tax Liability:
The total amount of tax debt owed by an individual or business entity to the government of the country they are tax resident in.
Tax Residency:
A status that denotes your responsibility to pay taxes in the country you are a resident of. In some cases, it’s possible to have tax residency in more than one country or jurisdiction.
Term Sheet:
A document which sets out the terms of a transaction which is agreed in principle between the parties involved in the transaction. Unlike other investment agreements, term sheets are not legally-binding and are typically signed at the beginning of a transaction.
Total Committed:
The total sum of all commitments that investors have made to a deal on the Odin platform, which is distinct to the funds received for the deal. Commitments serve as an indicator of how much the users with access to a deal intend to invest, but are not legally-binding.
Total Received:
The sum of all funds that have been wired to a deal on Odin by the investors, including all ancillary fees.
Total Round Size:
The total amount that the investee company intends to raise in its current round of funding, encompassing all of its investors.
Trading Name:
The name used by a business entity for the purposes of carrying out business, which is not the same as its legal name. It is common for entities to ‘trade as’ a shorter name without any legal suffixes.
Transfer Initiated:
This status denotes that the investor has wired their funds to Odin, but our team hasn’t yet been able to confirm receipt. If an investor is stuck in this stage for several days, it’s worth sharing supporting evidence of the transfer with Odin.
Transfer of Beneficial Interest (TOBI):
A type of secondary transfer in which one single investor (rather than the entire syndicate) can sell part or all of their shareholding in a company to another buyer. The buyer can either be another member of the original SPV, or someone external. Odin processes TOBIs off-platform and always consults the Founder of the Investee Company.
Transfer Receipt:
A document issued by a payer’s bank which serves as proof of a financial transaction, including several important details such as the amount transferred and the date of the transfer.
Trustee:
A person who assumes responsibility for managing the money or assets that have been set aside in a trust for the benefit of another individual.
Ultimate Beneficial Owner (UBO):
An individual who owns or controls a company, either by holding more than 25% of the shares or voting rights in the company, or has the right to appoint or remove the majority of the board of directors. This term is interchangeable with ‘person of significant control’.
Valuation Cap:
The agreed maximum amount that an investee company can be valued at in a future round of funding. Caps are often used with convertible investment instruments to give the noteholders a ‘ceiling’ value at which their investment will convert.
Voting Rights:
The right of a shareholder in a company to vote on matters of corporate policy. The greater the shareholding, the more voting power that the shareholder will have, although in many cases, individual shareholders’ voting rights are proxied to a third party. Voting rights allow shareholders to influence the success of their investment.
Wet Signature:
A term used to describe a non-digital signing process for investment legals pertaining to a deal, where the agreement must be physically signed using ‘wet’ ink. Wet signatures are common for deals requiring notarisation.
Whole Shares:
A term used to refer to a shareholding that is an exact multiple of the share price. If a company has a share price of £58.63, then an investment amount of £5,863 would equal 100 whole shares.
Wind Down:
A scenario in which a company gradually shuts down its business operations and ceases trading.
Wire Transfer:
An electronic method of sending money from one party to another, directly between banks. All transactions on Odin are made using wire transfers.
Witness:
A person whose role it is to observe the signing of a legal agreement by a specific signatory, and then themselves also sign the legal agreement to confirm they have witnessed the signatory signing the agreement.