Pre-IPO Company Subscriptions

Lifecycle

The state transitions of subscriptions are tracked by the status attribute in the InvestorSubscription object. The only subscription status that requires investor action isPending. We recommend explicitly surfacing this status in the frontend UI to prompt timely investor engagement.

Status	Description	Potential Next Status(es)
`Pending`	Immediately upon creation, Subscriptions will be assigned a status of Pending. Subscriptions will stay in a Pending state until the Investor completes the required SubscriptionActions.	`Processing`, `Rejected`
`Processing`	Describes the phase where a Subscription is awaiting one or more checks prior to the SPV officially accepting the Investor. Subscriptions in this stage have had all associated SubscriptionActions completed by the investor, including signing of subscription agreements. Cash should be frozen in the investor's account once the subscription reaches `Processing`. At this stage, there are no further actions that need to be taken by the investor.	`Complete`, `Rejected`
`Complete`	Describes the phase after all actions associated with the Subscription have been completed, cash has been moved out of the investor's brokerage account, funds have been sent to the seller or target company, and subscription documents are countersigned. At this point, the Investor is officially admitted into the SPV, which will be in `CLOSED` status.	`Complete`
`Rejected`	Describes a phase where the Subscription has been rejected, either due to KYC/AML failure, OFAC failure, or otherwise. Monark will manually move Subscriptions into a REJECTED status on an as needed basis.	`Rejected`

Subscription Workflow

Due to the complex workflows associated with facilitating the issuance of private securities, there are a number of pre-subscription checks that need to be completed on each Subscription. The following workflow provides a description of these checks.

Investor submits the amount they intend to invest. Partner creates a Subscription on the Investor's behalf by calling the "Create Subscription" endpoint. At this stage the Subscription is marked as Pending
Investor completes all the SubscriptionActions associated with their Subscription. At this stage the Subscription is marked as Processing. Investor completes all the SubscriptionActions associated with their Subscription. Cash should be frozen in the investor’s brokerage account or moved to a house account at this point. The number of shares, dollars, and seats remaining in the SPV will decrease each time a Subscription reachesProcessing. Frontends should be updated to reflect this.
Before the SPV closes, Monark team members will perform KYC/AML checks (if applicable), FINCEN checks, OFAC checks, and reconcile cash movement for each Subscription. This will take place in the PRE_CLOSE_REVIEW stage. After the checks are complete, Subscriptions will either:
1. Not have a status update, or;
2. Get marked as Rejected and our Partners notified of the rejection. This information will be passed along via webhook. Subscriptions that get Rejected should unfreeze investor cash from their brokerage accounts.
If in Processing, the Subscription will be updated to Complete once the associated SPV is updated to CLOSED. Documents will be countersigned once the Subscription reaches Complete.

Step 3 is required to ensure that the total allocation required by the SPV is successfully met, and that all required regulations are met. All Subscriptions that were not moved toRejected will be updated to Complete once the associated SPV gets pushed to CLOSED