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In this video, Todd Ault discusses the concept of a Subscription Agreement, which is essential when purchasing stock from a company through a private placement. The agreement signifies that the investor has read and understood the private placement memorandum (PPM), is qualified, and commits to the purchase. Ault shares his extensive experience in raising substantial capital, highlighting that every investor he worked with signed a subscription agreement. This agreement ensures reference to the PPM and other associated documents, such as warrant agreements. Ault also notes that signing a subscription agreement is common when investing in hedge funds or other private entities, emphasizing its importance for startups as well.