Disclosures

Hill Securities LLC

CRD #338653
Member FINRA / SIPC

About this page

Hill Securities LLC ("Hill Securities," "we," "us," or "our") acts as placement agent for private offerings of unregistered securities, including interests in private funds and securities of private companies. This page collects the disclosures you should read before working with Hill Securities: the essential risks of investing in those securities, the conflicts of interest inherent in how we and our affiliates are paid, and the limits of the information shown on this website and on the Hill platform.

Investing in privately offered, unregistered securities is speculative and involves a high degree of risk, including the risk of losing your entire investment. These investments are not suitable for every investor. You should invest only money you can afford to lose entirely and only after reviewing the offering documents for the specific investment and consulting your own financial, legal, and tax advisors.

This page is a summary of general risks and disclosures that apply across the offerings Hill Securities places. It does not describe every risk of any particular investment, and it does not replace the offering documents for that investment. The offering documents (including the private placement memorandum, limited partnership agreement, subscription agreement, or equivalent) contain additional risks specific to the issuer and the offering, supplement everything on this page, and govern in all cases. 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, and Hill Securities does not carry or hold customer accounts or take custody of your cash or securities. 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 investment may be a different, more junior class than the one that set that valuation. The offering documents identify the class of securities a vehicle holds or intends to acquire; confirm it before you invest.

The securities are not registered

The securities offered through Hill Securities have not been registered under the Securities Act of 1933 or under any state securities laws. They are offered 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 offering. 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.

Neither the funds nor their adviser is subject to registered-fund oversight

Funds offered through Hill Securities are not registered as investment companies under the Investment Company Act of 1940, in reliance on exemptions from registration. Investors in these funds do not receive the protections of that Act, which include independent board oversight and limits on leverage, custody arrangements, and transactions with affiliates. Hill Capital LLC, the affiliate that acts as investment adviser to certain funds, is an exempt reporting adviser: it 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.

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.

Where a private secondary market exists for a given security, it is limited, intermittent, and dependent on a willing buyer, on the issuer's cooperation, and on conditions outside your control. A price obtained in such a market may be materially below the price you paid or below any valuation shown to you, and there may be no bid 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.

An offering may not close, or may close differently than expected

Offerings are conducted on a best-efforts basis: Hill Securities does not underwrite any offering, does not commit to purchase unsold interests, and does not guarantee that any offering will be completed. A fund or vehicle 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 duration of the investment period described in the offering documents. If an offering does not close, committed amounts are returned as described in the offering 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 Hill 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 on the Hill platform, 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 Hill or Hill Securities.

A valuation is not a price at which any security can be bought or sold, is not an indication that a buyer 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. 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 or a third party rather than with Hill Securities, and we do not independently verify it. Hill Securities does not monitor your investment after you purchase it and does not provide ongoing account, performance, or suitability monitoring.

Many offerings are concentrated in a single company

Many of the vehicles offered through Hill Securities are formed to hold securities of a single company. A single-asset fund 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 investment offered 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 fund or vehicle, 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, organizational and administrative expenses, and fund or vehicle 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 investment is described in that investment's offering 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 Hill nor Hill Securities provides tax advice. Consult your own tax advisor.

You depend on Hill and its service providers

Your investment is serviced through Hill entities and their third-party providers: ownership records, communications, tax documents, and distributions flow through the Hill platform and the settlement, records, and banking providers it uses. Operational disruptions, including cybersecurity incidents, system failures, and the failure of a third-party provider, could delay or impair your access to information, the processing of transactions, or the delivery of distributions.

If a Hill entity were to cease operating, the funds and vehicles you invested in would continue to exist, but their administration, the flow of information to you, and any secondary-market opportunities could be delayed, degraded, or lost. Over a holding period that may last many years, you are relying on the continuity of Hill and its service providers as well as on the issuer.

Not everyone is eligible to invest

Because these offerings are exempt from registration, participation is limited by law. Most offerings 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, or other categories defined by federal law. Eligibility criteria are set by regulation and by each issuer, they differ between offerings, and meeting them is a legal condition of investing, not an assessment by Hill Securities that an investment is appropriate for you.

We will ask you to verify your eligibility, and we may be required to obtain documentation supporting it. 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 accept your investment.

Conflicts of interest

Hill Securities is compensated in connection with the offerings it places, and its affiliates are compensated on the same transactions. Hill Securities acts as placement agent for private offerings that are sponsored, managed, or advised by our affiliates, Hill Capital LLC and Hill Capital GP LLC, and earns placement fees in connection with those offerings. On the same transactions, Hill Capital LLC and Hill Capital GP LLC earn management fees and carried interest.

Within the Hill group, each entity plays a different role in the same transaction. Hill Securities LLC is a broker-dealer registered with the SEC and a member of FINRA and SIPC. Hill Capital LLC, an exempt reporting adviser, acts as investment adviser to certain funds and vehicles offered through Hill Securities, and Hill Capital GP LLC acts as the manager of the limited liability company vehicles. The adviser managing a fund and the broker-dealer placing it are under common ownership, and neither is independent of the other.

This creates conflicts of interest. Hill Securities and its affiliates have a financial incentive to recommend investments that generate compensation for the Hill group of companies, and to recommend affiliated offerings over unaffiliated alternatives that might be available to you elsewhere. Our compensation increases as you invest more and as you remain invested, which is an incentive that does not necessarily align with your interests. The affiliates that manage an offering also influence its terms, its valuation policy, and the timing of distributions, and Hill Securities is not independent of them.

Hill or an affiliate may also act as principal. Hill entities may hold, directly or indirectly, positions in securities or fund interests offered through the platform, including securities acquired before an offering, 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 offering or transaction documents.

Hill Securities may also refer investors to unaffiliated third-party investment advisers or their representatives, and may receive a fee for making the referral. A referral fee gives Hill Securities an incentive to make referrals and to favor advisers or representatives that compensate it. Any such arrangement, including the compensation involved, is disclosed at the time of the referral. Services an unaffiliated adviser provides to you are governed by your agreement with that adviser; Hill Securities is not a party to that relationship and does not supervise the adviser.

Hill Securities' brokerage services to retail investors consist principally of recommending and facilitating the purchase of privately offered, unregistered securities, primarily those of our affiliates. We do not offer publicly traded securities and we do not survey the wider market on your behalf, so the set of investments we present to you is narrow by design. Additional detail on our services, fees, conflicts of interest, and standard of conduct is set out in our Form CRS (Client Relationship Summary).

What Hill and Hill Securities do not do

Neither Hill Technologies Inc. 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 offering of securities is made only to eligible investors, through the applicable offering documents, after you have registered and been determined eligible. Companies and opportunities shown on public pages of 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.

Data, valuations, and third-party information

Information about private companies displayed on this website and on the Hill platform (including company descriptions, financials, valuations, capitalization data, charts, 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 Hill or Hill Securities. It does not represent the view of Hill 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.

Any ticker symbols or other identifiers used on this site are for use on the Hill platform only and do not refer to any publicly traded security. 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 site should be attributed to any referenced company.

Statements on this site 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. 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.

USA PATRIOT Act notice

Important information about procedures for opening a new account. To help the government fight the funding of terrorism and money-laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.

What this means for you: when you open an account, we will ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents, and we may screen your information against government watch lists as required by law. We may be unable to open an account, or may need to restrict or close an account, if we cannot verify the required information.

Questions

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