What happens after you click ‘invest’?

The Logistics

Click invest, and it’s just three steps to make your first Play Money investment:

• Complete a standard KYC (know your customer) process 

• Link your funding account via Plaid. (Yay, no wire fees.)

• Enter your investment amount and click confirm twice.

Docs are auto-signed. Money is in motion. You’ll immediately see your new investment ‘pending’ on your portfolio page in Play Money.

Hello Angel, you just funded the future! 🤑

“Wow, that was easy. It was almost too easy,” is a quote we’ve heard more than once.

Pro Tip: Take an extra minute to share why you invested. 60% of Play Money investors check out why others invested. Your insights and encouragement can help bring in other high-value angels to help your new portco (investor slang for portfolio company) succeed.

Funds won’t always be pulled from your account immediately. If there is a delay, we’ll give you at least 24 hours notice before we withdraw money to fund your investment.

Money and Minimums

Play Money accepts investments as small as $500, but the average check size on the site is $2,300. We’ll take a one-time platform fee of 10% from your original investment amount. Managing regulatory filings, fees, and tax reporting costs money. For folks writing larger checks, we cap that fee at $1500. Many angels boost their investment amount up to account for fees.

Wait, what am I signing?

When you invest on Play Money you are investing through an SPV. The documents you sign are the SPV subscription agreements. 

For folks who like to read all the details the first time through, our investment LLCs (SPVs are just LLCs) are filed under Clutch Capital (the Play Money investing LLC). Yellow Purse Capital Partners (the Play Money investing advisor entity) signs the SAFE Note with the company on behalf of the SPV. You can view the SAFE note on the deal memo.

After you invest, don’t expect an invite from Carta or Angel List or another cap table service like you would if you invested directly in the company. You own a share of the SPV. The SPV owns the startup shares. The SPV shows up on the cap table.

Taxes

The K-1 is the tax document associated with startup investing via SPVs. Your K-1s will show up in your Play Money dashboard. Tax returns and K-1s are only required to be filed with the IRS if there is taxable income or loss to report for a given tax year.

We’ll email you when K-1s are issued. If an SPV didn’t generate taxable income or loss, no K-1 is required. We’ll also let you know when a distribution from one of your investments occurs. The proceeds will be returned to your original funding account, or you can designate a new account.

Startup investments take a long time to bake. It will be a minute before you need to worry about this.

The question you really want to ask…

Play Money is a startup. What happens if you go away?

The SPV you are a part of is legally part of the startup’s cap table. And SPVs are actually Delaware LLCs. The system of record of your ownership doesn’t just sit with a private company. It sits with a State — the actual OG of states. As long as Delaware is still standing, there is a record of your ownership.

Plus, we love this too much. We aren’t going anywhere.

More questions? Leave a comment. Click on the green diamond to chat. Or drop into a new member welcome session on Fridays. Sign up here.