Key Concepts

Core Concepts

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SPV (Special Purpose Vehicle)

An SPV is a legal entity created to pool money from multiple investors and make a single investment in a company. When you invest through Play Money, your money goes into an SPV — not directly to the startup. The SPV holds the investment on behalf of all participating investors. This structure simplifies the legal and administrative process for both you and the company.

Deal

A deal is an investment opportunity in a startup company, presented on the platform. Each deal has its own page with information about the company, the founding team, investment terms, and the minimum amount you can invest. Deals go through stages — they can be open (accepting investments), require an access request, or be closed once the round is complete.

Investment Profile

An investment profile tells the platform who is making the investment. You can invest as an individual (yourself), or through a legal entity like an LLC, corporation, trust, IRA, or donor-advised fund (DAF). You may create multiple profiles if you invest through different entities. See Investment Profiles for details on each type.

Identity Verification

Before you can invest, the platform is required by law to verify your identity. This is sometimes called KYC (Know Your Customer). You will be asked to provide personal information such as your legal name, date of birth, address, and an identification number. The verification process runs in the background and is usually approved quickly. See Identity Verification for more.

Funding Source

Your funding source is how you send money for an investment. Play Money supports three methods:

See Funding Sources for help choosing the right method.

Fees

There are two fees on most investments:

• Platform fee (10%) — A one-time 10% fee on your investment amount charged by Play Money for facilitating the investment
• Carry (20%) — 20% of any future profits from the investment, paid to the fund manager. No profits means no carry

Fees vary by deal and are always shown before you confirm your investment. See Understanding Fees for a full breakdown.

Additional Terms

K-1 Tax Form

A K-1 (Schedule K-1) is a tax document that reports your share of income, deductions, and credits from an SPV investment. You will need it when filing your taxes. A K-1 is issued for every investment the year the funding round closes. In subsequent years, you will only receive a K-1 if a taxable event occurs for that investment. K-1 forms are typically available by March 15 and can be accessed from your Tax Center. Visit your Tax Center to see taxable events and whether you should expect a K-1 for a specific investment. See Tax Forms and K-1s for full details.

Carry (Carried Interest)

Carry (carried interest) is the fund manager's 20% share of any profits from your investment. For example, if the SPV earns a profit, 20% of that profit goes to the manager and 80% goes to you and the other investors. You can reduce or eliminate carry through carry credits, which you earn by referring friends to the platform.

Funding Close

A funding close is the event when an SPV finalizes all investments and officially deploys the pooled money to the company. Once a funding close is settled, your subscription agreement becomes available and the company receives the funds. Your investment status changes to "Funded" and you are officially an investor in that company.

Common Questions

Do I need to understand all of this before investing? No. The platform guides you through every step. These concepts are helpful background, but you do not need to memorize them.

Where can I learn about angel investing in general? Visit the Learning Hub for courses and lessons on angel investing topics, from evaluating deals to understanding tax implications.

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