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In this video, Todd Ault discusses the concept of a Subscription Agreement, which is necessary when buying stock through a private placement. He explains that signing this agreement confirms the investor has read and understood the private placement memorandum (PPM) and affirms their commitment to purchase stock or join a limited partnership. Ault emphasizes that, throughout his 30 years of raising hundreds of millions of dollars, every investor signed a subscription agreement. This document ensures that investors are aware of related agreements, such as warrant agreements. He notes that subscription agreements are also used when investing in hedge funds and other private entities, highlighting their importance in fundraising for private companies and startups.