Glossary

SAFT (Simple Agreement for Future Tokens)

A SAFT is an investment contract offered by cryptocurrency developers to accredited investors. It is considered a security and thus must comply with regulatory requirements. The investor receives tokens, which can potentially be used on the platform or traded in the future.

Stock Split

A Stock Split is a corporate action where a company divides its existing shares into multiple shares. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because the split does not add any real value.

Settlement

Settlement is the process whereby securities or interests are delivered, usually against (in simultaneous exchange for) payment of money, to fulfill contractual obligations, such as those arising under securities trades.

StartEngine

StartEngine is a leading equity crowdfunding platform that allows individuals to invest in startups and early-stage companies. It provides companies with the tools needed to raise capital compliantly.

SAFE (Simple Agreement for Future Equity)

A SAFE is an investment contract that allows investors to purchase rights to equity in a company in connection with a future priced round. It’s intended to be simpler than a convertible note, primarily used in early-stage startup financing.

Sara Hanks

Sara Hanks is a noted securities attorney with extensive experience in corporate and securities law, particularly in regulations involving crowdfunding and startup financing. She is a leader in the field, often consulted for her expertise on matters of public and private capital formation.

Securities Regulators

Securities regulators are governmental or other statutory bodies that have the authority to enforce securities laws. They are tasked with protecting investors, ensuring fair and efficient markets, and reducing systemic risk.

Shareholder

A shareholder is an individual, company, or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders are granted special privileges depending on the class of stock, including the right to vote on matters such as elections to the board of directors.

Shareholder Agreement

A shareholder agreement is a contract between some or all of the shareholders of a company that outlines the operational aspects of the company and the rights and responsibilities of the shareholders.

Shareholder Communications

Shareholder communications involve the exchange of information between a company and its shareholders. This includes financial statements, shareholder meetings, press releases, and other disclosures. Effective shareholder communication ensures that shareholders are well-informed about the company’s performance and strategic direction, fostering transparency and trust.

SPV (Special Purpose Vehicle)

A Special Purpose Vehicle (SPV) is a subsidiary company created for a specific objective, often to isolate financial risk. SPVs are typically used in securitization, allowing companies to secure financing against distinct pools of assets without the risk to the entire corporation.

Stable Coins

Stable coins are cryptocurrencies designed to minimize the volatility of the price of the stablecoin, relative to some "stable" asset or basket of assets. A stable coin can be pegged to a currency, or to exchange traded commodities such as precious metals or industrial metals.

SPAC (Special Purpose Acquisition Company)

SPAC is a company with no commercial operations, formed strictly to raise capital through an IPO for the purpose of acquiring an existing company.

Scrutineer

A Scrutineer is an individual appointed to oversee the process of an election or a vote within a company. They ensure that all procedures are followed correctly and that the voting process is transparent and fair.

Sophisticated Investor

A Sophisticated Investor is a type of investor who is deemed to have sufficient investing experience and knowledge to weigh the risks and merits of an investment opportunity.

Secondary Market

The secondary market is where investors buy and sell securities they already own. It is what most people typically think of as the “stock market,” though it also includes trading in bonds, options, futures, and more.

Secondary Market Trading

Secondary market trading refers to the buying and selling of previously issued securities between investors, without the involvement of the issuing companies. This trading is facilitated by exchanges or over-the-counter markets.

Securities Law

Securities Law encompasses the body of regulations and laws that govern the issuance, purchase, and sale of securities. These laws are designed to protect investors from fraud and ensure the transparency and fairness of financial markets.

Security Tokens

Security tokens are a type of digital asset based on blockchain technology. They represent a share in an external asset or enterprise, providing digital ownership, voting rights, or dividends as coded into the token. They combine legal characteristics of traditional securities with the benefits of blockchain technology.

SEC (Securities and Exchange Commission)

The SEC is a U.S. government agency responsible for enforcing federal securities laws, proposing securities rules, and regulating the securities industry, including stock and options exchanges.

Selling Shareholders

Selling shareholders are existing shareholders in a company who choose to sell their shares. They might sell their shares as part of a secondary offering or on the open market.

Sherwood Neiss

Sherwood Neiss is an entrepreneur and advocate known for his role in spearheading regulatory changes that paved the way for equity crowdfunding in the United States. He is a co-founder of Crowdfund Capital Advisors and has been instrumental in advising the implementation of crowdfunding regulations.

Strategic Investor

A strategic investor is an investor who is interested in more than just the financial return of an investment. They are often companies that have a vested interest in seeing the startup succeed because of synergies with their own businesses.

Suitability

In finance, suitability refers to the process of determining if an investment product or strategy meets the financial goals and objectives of a client. This includes consideration of the client's financial situation, investment experience, and risk tolerance.

Syndication

In finance, syndication refers to the process of involving multiple investors to fund large and complex transactions. This practice is common in areas like venture capital, corporate loans, and real estate, enabling the spreading of risk and the pooling of capital.