INVESTMENT INSTRUMENTS
On Funder, you can access a variety of investment instruments. Below is a detailed overview of each instrument and its purpose.
EQUITY FINANCING
Equity financing allows a business to raise capital from multiple investors by issuing shares. This increases the company’s share capital and provides investors with ownership stakes in exchange for their monetary investment.
CONVERTIBLE LOAN / SAFE INSTRUMENT
A Convertible Loan or SAFE (Simple Agreement for Future Equity) is an investment instrument that allows an investor to convert their investment into company shares at a pre-agreed conversion rate within a specified timeframe. On Funder, these instruments are offered to investors under conditions outlined in the investment documentation.
SPECIAL PURPOSE VEHICLE (SPV)
An SPV (Special Purpose Vehicle) is a legal entity created solely for a specific investment activity, such as consolidating pooled investments. In a traditional model, an investor acquires shares directly in the company raising capital. However, under an SPV structure, investors hold shares in the SPV, which in turn acquires shares in the target company. The SPV’s only function is to manage this holding and has no other operational activities.