Allocation Policies of EquityZen Inc. and Affiliated Entities
EquityZen Inc. (“EquityZen”) operates an investment platform (the “Platform”) on which accredited investors (“Platform Investors”) may browse investment opportunities and complete investments in private placement transactions. To facilitate these transactions, EquityZen manages pooled investment vehicles (“Platform Funds”) through which accredited investors complete their investments. EquityZen does not exercise investment discretion over investments made by Platform Funds. EquityZen Securities LLC, an affiliate of EquityZen and the Platform Funds, is a registered broker-dealer and acts as placement agent for transactions on the Platform. EquityZen Advisors LLC (“EZA”), an affiliate of EquityZen, also manages pooled investment vehicles in which EZA exercises discretion over investment decisions (“Discretionary Funds”). The Discretionary Funds, like the Platform Funds, invest in private placements available on the Platform.
In order to (i) ensure the fair and equitable allocation of investment opportunities between and among Platform Funds (and Platform Investors) and Discretionary Funds and (ii) avoid and/or mitigate possible conflicts of interest, EquityZen has established the following allocation policies relating to investment opportunities available on the Platform (“Platform Investment Opportunities”) in which a Discretionary Fund makes an investment commitment.
- As Mr. Philip Haslett participates in preparing and/or reviewing the email distribution regarding Platform Opportunities (the “Investor Email”), he will have knowledge of Platform Investment Opportunities prior to Platform Investors. Mr. Haslett is also a member of the investment committee of one or more Discretionary Funds. To avoid any conflicts of interest related to such prior knowledge, any Discretionary Fund on whose investment committee Mr. Haslett is a member shall not commit to an investment for at least 48 hours following the distribution of the Investor Email.
- If Platform Investment Opportunity does not close on the entire contemplated amount, allocations to investors in that transaction, whether Platform Investors or Platform Funds, shall be made on a pro rata basis.
- A Discretionary Fund shall not commit to an investment in a Platform Investment Opportunity in order for such Platform Investment Opportunity to achieve a required minimum in order to proceed.
- Where a Discretionary Fund has committed to Platform Investment Opportunity within the final 3 days of its being open for investment, such Discretionary Fund’s investment committee or similar authority must explain in writing its basis for making the investment or otherwise demonstrate that the commitment was not made for the purpose of achieving a commitment minimum.
- If multiple Discretionary Funds with the same investment strategy, or overlapping investment strategies, seek to invest in the same Platform Investment Opportunity:
- Multiple Discretionary Fund investments may be accepted in the requested investment size for each Discretionary Fund if the total available Platform Investment Opportunity size permits.
- If the available Platform Investment Opportunity size is less than the total requested investment size for all Discretionary Funds seeking an investment, the Platform Investment Opportunity shall be allocated to each Discretionary Fund pro rata based on the requested investment size of each Discretionary Fund.
- In making allocations, the investment committee shall not allocate between Discretionary Funds on the basis of fees paid, the availability of carried interest, performance relative to an applicable high-water mark, if any, or the presence or absence of any affiliated investors, or the relative size of affiliated investments in the Discretionary Fund.
- A Platform Investment Opportunity shall be allocated to a Discretionary Fund that commits to such opportunity in the order in which such commitment was made. Such allocation priority is consistent with the priority allocated to Platform Investors.
- A Discretionary Fund that commits to an oversubscribed Platform Investment Opportunity shall be treated like any other Platform Investor with respect to a wait list, unallocated or partially allocated demand, or other similar procedure, including any opportunities to subscribe to a subsequent fund prior to the Investor Email.
Platform Investment Opportunities with a waitlist may be allocated to Platform Investors and/or Discretionary Fund Investors in an order determined by the date of their completed reservation. In accepting subscriptions from a waitlist or in accepting subscriptions for a Platform Investment Opportunity that is expected to be oversubscribed, EquityZen may also consider other factors, including available investment capacity, proposed investment size, whether an investor has transacted previously with EquityZen, and an investor's ability to transfer funds from an EquityZen investor account or otherwise comply with timing requirements determined by EquityZen Securities LLC.
- Deviation from these Allocation Policies, on a case-by-case basis, is permitted. However, any such deviation must be fair and equitable and documented in writing (including the methodology actually used).
- These Allocation Policies shall be disclosed prominently (i) on EquityZen’s website, (ii) in the offering documents of each Platform Investment Opportunity, and (iii) the offering documents of each Discretionary Fund.
- With respect to Discretionary Funds that have closed prior to the adoption of these Allocation Policies and whose investment periods have not yet expired, a written notification of these Allocation Policies shall be provided to all investors in such Discretionary Funds.