Legal Glossary


A financial instrument which represents financial value to its Issuer (e.g. debt or equity).

Seed Capital

Money invested in an early stage company by third party investors.

Seed Financing

The first round of financing from third party investors to provide Seed Capital to an early stage company. Seed Financing can be raised through either equity and/or convertible debt.

Seed Investor

A third party investor who provides Seed Capital to an early stage company.


A unit of Equity in a Company.

Simple Agreement for Future Equity

SAFE. An agreement between a Company and an Investor where the Investor invests money in the Company and, in exchange, receives the right to purchase Shares in a future equity round when it occurs.

ScaleUp has a SAFE document {here}.

Small Claims Tribunal at DIFC Courts

SCT. A Tribunal of the DIFC Courts with power to hear and determine claims within the DIFC Courts’ jurisdiction and where the claim is (i) for an amount less than AED 500,000, (ii) an employment matter and the parties agree the SCT may hear the claim, or (iii) for an amount less than AED 1,000,000 and the parties agree in the underlying agreement the SCT may hear the claim.

Special Purpose Vehicle

SPV. Has different meanings depending on the context in which it is used. An entity formed for a particular purpose such as participating in a transaction or ringfencing certain assets and liabilities to prevent them from affecting other companies in the group. In ADGM, a Special Purpose Vehicle is a particular type of company which may be incorporated in that jurisdiction for a range of purposes.

Strategic Investor

An Investor that invests in a Company for strategic or commercial, rather than purely investment, reasons. A Strategic Investor is usually an Investor operating in the same industry as the Company in which it invests.

Subscription Agreement

An agreement in which an Investor agrees to subscribe for the Shares in a Company on the terms set out in that agreement.


A Company that is owned and/or controlled by another Company (its Holding Company). In some jurisdictions, the test for whether a Company is a Subsidiary of another company depends on factors such as the holder of the majority of the voting rights in the Company and the ability to appoint Directors.

Sweat Equity

A party receives an ownership interest in a Company in return for their non-financial contributions to it (e.g. their work and effort).