Glossary terms

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Active Income: What It Is and What It Is Not

Active income is sometimes known as a form of set salary which an employee receives monthly or bi-weekly for completing a specific job or upfront work.

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Allocation Defined and Explained

An offering that is allocated to an investor comprises a certain percentage of the total offering vehicle, based on investment amount and split pro-rata. Read more about it here.

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Amortization: What It Is and How It Works

Amortization refers to both the principal and interest payments made throughout the loan repayment plan. Amortization is used for various types of loans.

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Appreciation: Definition and Formula

The fiscal value increase of a set asset over time is influenced by interest rates, inflation, a decrease in market demand, or an increase in demand.

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Asset-based Investments: The Basics

Asset-based investment, sometimes referred to as asset-based financing, is a form of investment that collateralizes company securities to obtain a loan. Find out more.

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Basis Point: How It Is Used

A financial unit of measurement is usually equal to 1/100th of 1%. Basis point or BPS can be used to measure interest rates or yield on specific securities.

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Capitalization (Cap) Rate: RoR Calculation

A calculation is used to help determine the potential Rate of Return (RoR) on a real estate investment.

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Carried Interest: Fund Manager Compensation

Carried interest acts as the basic compensation for a fund manager. It’s a share of the profits from the investment that is paid to the investment manager. Carried interest explained in full here.

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Collateral: Asset-Based Loans

Loans in which the borrower will offer assets as collateral to secure the loan. If the borrower defaults the lender will have ownership of those assets. Find out more about collateral here.

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Common Equity: How Companies Use It

Common equity includes the value of shares of common stock, earnings and paid-in capital, and the number of investments in a company made by investors.

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Compound Interest

The accumulated interest of a loan or deposit for previous periods and on principal payments made. It’s also simply known as “interest on interest.” We expand here.

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Confession of Judgement

A legal written agreement is signed by the lender, agreeing to repay any money owed to the creditor (borrower) to avoid court action to resolve disputes. Learn more about it here.

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Contingency Fee Representation

When a plaintiff is represented on a contingency fee basis, no legal fees are paid until they have won their case, the lawyer receives a percentage thereof. Broader description available here.

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Correlation

A mutual relationship between two different investments that have a similar response to market influence and market-related forces. A full description here.

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Cost Basis: A Key Tool for Investors

Learn how to calculate capital gains, handle taxes effectively, and choose the right cost basis model with our short guide.

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Cost of Capital

Cost of capital refers to the minimum rate of return a business or company has to generate before a new purchase, or investment starts to make money. Find out more.

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Covenants: Safeguards in Debt Agreement

An indenture that is entered by a borrowing party or individual to proclaim which activities may or may not be carried out, these include certain agreements. Here you can learn more.

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Debt: Types and Their Implications

Money owed on financial instruments that were borrowed from a financial lender or institution. The borrower is required to repay the debt or return the value thereof.

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Default: Risks and Recovery Strategies

When a borrower is unable to make repayments on their loan according to previously agreed-upon terms and conditions, known as being “in default.” Default explained here.

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Disbursement

Payments made by any private or public fund to investors. Companies use disbursements to complete the final payment on any form of goods and expenses. Examples available here.

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DRIP for Maximum Returns

Dividend Reinvestment Plan is a scheme through which investors reinvest their earnings or dividends back into stocks of the company.

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Equity: Assets Minus Liabilities

The remaining value of an asset after the deduction of all liabilities, there two types, tangible and intangible assets.

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Free Cash Flow

Free cash flow is the amount of cash available after a company has paid its operations and other capital expenditure.

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HNWI or High Net Worth Individuals

Typically known as an HNWI, this individual has financial assets, excluding primary residence that exceeds the $1 million and does not surpass $5 million. HNWI described in full.

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Internal Rate of Return

The method used to evaluate the attractiveness of an investment opportunity. The IRR presents cash flows equal to zero. Learn more here.

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Inventory Essentials and Types

All tangible goods are housed by a business with the intent of it being sold as part of business operations, for example, food, clothing, car parts, etc. A full description here.

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Inventory Financing

Asset-backed lending makes use of company inventory as a form of collateral to help secure a loan. Inventory can be seized when borrowers default. Full description available.

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Investment Memorandum

The investment memorandum acts as a profile considering all investments to determine whether the offerings will meet the client’s desired needs. Example of investment memorandum included here.

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Investment Property

A property or real estate that is held by an investor for the practice of retaining capital income or appreciation from it.

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Irrevocable Letter Of Direction (LOD)

Known as a letter of direction gives the recipient-specific rights regarding the sender or writer’s finances, written to a bank or family members. LOD explained better here.

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Jumpstart Our Business Startups (JOBS) Act

The JOBS Act was a bipartisan project led by Obama and Congress to leverage the use of crowdfunding, democratizing access to capital for both large and small businesses.

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Liens Explained: Types and Forms

A legal action in which a lender seizes the property of the borrower that’s failed to make payments on a loan. Property is held until repayments are made. A broader description is available below.

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Linear Income

A linear income can be a job where you need to either clock in for every shift or be present in-office to physically receive your wages or income.

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Liquidity in Economis and Business

The rate at which assets owned by an individual or company can easily be sold off for cash. These can include publicly traded stock or Treasury Bills. Learn more about liquidity here.

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Liquidity Premium

Liquidity premium refers to a type of investment that cannot be sold at a fair market value, where investors require additional security on the available asset.

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Loan-to-Cost Ratio (LTC)

Determines the amount of debt relative to the cost of purchasing a property in commercial mortgage financing and multifamily financing.

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Loan-To-Value (LTV)

Used to calculate and evaluate collateral. This refers to the loan amount and the underlying assets which determine the cushion the borrower has. Here is a full LTV description.

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Mass Tort Explained: When It Is Used

The civil action of numerous plaintiffs against selected or multiple corporate defendants. These civil grievances are resolved in state or federal courts. Mass Tort fully explained here.

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Multiple on Invested Capital (MOIC)

MOIC is a performance metric for private market investments, which indicates the multiple of capital returned at investment maturity. In essence, it shows how many times an investor’s initial capital is regained.

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Net Asset Value (NAV)

NAV is used to determine the market value of the mutual fund. This instrument is used to estimate whether a fund is under or overvalued.

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Non-recourse

The lender pledges a form of collateral, i.e. real estate or property, for which the borrower is not personally liable. More details are available here.

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Of coupons, yields, rates and spreads: What does it all mean?

Fixed income terms are often used interchangeably, despite referring to different financial concepts. Interpreting these terms correctly can help investors calculate potential return and better value their income opportunities.

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Operating Agreement

Bylaws described in an operating agreement, members and investors agree to operate the newly formed SPV. These apply to Yieldstreet offerings. Learn what to include.

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Originators Explained: Connecting Borrowers and Lenders

Originators assist with determining the terms of the loan with the borrower, performing due diligence. The originator acts as the liaison for the borrower.

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Participation

An originator that sells parts of a loan to individuals, businesses, and financial investment firms. Participation can be 100% or as little as 5%. Learn about this concept.

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Participation Agreement

An agreement was signed by the originator and investors. With YieldStreet, managers of the SPV sign the agreement as a proxy to purchase a loan percentage. See a more detailed description here.

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Payment Frequency

The frequency represents how often investors should receive forms of principal or interest repayments on their investments. Here you can find out more.

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Plaintiff Defined: Initiator of Legal Actions

An individual or group which begins a new case in the court of law against a defendant, both parties are represented by an attorney or lawyer. The definition is expanded here.

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Post-settlement funding

Funding is allocated to a plaintiff before any compensation from the settlement of the case can be accessed or received by the plaintiff. Description expanded.

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Pre-settlement Funding

Non-recourse funding plaintiffs receive while awaiting to start or resume the trial. This funding is allocated for personal use and legal fees. Explained in full.

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Preferred Return

Gives preference to a class of equity above a common preferred class concerning the overall distribution of profits among shareholders.

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Private Equity Fund

A manageable investment scheme controlled by an investment broker or a limited liability partnership houses a collection of equities and debt securities.

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Pro-rata Explained: How to Calculate It

A Latin phrase that describes a proportionate allocation of a certain amount. This will include a fraction amount according to its share of the whole. Pro-Rata explained.

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Recurring Income

Earnings that a person receives on investment or asset that continuously pays profits without the investor having to put in additional work.

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Regulation A+

Allows companies, startups, and entrepreneurs to raise funding capital from the entire public which includes both accredited and non-accredited investors.

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Regulation D

An exemption within the Securities Act of 1933 allows investors and companies to qualify for exemptions under the registration requirements.

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Residual Income

Residual income is earned by completing upfront work, and receiving a salary or set wage and is the amount of money left after covering expenses and taxes.

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Secured vs Unsecured Position

A secured position allows one to secure a loan using collateral, whereas an unsecured one does not require upfront collateral beforehand.

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Senior Debt

Debt takes priority over other forms of equities and debts if a company or investor defaults on their loan repayments.

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Senior Debt in Business Financing and Growth

The order in which a company is required to pay off debt is usually above junior debt, applicable to companies who are operational or who have filed for bankruptcy. We expand here.

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Senior-secured

A portion or part of the debt is paid off first secured with collateral. Normally offered by corporations, Limited Liability Companies or a Limited Partnership. More on this topic.

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Settlement: What It Is and How It Works

An agreement or resolution between two or more disputing parties about a legal matter. Settlement is agreed upon before the commencement of a court case. Topic expanded here.

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SPV or Special Purpose Vehicle

A company can form an SPV, a separate entity from the primary company which is used to secure and privatize any form of company investment. Examples of SPV.

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Step-Up In Basis

A tax loophole for investors and corporations to help bypass capital gains taxes for assets that are passed on.

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Subscription Agreement

An agreement signed by all investors looking to purchase a portion of a Special Purpose Vehicle. Each investor will have pro-rata ownership of the SPV. See more here.

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UCC-1 / Perfected Interest

A legal financing statement filed by a creditor allows them to give notice that it has or may have an interest in the personal property of a debtor. Examples available here.

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Underwriting

An underwriter performs a background check on a borrower to determine whether the person can repay the loan and if they can offer collateral.

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What Does NOI Mean in Real Estate?

Learn what NOI stands for. It’s a calculation used in rental property by the investor or property buyer to determine the potential profitability of their property investment purchase.

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Yield Explained: How to Measure Investment Income

Capital income is received from an investment, either being stocks or shares. Higher-yielding stocks are more lucrative and sometimes the most preferred option on the market.

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We believe our 10 alternative asset classes, track record across 470+ investments, third party reviews, and history of innovation makes Yieldstreet “The leading platform for private market investing,” as compared to other private market investment platforms.

1 Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

3 "Annual interest," "Annualized Return" or "Target Returns" represents a projected annual target rate of interest or annualized target return, and not returns or interest actually obtained by fund investors. “Term" represents the estimated term of the investment; the term of the fund is generally at the discretion of the fund’s manager, and may exceed the estimated term by a significant amount of time. Unless otherwise specified on the fund's offering page, target interest or returns are based on an analysis performed by Yieldstreet of the potential inflows and outflows related to the transactions in which the strategy or fund has engaged and/or is anticipated to engage in over the estimated term of the fund. There is no guarantee that targeted interest or returns will be realized or achieved or that an investment will be successful. Actual performance may deviate from these expectations materially, including due to market or economic factors, portfolio management decisions, modelling error, or other reasons.

4 Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

5 Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

6 The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments, excluding our Short Term Notes program, weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including July 18th, 2022, after deduction of management fees and all other expenses charged to investments.

7 Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Alternative Income Fund before investing. The prospectus for the Yieldstreet Alternative Income Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to www.yieldstreetalternativeincomefund.com. The prospectus should be read carefully before investing in the Fund. Investments in the Fund are not bank deposits (and thus not insured by the FDIC or by any other federal governmental agency) and are not guaranteed by Yieldstreet or any other party.

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9 Statistics as of the most recent month end.

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