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In this video, Todd Ault explains the concept of a Subscription Agreement. He defines it as a contract required when purchasing stock in a company's private placement. By signing a Subscription Agreement, investors confirm they have read and understood the private placement memorandum (PPM), are qualified, and commit to the investment. Ault shares his experience, noting that he has raised substantial funds over 30 years, with every investor signing such agreements. Subscription Agreements ensure proper reference to the PPM and related documents. He also mentions their necessity in hedge funds and private entities, highlighting their importance for startups raising capital.