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In this video, Todd Ault discusses the concept of a Subscription Agreement, which is essential when purchasing stock in a private placement. It requires investors to acknowledge that they have read and understood the Private Placement Memorandum (PPM) and confirms their qualifications and commitment to invest. Ault emphasizes the importance of subscription agreements in his extensive experience raising millions to hundreds of millions of dollars over 30 years, noting that every investor must sign one. These agreements ensure references to the PPM and any related documents, such as warrant agreements. He also mentions that subscription agreements are commonly signed when investing in hedge funds or other private entities, particularly relevant for startups raising capital.