A Special Purpose Vehicle is a legal entity created for a single investment deal Pools capital from multiple investors into one line item on a startup's cap table SPV sponsors organize the deal and typically invest their own capital alongside investors Structured as an LLC under Regulation D (Rule 506(b) or 506(c)) exemptions

Lighter than a full VC fund — no ongoing portfolio management or multi-year commitments Founders prefer fewer cap table entries, making an SPV cleaner than many individual angels Allows sponsors to participate in deals that may require more capital than they can deploy alone Investors get access to curated deals they might not find on their own

Platforms like AngelList, Carta, and Assure streamline formation and compliance Setup typically costs $5,000-$15,000 including legal, formation, and platform fees Allow 2-4 weeks for legal setup, investor documentation, and platform onboarding Standard fee structure: 15-25% carried interest on gains, often with no management fee

Sponsor Responsibilities

Perform due diligence on the investment opportunity and share materials with investors Prepare and distribute a Private Placement Memorandum (PPM) or equivalent disclosure Manage ongoing investor communications, K-1 tax distributions, and eventual liquidation Fiduciary duty to investors — decisions must be made in their best interests

SPVs are a practical way to invest in startups without launching a full fund Understand securities laws and investor eligibility before raising any capital Budget for legal, platform, and compliance costs — SPVs are not free to operate Always consult a securities attorney to ensure proper structure and compliance

Launch an SPV to Invest Like a VC

Curated by: Rubric Advisors

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What is an SPV?

A Special Purpose Vehicle is a legal entity created for a single investment deal
Pools capital from multiple investors into one line item on a startup's cap table
SPV sponsors organize the deal and typically invest their own capital alongside investors
Structured as an LLC under Regulation D (Rule 506(b) or 506(c)) exemptions

Investor Eligibility Rules

Under Rule 506(b): up to 35 non-accredited investors plus unlimited accredited investors
Under Rule 506(c): only accredited investors allowed, but general solicitation is permitted
Accredited investor status requires $200k+ income or $1M+ net worth (excluding primary residence)
Securities laws govern how you can market the deal — consult a securities attorney before raising

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What is an SPV?

Why Use an SPV?

Investor Eligibility Rules

Setting Up the SPV

Sponsor Responsibilities

Key Takeaways

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What is an SPV?

Why Use an SPV?

Investor Eligibility Rules

Setting Up the SPV

Sponsor Responsibilities

Key Takeaways

Related Topics

Should You Invest in Startups?

Investing in Venture Capital

Do I Need an LLC to Angel Invest?