SPV Structure

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.

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 of or has investment exposure to the underlying company or holds shares in another SPV that holds shares of or has investment exposure to 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,and held on the books and records of the applicable SPV.As SPVs are private investments, they often do not qualify for SIPC coverage.

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:

• Regulatory limitations: Most SPVs are structured as 3(c)(1) funds under the Investment Company Act, which restricts them to a maximum of 99 investors. Based on the company minimum investment amount and the SPV investor cap, minimum investment thresholds are necessary to ensure SPVs satisfy the regulatory compliance and company requirements.
• Operational economics: There are fixed costs associated with investor onboarding, compliance verification, document preparation, and ongoing investor relations that make very small investments economically unfeasible.

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.