SPV Introduction

What is Webull’s Private Markets?

Private Markets gives accredited investors access to invest and gain exposure to private companies by investing in Special Purpose Vehicles (“SPVs”) offered by third parties. The investment is intended to offer direct exposure to the underlying private company. These types of investments are sometimes called Alternative Investments and typically have different risk-return profiles and often lower correlation with public markets than traditional investments.

What are Special Purpose Vehicles?

When you invest in a private company through Private Markets, you're purchasing an interest in a Special Purpose Vehicle (“SPV”), not shares of the private company itself. SPVs generally own or intend to use the proceeds of its private placement of membership interests either to (i) invest directly in shares of a specified private company, or (ii) to invest in membership interests offered by a second unaffiliated SPV that owns or intends to use the proceeds of its private placement of membership interests to invest directly in shares of a specified private company. Your ownership percentage in the SPV corresponds to your pro-rata economic interest in the underlying company shares. Available SPV investments are currently limited to only 99 investors per offering and therefore there are minimum dollar amounts to invest.

How are the Offerings Conducted?

The Offerings are conducted by third parties unaffiliated with Webull through the platform owned and operated by Monark Markets, Inc. (“Monark Markets”; such platform, the “Monark Platform”). The SPV conducting an Offering may be an affiliate of Monark or may be a third party unaffiliated with either Webull or Monark.

The Offerings are conducted by third parties unaffiliated with Webull. Neither Webull nor any of its affiliates (i) participates in or has any ability to direct or control the structuring, management, or business of any SPV; (ii) participates in the preparation of any Offering Documents; (iii) reviews or approves in any respect any Offering Document; or (iv) makes any recommendation or provides investment advice or other advice (including without limitation tax or legal advice) in connection with a client’s prospective investment in an Offering. By investing in an Offering you will be entering into agreements with the applicable offeror and not with Webull or any of its affiliates, and Webull will not be liable to you for any losses you may experience in connection with an investment in an Offering.

What is Webull’s Role in Facilitating SPV Investments?

Webull provides technological access and connectivity for accredited investors to use their Webull brokerage account to engage in self-directed investments in Offerings and to view their active investments in Offerings pursuant to an agreement between Webull and Monark Markets. Additionally, Webull maintains a referral arrangement with MMM Securities LLC (“MMM”), an affiliate of Monark Markets, pursuant to which Webull receives compensation from MMM in respect of investments in Offerings by clients of Webull through their Webull brokerage account. Membership interests in SPVs owned by clients of Webull in connection with their investment in an Offering are not custodied at Webull but are held on the books and records of the applicable SPV.

How Do I Invest?

Unlike public securities traded on exchanges, most private company investments or SPVs that invest in private companies aren't readily available through standard brokerage accounts. Webull Private Markets provides access to these investments to accredited investors directly within their Webull brokerage account.

To access Private Markets investments, visit the Private Markets section on the App. By clicking on Companies, you will be able to access market data, news, and information on the largest private companies you might be interested in.

In order to see live and prospective offerings, you will need to click into "Live Offerings" or "Prospective Offerings," but first you need to self-attest to being an Accredited Investor (AI) - please see "Who is Qualified to Invest," for more information on Accredited Investor (“AI”) status.

What are Prospective Offerings:

The "Prospective Offering" section will have a list of possible upcoming private company SPV offerings. Here you can enter a non-binding Indication of Interest (“IOI”) – please see the FAQ, "What is an Indication of Interest," for more detail - if you are interested in an investment in this private company SPV should it become available. If the offering does become available, you will be notified and can then invest. IOIs are non-binding and help our partners gauge our clients' interest in specific private companies and help guide which private company SPV investments are made available. They are non-binding and you may choose not to invest.

What are Live Offerings:

The "Live Offering" section will have a list of all available private company SPVs currently on offer. By clicking into a specific live offering, you can review offering documents and submit an order. Investment documents are available with specifics on the offering and should be reviewed before submitting an order. You will be asked to review documents and e-sign as part of the order submission process. Unlike IOIs, orders are binding and not cancellable. You need to have settled cash in your account in the amount of your order and funds will be locked up until the offering is closed or cancelled.

Once the SPV is fully subscribed, your order will be processed, funds deducted from your account, and your Private Markets investment will be reflected in your brokerage account.

Who Is Qualified to Invest?

To invest in a Private Company SPV, a client must be an accredited investor. An accredited investor is an individual or entity that meets specific financial criteria established by securities regulators. In the United States, an individual qualifies as an accredited investor by meeting any one of these conditions:

• Annual income exceeding $200,000 (or $300,000 combined with spouse or spousal equivalent) for the past two years with reasonable expectation of maintaining similar income
• Net worth exceeding $1,000,000 (excluding primary residence), individually or with spouse or spousal equivalent
• Holding in good standing certain professional certifications or designations, including Series 7, Series 65, or Series 82 licenses

What are the risks and benefits of SPVs?

Private Market investments, also referred to as Alternative Investments or Alternatives, can offer several potential benefits within a diversified portfolio:

• Portfolio diversification: Alternatives often have lower correlation to traditional markets, potentially reducing overall portfolio volatility
• Return enhancement potential: Some alternative investments may offer higher return potential compared to public markets
• Inflation hedging capabilities: Certain alternative assets may provide protection against inflation
• Access to innovation: Private markets may give investors exposure to emerging technologies and business models earlier in their development

Alternative investments involve unique considerations and risks that differ from traditional investments. The risks described below are not intended to be exhaustive of all risks associated with an investment in an Offering. Before investing in any Offering you should carefully review all applicable Offering Documents, consult with any financial, tax, and other advisors you deem appropriate, and determine whether an investment in the Offering is appropriate for your individual financial situation. Additionally, you should review the Private Markets Purchase Risk Disclosures for more information regarding risks of investments in offerings.

• Liquidity constraints: Private investments typically cannot be easily sold or converted to cash on demand. There is a 1-year holding period and there is no guarantee of a secondary market developing or that Webull will offer access to any secondary market. Liquidity events, such as an IPO or merger, may take years to arise, if ever. Bankruptcy of the underlying company investment is also a potential outcome
• Longer investment horizons: Many alternatives require multi-year commitments
• Limited transparency: Private investments may offer less detailed or less frequent disclosure compared to public securities
• Complex structures: Alternative investments may involve sophisticated legal structures that require careful review
• Higher fees: Management fees and carried interest can be higher than those for traditional investments
• Valuation uncertainty: Without public market pricing, valuations may be less frequent and more subjective

How Does Investing in Private Markets Differ from Investing in Publicly Traded Equities?

There are many differences between alternative investments and publicly traded equities. While the answers may vary depending on the specific alternative investment as well as the structure or method of investment, the table below highlights some high-level differences.