Private Company Liquidity Events

Can I Sell My SPV Position?

Shares held by the SPV are generally considered "restricted securities" under US securities laws, which typically requires a one-year holding period from the date of purchase before they can be resold. There is no guarantee that a viable, liquid marketplace will be available after one year or that Webull will provide access.

What Happens If a Company I’m Investing in Goes Public?

When a portfolio company completes an IPO the shares will be moved from the transfer agent to your Webull brokerage account. The shares held by the SPV may be subject to a 180-day lock-up period following the IPO, during which time they will be restricted in your accounts and they cannot be sold. After the lock-up period expires your shares will be unrestricted.

What Happens If a Company I’m Investing in Gets Acquired?

Acquisitions of portfolio companies can take different forms, and the outcomes for investors will depend on the specific transaction structure:

• Cash Acquisitions: In an all-cash transaction, the proceeds from the sale of company shares will be distributed to SPV investors in proportion to their ownership percentages according to the terms of the SPV Offering Documents.
• Stock Acquisitions: In transactions where payment is made in acquirer stock, investors may receive shares in the acquiring company in proportion to their SPV interests according to the SPV Offering Documents, or the SPV may be required to hold the shares in the acquiring company until there is a liquidity event for the acquiring entity.
• Mixed Consideration: Many acquisitions involve a combination of cash and stock consideration, in which case investors will receive their proportional share of both components according to the terms of SPV Offering Documents

Whatever the make-up of the final distribution, assets will be available in your Webull brokerage account.

What Happens If a Company I’m Investing in Goes Bankrupt?

Corporate bankruptcies can result in various outcomes for shareholders, typically determined by the bankruptcy proceedings:

• In Chapter 7 liquidations, company assets are sold and distributed to creditors according to legal priority. Equity investors (including SPV holders) are last in the payment hierarchy and often receive little or no recovery.
• In Chapter 11 reorganizations, the company attempts to restructure its operations and obligations. Existing equity holders may receive some consideration in the reorganized entity, though often significantly diluted.

As an SPV investor, your financial exposure is limited to your initial investment amount. The SPV will represent shareholder interests in bankruptcy proceedings and distribute any recovery value proportionately to investors, though full loss of investment is a possible outcome in bankruptcy scenarios.

When Can I Expect a Liquidity Event for My Private Company Investment?

Private company investments should be approached with a long-term perspective, as there is no guaranteed timeline for liquidity events. The path to liquidity depends on numerous factors:

• Company growth trajectory and financial performance
• Market conditions and IPO environment
• Strategic acquisition interest in the sector
• Management and board decisions regarding exit timing

There is substantial variation in the timelines that companies go public or get acquired. While Webull will work to provide investors with a solution for secondary liquidity, there can be no guarantee that the market develops or that Webull will provide access should a secondary market develop. As such, investors should be prepared for the possibility that investments may remain illiquid for extended periods or, in some cases, indefinitely.