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In this video, Todd Ault explains the concept of a Subscription Agreement, which is a necessary contract when purchasing stock in a private placement. This agreement confirms that the investor has read and understood the private placement memorandum (PPM), qualifies as an investor, and is committed to buying stock or participating in a limited partnership. Ault shares his experience raising hundreds of millions of dollars over the past 30 years, emphasizing that every investor signs a Subscription Agreement. He highlights its importance in referencing related documents, such as warrant agreements. Additionally, he notes that a Subscription Agreement is typically required when investing in hedge funds or other private entities.