# What is Special Purpose Vehicle? Definition & Technical Mechanics

> **Source:** [SPIDITS AI Startup & Venture Intelligence Glossary](https://spidits.com/startup-glossary)  
> **Category:** Funding  
> **Canonical Citation:** [https://spidits.com/startup-glossary/spv](https://spidits.com/startup-glossary/spv)

## Definition
A Special Purpose Vehicle (SPV) is a legal entity created to pool capital from multiple individual investors to make a single investment in a specific startup.

## Architectural Mechanics & Deep Dive
A Special Purpose Vehicle (SPV) is a legal entity created to pool capital from multiple individual investors to make a single investment in a specific startup. SPVs are widely used by syndicates to keep a startup's cap table clean.

## Industry Applications & Real-World Use Cases
Syndicate investments and cap table aggregation

## Frequently Asked Questions

### Why do startups prefer SPVs?
It keeps the cap table clean by listing a single entity instead of dozens of minor angel investors.

### Who manages an SPV?
A syndicate lead or fund manager who handles administrative duties and collects carried interest on profits.

## Related Terminology
- [syndicate](https://spidits.com/startup-glossary/syndicate)
- [cap-table](https://spidits.com/startup-glossary/cap-table)
- [angel-investor](https://spidits.com/startup-glossary/angel-investor)

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*From the SPIDITS AI Knowledge Base (300+ terms indexed). Explore full technical definitions: [https://spidits.com/startup-glossary](https://spidits.com/startup-glossary)*