Disclosures

Hill Securities LLC

Securities transactions described on this website are conducted through Hill Securities LLC ("Hill Securities"), a registered broker-dealer and member FINRA / SIPC (CRD #338653). You can review Hill Securities' background on FINRA's BrokerCheck and read its Form CRS (Client Relationship Summary).

About this page

This website is operated by Trest Capital, LLC ("Trest"). Trest is not a registered broker-dealer, does not effect securities transactions, and does not receive transaction-based compensation. All securities activity described on this website is conducted by personnel acting in their capacity as registered representatives of Hill Securities. When you work with Trest on any securities transaction, you are dealing with Hill Securities.

The transactions available through Hill Securities are private placements and private secondary transactions in unregistered securities: primary offerings and secondary transactions, in direct shares of private companies or in interests in private funds (including special purpose vehicles). This page describes the essential risks of those transactions and the conflicts of interest involved. It supplements, and does not replace, the offering or transaction documents for any specific investment, which contain additional risks and disclosures specific to that investment and its issuer. Read them in full before investing.

Essential risks of investing

You may lose your entire investment

Private companies and private funds frequently fail. An issuer may run out of capital, be unable to raise further financing, be wound down, be sold for less than the amount invested, or become insolvent. Equity and fund interests sit behind debt and, in many cases, behind other classes of equity holding liquidation preferences, so a sale of the issuer can return nothing to holders of the securities you purchased even when the issuer is sold for a substantial sum. Total loss of principal is a realistic outcome, not a remote one. There is no guarantee of any return, no assurance that any investment objective will be achieved, and no protection against loss.

Neither Hill Securities nor its affiliates guarantees any investment, and no federal or state agency, insurer, or protection fund insures you against investment losses. SIPC protection does not cover a decline in the value of securities or the failure of an issuer. Interests in private funds and private companies are not bank deposits, are not insured by the FDIC or any other government agency, and are not guaranteed by any bank.

Different share classes have different rights and different values

A private company's shares are typically divided into classes (common stock and one or more series of preferred stock) with different economic rights. On a sale, liquidation, or other exit, proceeds are distributed according to the seniority and terms of each class: debt is repaid first, then each series of preferred stock receives its liquidation preference in order of seniority, and junior classes, typically common stock, are paid last. A junior class can receive substantially less per share than senior classes, or nothing at all, even when the company is sold for a substantial sum.

Class-specific terms can also shift proceeds between classes in outcomes that are not failures. Participating preferred stock receives its liquidation preference and then also shares pro rata with common stock in the remaining proceeds, leaving less for other holders. Anti-dilution and IPO ratchet provisions can automatically issue additional shares to certain holders when a company raises money or goes public below a threshold price, diluting everyone else. Cumulative dividends accrue over time and increase the amount senior classes must be paid before junior classes receive anything.

A company's headline valuation is generally derived from the price of its most recent preferred round and does not reflect the value of its other classes. The class of securities underlying your transaction, whether held directly or through a private fund, may be a different, more junior class than the one that set that valuation. The transaction or offering documents identify the class of securities involved; confirm it before you invest.

The securities are not registered

The securities bought and sold through Hill Securities have not been registered under the Securities Act of 1933 or under any state securities laws. They are offered and sold in reliance on exemptions from registration, including Regulation D. As a result, they have not been approved or disapproved by the U.S. Securities and Exchange Commission, by any state securities regulator, or by any other regulatory authority, and no such authority has passed upon the accuracy or adequacy of any offering materials or the merits of any transaction. Any representation to the contrary is a criminal offense.

Issuers of unregistered securities are not subject to the periodic reporting, disclosure, and auditing requirements that apply to public companies, and the protections those requirements provide to public market investors do not apply here.

There is no public market, and you should expect to hold indefinitely

These securities are illiquid. There is no public market for them, and none is expected to develop. You should be prepared to hold your investment indefinitely, potentially for many years and potentially until the issuer is acquired, completes an initial public offering, or is otherwise wound up, and any of those events may never happen.

Private secondary transactions of the kind Hill Securities facilitates depend on a willing counterparty, on the issuer's cooperation, and on conditions outside your control. They are limited and intermittent: a price obtainable in a private secondary transaction may be materially below the price you paid or below any valuation shown to you, and at any given time there may be no counterparty at all. Fund interests are typically subject to lock-up periods, transfer restrictions, and limited or no redemption rights, and a fund's term may be extended at the discretion of its general partner or manager. Do not invest money you may need to access on any particular timeline.

An IPO or acquisition is not an exit date

Even if an issuer completes an initial public offering or other liquidity event, you should not expect to receive cash or tradeable shares immediately. Distributions can be delayed by underwriter lock-up periods, holding-period requirements under Rule 144, restrictive-legend removal and transfer-agent processing, and the terms of a fund's organizational documents. The value of underlying shares can change substantially, in either direction, between a liquidity event and the date you can actually sell or receive them.

A transaction may not close, or may close differently than expected

Offerings and transactions are conducted on a best-efforts basis: Hill Securities does not underwrite any offering, does not commit to purchase unsold interests or securities, and does not guarantee that any offering or transaction will be completed. A secondary transaction can fail after agreement on price: the issuer may withhold consent, exercise or assign a right of first refusal, or impose conditions, or the counterparty may withdraw. A fund formed to invest in a particular company may be unable to acquire the intended securities, or may acquire fewer securities, at a different price, or on different terms than expected. Amounts you commit may be held for the period described in the transaction or offering documents, and if a transaction does not close, committed amounts are returned as described in those documents, which may be without interest.

Transfer restrictions and issuer consent

Your ability to transfer these securities is restricted by federal and state securities laws and, separately, by the issuer's own governing documents. Those documents commonly require the issuer's written consent to any transfer and grant the issuer, its investors, or both a right of first refusal or co-sale right that must be waived or run before a transfer can complete. An issuer may withhold consent in its discretion, and issuers do so routinely.

A transfer that is not permitted by law and by the issuer's documents can be void or unenforceable. Even where a transfer is permitted, completing it can take months and can require legal opinions or other conditions at your expense. Neither Trest nor Hill Securities can compel an issuer to consent to a transfer or assure you that any transfer will be completed.

Valuations are uncertain and may not reflect what you can realize

Private securities do not have an observable market price. Any valuation, price, implied price, mark, or return shown to you, whether by an issuer, a fund manager, a third-party data provider, or by Trest or Hill Securities personnel, is an estimate. It may be derived from a prior financing round, from limited or unaudited information, from a third-party model, or from the manager's own judgment; it may be stale; and it is not independently verified by Trest or Hill Securities.

A valuation is not a price at which any security can be bought or sold, is not an indication that a counterparty exists, and may differ materially, in either direction, from the amount you would actually realize on a sale or on a liquidation of the issuer. Because private issuers disclose little, there may also exist material non-public information about an issuer that is not reflected in any valuation, price, or other information shown to you. In a secondary transaction, your counterparty may have information about the issuer that you do not. The price of a private security also reflects factors that do not apply to public securities, including preferences held by other share classes, the absence of a market, and the limited information available to price it.

Past performance is not indicative of future results. Performance shown for any investment, fund, manager, strategy, or asset class does not predict the performance of any investment you make.

You will receive limited information, and may receive none

Private issuers are not required to publish financial statements or to keep investors informed, and many do not. You may receive little or no ongoing information about an issuer's financial condition, operations, capitalization, or prospects after you invest, and the information you do receive may be delayed, unaudited, incomplete, or inconsistent between periods.

Some information provided to you may originate with the issuer, a fund manager, a counterparty, or another third party rather than with Trest or Hill Securities, and neither independently verifies it. Hill Securities does not monitor your investment after you purchase it and does not provide ongoing account, performance, or suitability monitoring.

Many transactions are concentrated in a single company

Many transactions available through Hill Securities involve the securities of a single company, whether held directly or through a private fund formed to hold securities of that one company. A single-asset position provides no diversification: its outcome depends entirely on one issuer, and a loss at that issuer is a loss of the entire investment. Funds that hold more than one position may still be concentrated in a small number of issuers, sectors, or stages. No transaction available through Hill Securities should be treated as a diversified portfolio, and you are responsible for the diversification of your own overall holdings.

Dilution, additional financing, and terms set by others

Issuers typically raise additional capital after your investment. Later financings can dilute your ownership, can be priced below the valuation at which you invested, and can carry liquidation preferences, anti-dilution provisions, or other rights senior to yours. As a minority holder you will generally have no ability to influence the issuer's decisions, no control over the timing or terms of any liquidity event, and limited or no information, inspection, or voting rights. In a private fund, the general partner or manager controls investment decisions, valuation policy, and the timing of distributions, and its interests may differ from yours.

Fees, expenses, and tax

Fees and expenses reduce your return and are charged whether or not an investment is profitable. Depending on the structure, these may include management fees, carried interest or performance allocations, placement fees or commissions, organizational and administrative expenses, and fund expenses. Placement fees and other transaction compensation may be paid by the issuer, by the seller, by the buyer, or by any combination of them, and may be charged separately or included as a component of the purchase price, so the price you pay may include compensation to Hill Securities, and the amount actually invested may be less than the amount you commit. The fee arrangement for any transaction is described in that transaction's documents; review them, because the cumulative effect over a long holding period can be substantial.

These investments can also create tax consequences that are complex, that vary by investor, and that can require you to report taxable income before you receive any cash. Tax documentation such as a Schedule K-1 may be delivered late and may require you to extend your tax filing. Neither Trest nor Hill Securities provides tax advice. Consult your own tax advisor.

Not everyone is eligible to invest

Because these transactions are exempt from registration, participation is limited by law. Most are available only to investors who qualify as accredited investors under Rule 501 of Regulation D, and some are further limited to qualified purchasers, qualified clients, institutional buyers, or other categories defined by federal law. Eligibility criteria are set by regulation and by each issuer, they differ between transactions, and meeting them is a legal condition of investing, not an assessment by Hill Securities that an investment is appropriate for you.

You will be asked to verify your eligibility, and documentation supporting it may be required. Being eligible to invest does not mean an investment is suitable for you. Availability also depends on your jurisdiction, and each issuer decides independently whether to permit or accept your transaction.

Private funds (including special purpose vehicles)

Some transactions are completed through private funds: pooled vehicles, including special purpose vehicles, formed to hold securities of one or more private companies. When you purchase an interest in a private fund, you own an interest in the fund, not the underlying shares: you have no direct rights against the underlying company, your economic outcome depends on the fund's terms as well as the company's, and information about the company reaches you only through the fund's manager, which may receive limited information itself.

Private funds charge fees (typically management fees, carried interest or performance allocations, and fund expenses) that are layered on top of the risks and economics of the underlying securities. Some private funds used in transactions facilitated by Hill Securities are sponsored or managed by affiliates of Hill Securities, Hill Capital LLC and Hill Capital GP LLC, which earn management fees and carried interest on those funds (see Conflicts of interest below). Others are sponsored by unaffiliated fund managers or investment advisers, whose fees, terms, and conduct are governed by that manager's own documents; neither Trest nor Hill Securities supervises an unaffiliated manager.

These funds are not registered as investment companies under the Investment Company Act of 1940, in reliance on exemptions from registration, and investors in them do not receive the protections of that Act, which include independent board oversight and limits on leverage, custody arrangements, and transactions with affiliates. A fund's adviser may be an exempt reporting adviser that files reports with the U.S. Securities and Exchange Commission but is not registered under the Investment Advisers Act of 1940 and is not subject to all of the requirements that apply to registered investment advisers.

Conflicts of interest

Hill Securities and its registered representatives are compensated in connection with the transactions described on this website; Trest Capital, LLC receives no part of that compensation. Compensation for securities transactions (placement fees, commissions, or other transaction-based compensation) is paid to Hill Securities, and Hill Securities compensates its registered representatives in that capacity. Trest, which is not a broker-dealer, receives no transaction-based compensation, and no payments flow from Hill Securities to Trest in connection with broker-dealer activities.

The personnel you deal with under the Trest name act, for all securities activity, as registered representatives of Hill Securities. Hill Securities and its registered representatives have a financial incentive to facilitate transactions, because their compensation increases with transaction activity, an incentive that does not necessarily align with your interests.

Where a transaction is completed through a private fund sponsored or managed by Hill Capital LLC or Hill Capital GP LLC, affiliates of Hill Securities earn management fees and carried interest on the same transaction on which Hill Securities earns transaction compensation. The adviser or manager of such a fund and the broker-dealer facilitating the transaction are under common ownership, and neither is independent of the other. The affiliates that manage a fund also influence its terms, its valuation policy, and the timing of distributions.

A Hill entity may also act as principal. Hill entities may hold, directly or indirectly, positions in securities or fund interests, including securities acquired before a transaction, and may sell those securities or interests to investors, or buy or sell in secondary transactions. Where Hill Securities or an affiliate acts as principal in, or is the counterparty to, a transaction with you, that capacity and any related compensation are disclosed in the applicable transaction documents. Additional detail on Hill Securities' services, fees, conflicts of interest, and standard of conduct is set out in its Form CRS (Client Relationship Summary).

What Trest and Hill Securities do not do

Neither Trest nor Hill Securities provides investment, legal, tax, or accounting advice. Nothing on this website is a recommendation, endorsement, or solicitation with respect to any security or investment strategy, and nothing on this website is an offer to sell or a solicitation of an offer to buy any security. Any offer or sale of securities is made only to eligible investors, through the applicable offering or transaction documents, after eligibility has been determined. Companies shown on this website are illustrative and do not represent live offerings.

You are responsible for your own investment decisions. Hill Securities does not act as your fiduciary, does not manage assets on your behalf, does not take discretion over your investments, and does not monitor your investments after purchase. Consult your own financial, legal, and tax advisors.

Data, valuations, and third-party information

Information about private companies displayed on this website (including company descriptions, financings, valuations, capitalization data, and any estimated or implied prices) is provided for informational and illustrative purposes only. It may be derived from or based on third-party sources; may be incomplete, estimated, unverified, or out of date; and is not independently verified by Trest or Hill Securities. It does not represent the view of Trest or Hill Securities, does not necessarily reflect a price at which any security could be bought or sold, and should not be relied upon in making any investment decision.

Reference to any company name, logo, or trademark does not imply any affiliation with, or endorsement or sponsorship by, that company, and no statement on this website should be attributed to any referenced company. Statements on this website about expected timing of liquidity events, market trends, or the prospects of any company or sector are forward-looking: they are estimates that may change at any time without notice, and actual outcomes may differ materially.

Researching Hill Securities

You can review the background of Hill Securities LLC (CRD #338653) and of its registered persons at no cost on FINRA BrokerCheck. BrokerCheck links for the registered persons named on this website appear alongside their profiles on the About page. Free and simple tools to research firms and financial professionals, along with educational materials about broker-dealers, investment advisers, and investing, are available at Investor.gov/CRS.

Questions

If you have questions about these disclosures or about a specific transaction, contact compliance@hill.com. You may also request a copy of this document and of Hill Securities' Form CRS at no charge.