What is Special Purpose Vehicle?
Special Purpose Vehicle
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.
Why It Matters for Startups
Directly dictates the cap table and dilution structure during fundraising; understanding Special Purpose Vehicle helps founders model equity distributions when structuring rounds for syndicate investments and cap table aggregation.
Detailed 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.
Frequently Asked Questions
Q:Why do startups prefer SPVs?
It keeps the cap table clean by listing a single entity instead of dozens of minor angel investors.
Q:Who manages an SPV?
A syndicate lead or fund manager who handles administrative duties and collects carried interest on profits.
Quick Facts
- CategoryFunding
- Key ApplicationSyndicate investments and cap table aggregation
Coverage Trend12 Weeks
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