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Special Purpose Vehicles (SPVs)
What is Webull’s Private Markets Product? Webull Private Markets gives qualified clients the ability to invest and gain exposure to private companies by investing in Special Purpose Vehicles (SPVs). These SPVs invest directly in shares of a specific private company or invest into aother SPV that is invested in shares of a specific private company. The investment has direct exposure to the underlying private company. These types of investments are sometimes called Alternative Investments and typically have different risk-return profiles and often lower correlation with public markets than traditional investments. What is a Special Purpose Vehicles? When you invest in a private company through Webull Private Markets, you're purchasing an interest in a Special Purpose Vehicle (SPV) that holds shares of the underlying company or that holds shares in another SPV that holds shares of the underlying company. These SPVs are structured as Limited Liability Companies (LLCs) specifically designed to facilitate private company investments for retail investors. Your ownership percentage in the SPV corresponds to your pro-rata economic interest in the underlying company shares. Membership interests are 1:1 with the underlying shares held by the SPV. SPV investments are currently limited by regulation to only 99 investors per offering and therefore there are minimum dollar amounts to invest. What is Webull’s relationship with Monark? Webull Financial maintains a referral arrangement with MMM Securities LLC (“Monark”) to enable eligible clients of Webull to access and invest in private offerings of securities offered by affiliates of Monark or by third parties utilizing Monark’s platform. Through this referral arrangement Webull clients are able to view SPV Offerings through Webull’s various platforms, accessing documents and other materials related to the Offerings, and able to utilize available funds in your brokerage account held at Webull to invest. Investments are not custodied at Webull but are held on the books and records of the Issuer. How Do I Invest? Unlike public securities traded on exchanges, most private company investments or Special Purpose Vehicles (SPVs) that invest in private companies aren't readily available through standard brokerage accounts. Webull Private Markets makes these investments available to qualified investors directly through their Webull brokerage account. To access Private Markets investments, visit the Private Markets section on the App. By clicking on Companies, you will be able to access market data, news, and information on the largest private companies you might be interested in. In order to see live and prospective offerings, you will need to click into "Live Offerings" or "Prospective Offerings," but first you need to self-attest to being an Accredited Investor (AI) - please see FAQ #7 below, "Who is Qualified to Invest," for more information on Accredited Investor (AI) status. What are Prospective Offerings: The "Prospective Offering" section will have a list of possible upcoming private company SPV offerings. Here you can enter a non-binding Indication of Interest (IOI) - please see FAQ #6, "What is an Indication of Interest," for more detail - if you are interested in an investment in this private company SPV should it become available. If the offering does become available, you will be notified and can then invest. IOIs are non-binding and help us gauge our clients' interest in specific private companies and help us guide which private company SPV investments we should make available. They are non-binding and you may choose not to invest. What are Live Offerings: The "Live Offering" section will have a list of all available private company SPVs currently on offer. By clicking into a specific live offering, you can review offering documents and submit an order. Investment documents are available with specifics on the offering and should be reviewed before submitting an order. You will be asked to review documents and e-sign as part of the order submission process. Unlike IOIs, orders are binding and not cancellable. You need to have settled cash in your account in the amount of your order and funds will be locked up until the offering is closed or cancelled. Once the SPV is fully subscribed, your order will be processed, funds deducted from your account, and your Private Markets investment will show up in your brokerage account. Who Is Qualified to Invest? To invest in a Private Company SPV, a client must be an accredited investor. An accredited investor is an individual or entity that meets specific financial criteria established by securities regulators. In the United States, an individual qualifies as an accredited investor by meeting any one of these conditions:
Why Should I Consider Private Markets Investments? Private Market investments, also referred to as Alternative Investments or Alternatives, can offer several potential benefits within a diversified portfolio:
What Are the Risks of a Private Market Investment? Alternative investments involve unique considerations and risks that differ from traditional investments:
How Does Investing in Alternative Investments Differ from Investing in Publicly Traded Equities? There are many differences between alternative investments and publicly traded equities. While the answers may vary depending on the specific alternative investment as well as the structure or method of investment, the table below highlights some high-level differences. |
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About Special Purpose Vehicles When you invest in a private company through Webull Private Markets, you're purchasing an interest in a Special Purpose Vehicle (SPV) that holds shares of the underlying company or that holds shares in another SPV that holds shares of the underlying company. These SPVs are structured as Limited Liability Companies (LLCs) specifically designed to facilitate private company investments for retail investors. Your ownership percentage in the SPV corresponds to your pro-rata economic interest in the underlying company shares. Membership interests are 1:1 with the underlying shares held by the SPV. SPV investments are currently limited by regulation to only 99 investors per offering and therefore there are minimum dollar amounts to invest. What Am I Buying When I Invest in a Private Company SPV? When you invest in a private company through Webull Private Markets, you're purchasing an interest in a Special Purpose Vehicle (SPV) that holds shares of the underlying company OR you are buying an interest in an SPV that holds shares of another SPV that holds shares of the underlying company. These SPVs are structured as Limited Liability Companies (LLCs) specifically designed to facilitate private company investments. Your ownership percentage in the SPV corresponds to your pro-rata economic interest in the underlying company shares. Membership interests are 1:1 with the underlying shares held by the SPV. What is a Double-layered SPV? A double layered SPV is a SPV that does not directly own shares of the underlying private company. Instead, it gets investment exposure to the private company by owning shares of another SPV that owns shares of the underlying private company. Ownership interest in the underlying private company is 1:1 with the number of shares held in the SPV. Do I Own Direct Stock in the Company? No. As an investor in an SPV, you own an interest in the SPV entity itself, which in turn holds shares in the underlying company or holds shares in another SPV that holds shares of the underlying company. Your economic rights flow through the SPV structure, giving you indirect exposure to the company's performance and liquidity events. How Are These Investments Custodied? Currently, these assets are self-custodied by the Issuer. All of the supporting documentation as well as ongoing investor updates and tax documents will be available through your Webull brokerage account. Self-custody is how most private markets assets are currently custodied. Why Do SPVs Have Minimum Investment Amounts? Many SPVs maintain minimum investment thresholds that range from $10,000 to $50,000+ depending on the SPV's target size. These minimums exist for a few primary reasons:
By establishing appropriate minimum investment thresholds, SPV managers can strike the optimal balance between accessibility and operational efficiency, ensuring the vehicle remains economically viable while providing access to opportunities that would otherwise be unavailable to individual investors. What Is a Subscription Agreement? A Subscription Agreement is a legally binding contract between an investor and an investment vehicle (such as an SPV) that formalizes the terms of the investment. This agreement includes:
The Subscription Agreement is a critical legal document that investors should review carefully before signing. Our platform facilitates digital execution of these agreements to streamline the investment process. You will be required to sign this document digitally as part of the order submission process. What Is a Private Placement Memorandum? A Private Placement Memorandum (PPM), also called an Offering Memorandum (OM) or Offering Circular (OC), is a comprehensive disclosure document provided to prospective investors in a private placement. The PPM includes:
The PPM serves as the primary information source for investors evaluating a private placement opportunity and should be reviewed thoroughly before making an investment decision. Reviewing the PPM is part of the order submission process. What is the Risk Factors document? The risk factors document provides investors with general risk disclosure information regarding investing in private companies, the underlying private company in which the SPV is investing, as well as any transaction risk associated with the SPV offering. For example, if an SPV is a “double-layer” structure, where one SPV is investing in another SPV that owns shares in the private company, that factor will be disclosed in the risk factors document. Investors should read the risk factors document carefully before making an investment decision What is an Operating Agreement or LLCA? Each SPV is a separate, bankruptcy remote LLC. The LLCA or “Operating Agreement” defines the structural, organizational and operational matters associated with each LLC. Such matters include, amongst other things; the name of the entity, jurisdiction of formation and operation, operating procedures, rights of the members, taxes, distributions and transfers. Investors should review the LLCA or “Operating Agreement” before making any investment decisions. What Fees Are Associated with Private Markets Instruments? Webull Private Markets investments in a private company SPV typically involve a brokerage fee on the transaction and an up-front management fee that is charged by the SPV manager. These fees are fully transparent and readily accessed in the offering documents. Brokerage and management fees, along with the underlying company investment, make up the all-in price that investors will pay. Can I Negotiate Brokerage Fees or Management Fees? Brokerage fees and/or management fees are standardized across the platform and apply uniformly to all investors. These fees are set to align with industry standards for private market transactions and are not negotiable on an individual basis. The fee structure for each opportunity will be transparently disclosed prior to investment. Access to Private Company Marketplace Research Investment Opportunities & Indicate Interest What is an Indication of Interest? An Indication of Interest (IOI) is a non-binding expression of potential interest in investing in a specific private company. IOIs help us gauge investor demand and prioritize sourcing efforts for specific companies. Submitting an IOI signals potential interest but does not obligate investors to invest when an opportunity becomes available. Are IOIs binding commitments? No, indications of interest are entirely non-binding. An IOI simply signals your potential interest in an investment opportunity if it becomes available at terms that meet your criteria. You maintain complete flexibility to evaluate the formal offering and make your final investment decision when a deal goes live. What happens if I submit an IOI but don't invest? There are no consequences for submitting an IOI and subsequently deciding not to invest. IOIs are used purely for demand assessment and deal prioritization. Your investment decisions remain entirely at your discretion when formal opportunities become available. However, we would ask that you only submit IOIs for offerings that you are genuinely interested in and likely to make an investment in. Complete the Investment Process Can I Sell My SPV Position? Shares held by the SPV are generally considered "restricted securities" under US securities laws, which typically requires a one-year holding period from the date of purchase before they can be resold. There is no guarantee that a viable, liquid marketplace will be available after one year or that Webull will provide access. What Happens If a Company I’m Investing in Goes Public? When a private company that an SPV is invested in completes an IPO, the shares held by the SPV are typically subject to a 180-day lock-up period following the IPO, during which they cannot be sold. After the lock-up period expires, shares of the newly listed company will appear in your Webull brokerage account and will be available to trade. What Happens If a Company I’m Investing in Gets Acquired? Acquisitions of portfolio companies can take different forms, and the outcomes for investors will depend on the specific transaction structure:
Whatever the make-up of the final distribution, assets will be available in your Webull brokerage account. What Happens If a Company I’m Investing in Goes Bankrupt? Corporate bankruptcies can result in various outcomes for shareholders, typically determined by the bankruptcy proceedings:
As an SPV investor, your financial exposure is limited to your initial investment amount. The SPV will represent shareholder interests in bankruptcy proceedings and distribute any recovery value proportionately to investors, though full loss of investment is a possible outcome in bankruptcy scenarios. When Can I Expect a Liquidity Event for My Private Company Investment? Private company investments should be approached with a long-term perspective, as there is no guaranteed timeline for liquidity events. The path to liquidity depends on numerous factors:
There is substantial variation in the timelines that companies go public or get acquired. While Webull will work to provide investors with a solution for secondary liquidity, there can be no guarantee that the market develops. As such, investors should be prepared for the possibility that investments may remain illiquid for extended periods or, in some cases, indefinitely. |